These software companies are hard to follow. I think that the smaller, more focused companies will have a nitch or get bought out, but on the other hand maybe these companies have no chance against the giants like Oracle. If you read what Ellison says about BEA systems (which is in the same area as KANA) in this week's Barrons, it seems like the small companies dont have a chance: On application-server specialist BEA: "They are just too small. They've done a nice job, they have 14,000 customers, out of our 230,000 database customers. They can't compete with us in security, and they can't compete with us in performance. They got there first, but its going to be hard for them. Someone will end up buying them."On the likelihood of bidding for BEA or Siebel: "At the right price, we would buy BEA. But we're nowhere near there. ... There might be no price at which we'd buy Siebel. Siebel, like i2, is a dying company. In the end, SAP will drive i2 and Siebel and Peoplesoft HR out of their installed base, and in time we will, as well. If we were to own Siebel, we'd have a completely indefensible position in SAP accounts. So it really has almost no value."I would like to say that a company like KANA is a gamble. Its a stock investment that you place in your high risk portfolio. I would say you balance this with investments that are more stable and boring if you must put a word on it.
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