Seeking Alpha

Trefis'  Instablog

Trefis
  • on Quick Picks & Lists
Send Message
Led by MIT engineers and Wall Street analysts, Trefis.com helps you understand how a company's products, that you touch, read, or hear about everyday, impact its stock price. Surprisingly, the founders of Trefis discovered that along with most other people they just did not understand even the... More
My company:
Trefis.com
My blog:
Trefis Note of the Day
View Trefis' Instablogs on:
  • Norton is about 30% of Symantec's stock
    Today we've launched content for Symantec which makes money primarily by selling three types of software:
    1. Norton AntiVirus software for consumers
    2. Storage software for businesses
    3. Security software for businesses
    Symantec is known amongst consumers mainly for its Norton brand of security software products such as Norton AntiVirus, Norton Internet Security and Norton 360.  We estimate that Norton constitutes about 30% of Symantec's value.



    Source: Trefis.com

    The Norton segment is Symantec's most valuable segment for the following reasons:

    High Share in the Consumer Internet Security Market

    Symantec is the leader in the Consumer Internet Security Market with a market share of 53%, though its share has declined somewhat since reaching 56% in 2005. We believe that Symantec's share in $5.6 billion Consumer Internet Security Market will be around 45% by the end of Trefis forecast period.  In comparison, Symantec has 18% share in the $13 billion Storage Software Market and we believe that this will increase to 21% by the end of Trefis forecast period.

    We believe Symantec may lose market share in the Consumer Internet Security Market due to

    • High pricing of its products relative to smaller players
    • Its reputation of being a computer resource hog, which continues to frustrate users


    High EBITDA Margin

    Symantec benefits from a high EBITDA margin of 46% on its Norton Antivirus Software products. In comparison, the EBITDA margin for Storage Software currently stands at 34%.


    Disclosure: No positions
    Tags: SYMC, MFE, software
    Dec 03 4:35 PM | Link | Comment!
  • IBM Middleware: the world's most valuable software business
    With a market cap of about $266 billion, Microsoft is the most valuable software company in the world but the most valuable software business is IBM Middleware.


    Software Business Segment

    Trefis Value Estimate

    IBM Middleware

    $103 billion

    Microsoft Windows Operating System

    $101 billion

    Microsoft Office

    $83 billion

    Oracle Database Software

    $67 billion

    Oracle Middleware Software

    $41 billion

    EMC Storage Software

    $21 billion


    Source: Trefis.com


    Middleware is a type of software "plumbing" used to connect different software applications that need to share information.  Middleware is commonly used by businesses that have a variety of separate software systems to make information integration easier.  By making it easier to integrate and share information, businesses can work more efficiently and better serve customers.
     
    Examples of Middleware in Use
    • A hospital that has multiple software applications for tracking patient information across medical segments can use a middleware database program to more easily share important patient information between applications.  This means that physicians and nurses will be able to access the latest patient information more easily.
    • A customer who views his savings balance online through his bank's website while also checking on the status of a recent mortgage application is benefiting from middleware software which is integrating information from different parts of the bank's operations (savings and mortgages) and delivering it to the website.
     
    IBM's has a variety of middleware products, with brands like Websphere, Lotus, Tivoli and Rational, that are used to connect diferent types of software systems.  You see more about IBM's Middleware business here.

    Disclosure: No positions

    Tags: IBM, MSFT, ORCL, EMC
    Nov 23 4:13 PM | Link | Comment!
  • Distilling impact of Microsoft earnings results: 1) Windows 7 will drive more upgrades 2) revenue per search for Bing declines significantly
    Microsoft reported its fiscal year 2010 first quarter results last week and we've updated the Trefis price for Microsoft slightly from $27.19 to $27.38 as a result.  Strong early demand for Microsoft's new Windows 7 operating system and the performance of Bing search were important drivers of our updates.

    Microsoft indicated strong demand build up amongst PC makers in September for Windows 7.  As a result of this and positive reviews from notable Windows 7 testers, we've increased our expectations for the number of upgrades to Windows 7 occurring in 2010.  We now expect Windows Upgrades Sold in 2010 to be 63 million, up from our previous forecast of 46 million as more Windows customers upgrade from Vista or XP.  Our forecast for the number of Windows licenses sold to PC makers (based on Microsoft's market share of PCs) remains the same as we believe we've adequately factored in demand for Windows 7.

    Heavy marketing of Microsoft's Bing search engine has led to some market share gains; however, based on the financial information reported by Microsoft to date, we believe that the company has sacrificed on Revenue per Search (RPS) which has declined more than that of its primary competitors Google and Yahoo.  We've reduced our RPS forecast for 2009 from $41.97 per 1,000 searches to $34.97 per 1,000 searches, representing a 25% decline in RPS over 2008 rather than the 10% decline forecast earlier.  We have also updated RPS by the end of the Trefis forecast period to $44.24 per 1,000 searches, down from $53.09 before.

    In addition to Windows and Bing, we've updated the Windows Server and Xbox & Zune segments of Microsoft based on earnings.  You can view a detailed summary of our updates here (scroll down to the comments section).

    Disclosure: No positions
    Tags: MSFT
    Oct 27 12:46 PM | Link | Comment!
Full index of posts »
Latest Followers

StockTalks

More »

Latest Comments


Posts by Themes
Instablogs are Seeking Alpha's free blogging platform customized for finance, with instant set up and exposure to millions of readers interested in the financial markets. Publish your own instablog in minutes.