Wednesday, June 08, 2005

Who's more important, the analysts or your clients?

Another entry in my journal of "Things to remember if I ever run a company"

This article talks about Bea Systems broadening their business plan in reaction to Wall street skeptics who feel their core business of application server is suffering from slow-growth.

As I read this article it I couldn't help but think that Bea is doing this in reaction to analysts expectations for them to grow as a company, grow beyond what their core business is. I asked myself, are they doing this for the right reasons or are they doing this to impress analysts in hopes of rescuing their battered stock ?

Why can't a company simply focus on it's strengths and do an excellent job serving it's clientele? Bea got to where they are today due to their strong application server product and consulting services which complemented each other. If I make $100MM every year and can comfortably pay my employees, myself and dividends to my stockholders, why is there this pressure to do more? Whatever happened to the mantra, "If it ain't broke..." or "don't mess with success"? When you change your formula for success, it's easy to lose sight of what got you where you are today.

I'm not an avid Bea follower but I can guess that their business (as is any commercial app server vendor) is suffering because of the open source appserver landscape. Why can't they simply improve their product and focus on consulting services? I'm sure most companies with rather deal with a company of Bea's stature than one like JBoss. They need to take advantage of that and lower the price of their product and focus on support/consulting/training services.

Regardless, the intent of this blog entry wasn't to focus on Bea. Am I totally offbase in thinking that even if your company is a publically traded one; if you take care of your clients and provide outstanding service/product, the business will be successful and the stock price will reflect that. In short, please your clients. Doing so will result in enough revenues that should let you pay dividends to please your stockholders.

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