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Technology Stocks : Open Text
OTEX 29.31+1.8%Jun 17 3:59 PM EDT

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To: paul tuok who wrote (59)12/6/1996 7:09:00 PM
From: Tyler Lawton   of 1195
 
I think they negotiate each contract individually. It is usually based on the number of users of the software, what they call "seats". So they negotiate a per seat agreement, say $500 per seat for 1000 seats. What the average seat cost is I don't know. I look first at the number of seats if they disclose it as in:

"Livelink will be initially used by 200 Conoco employees on a HP-UX
computing platform."

That's not going to generate much revenue up front. But, if the company likes what they see, that can grow into at site license, which in Conoco's case is 16,000 seats or employees. That is huge dollars. That is what you look at next, the potential seats for a new customer. Since this technology is so new, you aren't going to get a lot of site licenses at first. What you get are pilot programs with a few hundred people. If the program meets expectations, you go for the site license and the big dollars. This is why some of these initial announcements don't move the stock price.
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