Rick Sherlund Believe Quotations

We believe that there is a clear platform shift underway from earlier-generation client-server systems to more Internet-enabled client-server systems and the added new dimension of business-to-business commerce. Oracle appears to be out in front of this issue.

We believe this provides little to no remedy, given that the operating systems business is still a monopoly business as determined by the court.

Microsoft's management has not changed its posture on the quarter, but we believe recent data suggests that Street estimates may need to come down,

We do not believe all the bad news is out yet in the software sector.

We believe there will be an increase in revenue and earnings momentum and a corresponding benefit to the stock as Windows Vista and Office 12 upgrade cycles begin late in the year.

We believe investors will need to hunker down for a potentially long process, possibly leading through appeal into 2001, ... For now, this will be a prominent issue but may become a back-burner issue during lulls in the action.

We are encouraged by this and have raised estimates, essentially back to earlier levels. While the stock is richly valued and the growth is still well below historic levels, we believe there is a good flow of upcoming new products and the shares are likely a relative safe harbor.

Extrapolating from Oracle as a bellwether for the rest of the software sector, we believe the September quarter results for the group will likely come in a bit shy of estimates,

Estimating results has been like catching a falling knife this year and we do not believe Street estimates yet capture the magnitude of capital spending constraints going into 2002, particularly considering anecdotal data coming out of Europe.