Wednesday, September 13, 2006 3:36:52 PM
Dont forget to take into account, if NEOM was able to register 3 million bar codes they will need to do some hiring to process the calls and enter the data into the system.
Another factor is NEOM is not merely a software company. They plan to be the works, which means adding a lot of equipment as demand grows, maintenance staff to keep the equipment up and running and do routine maintenance etc. So you arent going to see their net margins improve a whole lot as this kicks off.
And there arent many companies who go from significant losses to 3 percent net profits in a couple of quarters.
And keep in mind the average software company, once they design their software and burn it to disc, the revenue flows in from the sale of the disk. All they have to do is ship the product out the door and the revenue is in their hands. Oracle and others are so well known the consumer goes online looking for their software, they dont have to find the consumer. For NEOM that wont be the case, they will have to be actively persueing the consumer to get them to register barcodes with them, and not with the competition, since they are an unknown at this time(or nearly an unknown).
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