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Sapient Corp. Message Board

  • holywallet holywallet May 1, 2004 7:43 AM Flag

    BT contract - what are the facts?

    We've heard crap like this before. Make an announcement about some amazingly huge, long term deal with a major global player, then it never materializes beyond a JAD session or some token work.

    The deceptive press release is frustrating - "...announced that it will provide extensive technology design, development and support services for BT�s Local Service Provider contract for London, which is worth up to �996 million..."

    Yeah, it's BT's contract with the UKDOH that is worth that much; has nothing to do with Sapient's cut. And 10 years? Again, that's BT's deal, not Sapient's. This kind of deceptive flaunting of someone else's truth is symptomatic of a lack of strong stories of their own.

    I suspect this will play out like so many mega-announcements they've done in the past - a couple of workshops, maybe a small track of work that is so insignificant that the prime contractor doesn't want it for themselves, then it fizzles away with huge sales costs to chase crap.

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    • This is the most accurate description of SAPE i have ever read. There is no long term value here. However, note this stock's relationship to it's 10 day moving average. Short when it gets 10% or over the 10day SMA and go long when it gets 10% below it's 10day SMA. This is a trading toy at this point, and you can make money off of it.

    • ok. heard the earnings call in its entirety. here are a few thoughts:

      1) decent q2q growth and decent earnings
      2) i view the BT deal as a non-event until we see some tangible numbers.
      3) concerning that non-US was such a large portion of revenues - i believe the number was between 45-50%. concerning for two reasons. first, the currency rates accounted for approx 1MM of their profit. second, it tells me that they are having trouble closing deals in the US. perhaps the US projects are in early phase but it definitely is concerning that while they are winning more deals, their win rates are up, we do not yet know what the meaning is.
      4) good to see their turnover down to the 17% range. more than 50% of their workforce is now in india. will be interesting to see how far they go with the percentages. they added 200+ people and i would presume that they are adding most of those to india. personally, i believe that there is going to be at least some material backlash and sapient will be one of those companies that will feel the effects of it.
      5) incidentally, again personal opinion, i believe that the higher percentage of people in india, the higher the dilution of their "value proposition". what they are doing is equiv. to the dotcom days of hiring tons of kids right out of college - the first bit of code they write, sucks and is far from production level quality. while true, they will gain experience fast, the question is whether it will be fast enough.

      net net, seems like a non event. nothing to react to. nothing to get excited about. i agree with an earlier post that this will be dead money for a while

      • 1 Reply to got_screwed_by_internet
      • Having worked as an eBusiness consultant for BT (with a company much like SAPE), my experience is that BT is very fragmented. They give out lots of little contracts. We bought a small consulting company that had existing relationships and was happy with the dribs and drabs they were getting. We tried to ramp it up to some bigger projects and ran into a brick wall.

        My experience may have been atypical so take it with a grain of salt. I was only in the UK for a year and a half so not the expert on BT.

 
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