Rocky Times For Redback?

Could Redback’s incredible run of success in the subscriber management market be set to unravel?

The company faces four challenges to maintaining or extending its market hegemony.

· Its products are based on PC technology. Critics say this gates performance
· It may be losing at least one major customer account: UUNET
· It needs to integrate its products with those from Siara – a company it recently acquired (tricky, given that Siara doesn’t have product yet)
· A hot new startup is readying a ‘Redback killer’
Of course, the prognosis isn’t all bad for Redback http://www.redback.com. In its favor it has a big 'first mover' advantage, more than 180 customers, and field-proven software. Also, its recent acquisition of Siara, an optical networking startup, gives it access to a huge pool of top-flight engineers.

Redback also announced earnings today. They're up from $26.1 million in the fourth quarter of 1999 to $34.2 million in Q1 2000, but still have a long way to go before they begin to justify Redback's $10 billion market capitalization.

In the mean time, some are wondering whether Redback’s success to date might be built on sand. “It’s really not a good idea to build a big stock price on a flimsy foundation,” says Deb Mielke, an analyst at consultancy Treillage Network Strategies Inc. http://www.treillagenet.com.

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