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Kit Menkin’s Leasing News www.leasingnews.org Wednesday, September 28,2001 ------------------------------------------------------------------------------------------------------ Headlines--- American Express Business Finance Cuts Off All Brokers Parker Leasing Investigation—Is this a Scandal? Our Man in New York City: Phil Dushey B of NY. Estimates Third Quarter Impact from World Trade Rate cuts put dent in bank profits Penske Truck Leasing Acquires Assets of Southern NationaLease Merger Between Mid-State Bank & Trust /American Commercial Bank S&P: Aircraft-Backed Securitizations on Watch Neg For Windows XP launch, timing hurts Friday—Odds and Ends ###### denotes press release ---------------------------------------------------------------------------------------- American Express Business Finance Cuts Off All Brokers I just got the phone call. American Express Business Finance has closed down their broker division. We can submit deals until 10/12/01. All deals must be funded by 12/31/01. "It doesn't fit in with Am-Ex corporate culture" I was told. I know we all expected it. Thought you might be interested. P.S. Now we're in a tight spot. Any suggestions of anyone we should sign up with that would replace them? Someone who funds directly? To:
All American Express Business Finance BrokersFrom:
Hank Johnson, Manager - Wholesale DivisionDate:
28 September2001Subject:
Broker ProgramEffective
October 12, 2001, American applications from our broker network. technology and
marketing efforts toward with the operating philosophy under which past 18 months.Express
Business Finance will no longer accept This represents a strategic decision to
focus our vendor and direct sales divisions and is consistent American Express
Business Finance has operated the past 18 months.We
will continue to fund all approved transactions through December 31. 2001. All
approvals issued after today will expire on December 31, 2001.I
want to personally thank all of you for your business over the last 15 months.
It has been a rewarding experience to work with you and I wish you nothing but
success in the future. Over the next few days, I’ll he calling each of you
to personally thank you for your business I’ll also be happy to provide references
to other funding sources at your request. If you have any questions, please feel
free to contact me at 713.354.4640.Once
again, thank you for your business.Sincerely,Hank
JohnsonSierraCities.com
Inc.Business
Financewww.amexbf.com~~~~~ The real question is, what business will they now be going after and with what marketing lists...? Bob bob@first-cap.com Leasing News is trying to get a comment regarding this latest development, particularly since it may relate to both the $15 to $20 million RW Professional portfolio and the $750 Million Midam Portfolio. Also if there is any intention in going after broker’s vendors, as perhaps implied in the memo. editor ----------------------------------------------------------------------------------------- Parker Leasing Investigation The Austrian soccer club FC Tirol is in business with Parker Leasing. The club is very close to bankruptcy but has announced to receive 150 million US-Dollar from Parker Leasing in the next three weeks. For me it is hard to believe that an American Leasing company gives so much money to an Austrian soccer club. Leasing News has this company on our Bulletin Board as having received complaints for holding advance rentals, on some large leases, too. We asked readers for help. \ THE TEL # IN USA TODAY IS 800-577-6577 it may be the same parker leasing that advertises daily in the classified section of USA....last conversation with them was years ago...they wanted to charge an upfront and then would get all your leases funded...they must get takers because the ad has been running every day for the last 5+ years
Carl Rubin ComCo Equipment Leasing Group Inc. 407-629-7677 (Reached voice mail. Will try again. Thank you for telephone #.editor ) __ _________________________________________________________________ Friday---Odds and End Bring back the ITC Enjoy the news--whatever political juice you have would help getting ITC in the economic package that is going through the channels in Washington. It is the quickest fix for a segment of the economy that was down long before 9/11 and is vital to getting the economy on its feet. It can also be limited to 6 months or a year or whatever they feel is appropriate. It should be priority one in the package. Thanks Jay Boslin ( The Investment Tax Credit would certainly help the economy. As to juice in Washington, DC, that would be Mike Fleming of the Equipment Leasing Association. But I don’t think I have much juice with him, for several weeks I have been trying to find out what kind of car he drives, sent him several e-mails...not even Dennis Brown will talk. editor ) _____ Rev. Jesse Jackson This may not have anything to do with Equipment Leasing, oy vey. Does the Taliban want Jesse Jackson to come to Afghanistan? President Bush says there is no discussion or negotiation. I hope you print this, you nice guy. I think Jesse Jackson should go to Afghanistan and stay there. Permanently. Izzy Finster Sorry, Izzy, this is hot off the press: Jackson says no plan to travel to Afghanistan WASHINGTON, - Jesse Jackson, the US civil rights leader, said Thursday he had no plan to travel to Afghanistan on a peace mission to the ruling Taliban. Speaking to journalists here, the former presidential hopeful said: "I do not want to go. I have no plans to go." Earlier Thursday Jackson, 59 said he had been invited by the Taliban to act as mediator over US demands for the handover of Osama bin Laden, the US government's prime suspect in the September 11 terrorist onslaught on the United States. The Taliban have refused to surrender bin Laden, demanding that Washington produce evidence of the role of the Saudi-born exile and his al-Qaeda network in the attacks which left almost 7,000 people dead or missing. ~~~ E-mail filter Cannot reach those who’s e-mail comes back, particularly all the @pacbell users. We get the isp address, but not the name or address of the reader. The last week has seen a change on the internet where about fifty e-mail now come back with the following notices: <<< 550 <chi6-1.relay.mail.uu.net[199.171.54.98]>: Client host rejected: "Rejected By PSNW Anti-Spam 2001-07-18 06:40:37" <<< 550 Relaying is prohibited <<< 500 5.7.1 Mail from 199.171.54.98 refused, see http://relays.osirusoft.com/ <<< 500 5.7.1 Mail from 199.171.54.98 refused, see http://relays.osirusoft.com/ <<< 500 5.7.2 Mail from 199.171.54.98 refused, for info go to http://relays.osirusoft.com/ <<< 550 Relaying is prohibited <<< 571 5.7.1 relay rejected << 550 <chi6-1.relay.mail.uu.net[199.171.54.98]>: Client host rejected: "Rejected By PSNW Anti-Spam 2001-07-18 06:40:37" If per chance you read this on line, we are looking at other software programs that might avoid these filters. editor _________________________________________________________________ Our Man in New York City: Phil Dushey Hi Kit I am back. After enduring the crisis we had in New York my computer system was completely overwhelmed with the latest computer virus and I was pretty much out of service for the last two weeks. We finally got everything cleaned up and if I can give anybody any advice who has not got hit yet, make sure you have the latest and greatest virus software and then keep updating it. As far as the meeting goes the later in the afternoon the better. With all that has happened I would love to get in a round of golf on Friday and if the meeting is too early that will not be possible, but whatever time works for everybody will work for me. I would like to tell everybody what is going on in New York. This horrific nightmare has taken a very deep toll on the city. If you walk down the streets there are stills thousands of people going to work and from the outside looking in it looks like business as usual, but its not. I don’t think that there is a person in the city that has been left unaffected. There is an underlying fear that has taken over the city, everybody is wondering where the next attack will come from. Will it be gas, a bomb or some other type of crazy horror. Yesterday there were two new alerts. One was that a truck filled with explosives or virus was going to explode somewhere in the city and that has resulted in every car and truck coming into the city to be checked, as I think it is impotent to do it has made commuting a nightmare. The other scare is that a few terrorists will inject themselves with a deadly virus and just go through the trains and department stores spreading the virus to thousands if not tens of thousands of people. Business is down all over the city and I even see my business down over 50% because people just are afraid to make commitments with all the uncertainty that’s going on now. Yesterday was Yom Kippur which is the holiest day of the year for Jews and we go to temple to ask for good things in life and to be forgiven for any sins we did. I usually pray for money ,success and happiness for my family. This year I just prayed that my family and especially my grandchildren will be able to grow up ,get married ,have children and enjoy all the things we take for granted, like going to the park , a movie , dinner out with the friends or maybe a ballgame without having to go through security or have our pictures taken, but just enjoy ourselves without fear. Last night I took a walk with my 25 year old daughter and all of a sudden she broke out in tears and she said " Daddy I am so scared" she said all I want to do is get married, raise a family and be happy and now ," Who Knows" I think all of us have to get a little closer to our families and an extra kiss to our loved ones will go a long way. Today I read in the paper that the President has put on hold any military action in favor of diplomacy and I can not tell you how mad I got. These "Bastards " for lack of a better word have changed our lives forever . They have come into our lives , killed our friend because every American is our friend and now the President who I thought was strong is now bowing to world pressure Over 7000 thousand people are dead and these terrorists are laughing at us again because they are not afraid to kill but we are. We live in fear and these people are planning their next attack. I don’t know about everyone else but I am mad and scared. I hope the President does the right thing and GOD BLESS AMERICA. Phil Global Financial Services 150 East 58th Street new York NY 10155 Phone 212-935-4370 Fax 212-935-4378 Web http://www.globaleasing.com" email global@globaleasing.com dushey@mindspring.com ----------------------------------------------------------------------------------------------- ### ############################## ######################### The Bank of New York Company, Inc. Estimates Third Quarter Impact from World Trade Center Disaster
New York, NY, The Bank of New York Company, Inc. currently expects that earnings for the third quarter of 2001 will be negatively impacted by approximately $125 million or 17 cents per share as a direct result of the World Trade Center disaster. The Company expected to meet the First Call consensus E.P.S. of 52 cents for the third quarter prior to the events of September 11th. The estimated impact of the disaster reflects certain additional costs associated with: the disabling of two of its facilities close to the World Trade Center; full outfitting of contingency locations and associated infrastructure links; reoccupying its headquarters building at One Wall Street; and other expenses, including overtime, outside vendors, and extra security. In addition, the Company experienced a reduction of revenues in the quarter due to the temporary closure of the markets and higher than normal levels of excess liquidity resulting from the disruption of the markets and payment processing. The Company believes that a substantial portion of the impact of the disaster is covered under its insurance policies. These insurance recoveries are expected to be recorded in future quarters. "This tragedy of unprecedented proportions has deeply affected us all and we extend our deepest sympathies to the families of two of our own employees and the thousands of others who were lost," said Thomas A.Renyi, chairman and CEO. "At the time of the disaster, we had over 8,300 employees located in four lower Manhattan facilities who were evacuated in a matter of hours. I am proud of all our employees' dedicated efforts, working around the clock to restore and now maintain the Bank's operating capacity from our contingency sites. We continue to work closely with our clients and other market participants to resolve any remaining issues arising from market disruptions brought on by this disaster. "Our results for the quarter up to the date of the tragedy were consistent with our and the investment community's expectations in light of the market environment. While near-term results will continue to be affected by events as they unfold, our long-term earnings outlook and capital strength remain unchanged." The Bank of New York Company, Inc., is a financial holding company with total assets of over $76 billion as of June 30, 2001. The Company provides a complete range of banking and other financial services to corporations and individuals worldwide through its basic businesses, namely, Securities Servicing and Global Payment Services, Corporate Banking, BNY Asset Management and Private Client Services, Retail Banking, and Global Market Services. Additional information on the Company is available at www.bankofny.com. ( courtesy of ELAonline.com ) ___________________________________________________________
Rate cuts put dent in bank profits By Dean Calbreath SAN DIEGO UNION-TRIBUNE STAFF WRITER As the Federal Reserve slashes interest rates, it is putting the squeeze on banks at a time they can least afford it -- when the economy is veering into recession. Some smaller banks may go out of business, hurt not only by falling interest rates but by rising loan defaults and falling home mortgages if the economy falters, analysts say. And even at bigger banks, the profit squeeze could lead to a retreat from high-risk forms of lending -- especially construction loans, which have already come under scrutiny from federal regulators. "We've seen some record profits for banks over the past few years, but it's not a pretty picture right now," said Mike Heller, who heads the Veriban bank-research firm in Massachusetts. "Banks will probably see some tough times and we could see some smaller or midsize banks go under." A cut in interest rates generally creates more business for financial institutions, as would-be home buyers line up to get mortgages. But the Federal Reserve's rapid-fire slashing of interest rates -- which is expected to continue through fall -- has left banks little time to adjust the gap between the interest rates borrowers pay them and the interest rates they pay depositors. Most banks have slashed their mortgage rates to rock-bottom levels. But they are still making large payouts to customers who opened deposits when the rates were still high. Bankers say it typically takes six months to adjust to a cut by the Fed. But the Fed cuts have been coming in such rapid succession -- including a half-point cut on Sept. 17, the eighth cut so far this year -- that the banks are still far behind the curve. "I've been in this business 32 years, and I don't know of any time that interest rates have moved so quickly in such a short period of time," said Frank Mercardante, who heads Southwest Community Bank. In the second quarter, Southwest's net income dropped to $243,000 from $249,000 the previous year, partly because of the changes in the interest rates. Mercardante said the bank will have to cut expenses and make money from non-interest areas -- such as data-processing -- to make up for the decline in profits. Making matters worse, banks are likely to run into more loan defaults and fewer first-time mortgages as the economy slides into recession. In a recent teleconference, analysts from the Standard & Poor's ratings house warned that massive layoffs are leading to a rise in deadbeat borrowing at credit-card companies. They added that despite the recent cuts in interest rates, home purchases may be on a downward slope. "Housing and residential mortgages have been the economy's bright spot for the early part of the year, but that bright light has been dimming because of the slowing economy," said S&P analyst Victoria Wagner. The potential for banking problems has been on the radar screen for a while. As early as May, the Federal Deposit Insurance Corp. estimated that failures at banks and thrifts this year could cost between $150 million and $1.1 billion, compared with just $40 million last year. The agency warned that nearly a third of the banks it reviewed were making risky loans in the construction sector. The news is not as bad as it sounds. Even if this year's losses top $1 billion under the FDIC's worst-case scenario, it would not come close to the financial crisis of the late 1980s and early 1990s, which cost several hundred billion dollars. "I don't think this will be anywhere near as bad as it was in 1990 and 1991," said George Haligowski, president of Imperial Capital Bank in La Jolla. "And I don't think it will be anything to be concerned about in San Diego or the rest of California, although I can't speak about other states." Nevertheless, Haligowski, who runs one of the two billion-dollar banks based in San Diego County -- the other is First National Bank -- says the interest rates have already slimmed his bank's profits. And worse may be ahead. "We're entering a period when above-average super-performing banks will begin to act more like average banks, and average banks will drop to below average," he said. "The banks that are below-average now may just have to go away. If you're already having problems, you're going to find it hard to survive." __________________________________________________________________ ### ############### ############### Penske Truck Leasing Acquires Assets of Southern NationaLease
READING, Pa., / -- Penske Truck Leasing has acquired the assets of Southern NationaLease, Inc., a truck rental and leasing company based in Birmingham, Ala., with additional operations in Montgomery, Huntsville, Bessemer and Pell City, Ala. The acquisition closed September 28, 2001. The acquisition of Southern NationaLease adds over 200 tractors, straight trucks and trailers to Penske Truck Leasing's fleet. Southern NationaLease serves more than 35 customers through five locations in Northern Alabama. "Southern NationaLease is a well-respected competitor in this dynamic and growing market," said Wayne Angelbeck, vice president of business development for Penske Truck Leasing. "We believe that Penske's strong customer commitment will enhance the already high quality service level that Southern NationaLease's customers have come to expect." "The sale of Southern NationaLease to Penske Truck Leasing will be beneficial to both our customers and employees," said Frank (Rusty) Boyd, president, Southern NationaLease. "Penske's nationwide service network and expertise in the transportation industry will create greater opportunities for expanded services and future growth. We plan to continue to work toward a smooth and seamless transition of transportation services." Penske Truck Leasing, headquartered in Reading, Pa., is a joint venture of Penske Corporation and GE Capital. A global transportation services provider, the company operates approximately 206,000 heavy-, medium-, and light-duty trucks and serves customers from more than 1,000 locations in the United States, Canada, Mexico, South America and Europe. Product lines include full- service leasing, contract maintenance, commercial and consumer rental, integrated logistics services and supply chain management. Penske Truck Leasing's annual revenues are approximately US $3.4 billion. Penske Truck Leasing can be reached at www.pensketruckleasing.com. ### ########################### ########################## Merger Between Mid-State Bank & Trust and American Commercial Bank Completed
VENTURA, Calif--Officials from Mid-State Bancshares (Nasdaq:MDST) and Americorp signed documents on Friday to officially complete the merger between the two bank holding companies. Americorp and its subsidiary American Commercial Bank will merge into Mid-State Bancshares and its subsidiary Mid-State Bank & Trust. The merger will give Mid-State Bank & Trust five new offices in Ventura County -- one in Camarillo, one in Oxnard, and three in Ventura -- for a total of 39 serving Ventura, Santa Barbara and San Luis Obispo Counties. Mid-State Bank & Trust's Oxnard office at 300 Esplanade Drive will consolidate with American Commercial Bank's office in the same building. Mid-State Bank & Trust also has an office in the Northside Plaza in Oxnard at 121 E. Gonzales Road. "American Commercial Bank has served this area well for 27 years, and it is important to us that we maintain that level of local service," said James W. Lokey, Mid-State Bank & Trust's president and chief executive officer. "Lending decisions will continue to be made locally and money deposited in our bank will be invested back into the community through loans to local residents and businesses." "Mid-State Bank & Trust's philosophy is `Partners in Your Community,' and we intend to live up to it in the new communities we serve here in Ventura County," said Lokey. "We give our employees time off to participate in chambers of commerce, service clubs and charitable organizations. Through the Mid-State Bank Foundation, we give thousands of dollars a year to help youth, education, the arts and other charitable organizations." The merger provides American Commercial Bank customers access to many new products and services, including Internet banking, trust services, investment management and business equipment leasing. In addition, Mid-State Bank & Trust can provide larger commercial loans to business customers. "One of the things that made this merger so attractive to both entities is that we have similar philosophy of providing premium, friendly service," said Lokey. "We have retained all of ACB's front line staff, so customers will continue to be served by the same friendly professionals they always have." The merger gives Mid-State Bank & Trust a total of $1.8 billion in assets and gives the bank the fourth largest deposit market share among banks in Ventura County. The $63.7 million deal was approved by Americorp shareholders at their annual meeting on Sept. 11, 2001. For each share of Americorp stock, shareholders will receive 1.7985 shares of Mid-State Bancshares stock, or $28.75 cash, or a combination of both. Former Americorp chairman and U.S. Congressman Robert J. Lagomarsino will join the board of directors of Mid-State Bancshares. For 40 years, Mid-State Bank & Trust has provided its customers with a friendly, home-based, community-oriented bank. With assets of $1.8 billion and 39 office locations, Mid-State Bank & Trust serves almost 115,000 Central Coast households and employs 850 Ventura, Santa Barbara and San Luis Obispo County residents. Mid-State Bank & Trust . . . Partners in Your Community Since 1961. ### ############################# ########################## _____________________________________________________________ Let them go BK??????????????????? I am surprised that there isn't more debate about this airline bailout legislation. Why not let them go bankrupt? I can't figure out how it is legal to enrich airline stockholders at the expense of taxpayers. Encourage your readers to read this article, as I would like to hear feedback from someone who supports the bailout. I think it should be a hot topic of debate. http://slate.msn.com/Economics/01-09-27/Economics.asp David Leidy dleidy@flexlease.com ### ##################### ############################# S&P: Aircraft-Backed Securitizations on Watch Neg
Standard & Poor's--Selected debt securities in eight aircraft-backed securitizations were today placed on CreditWatch with negative implications (see list below). This action follows Standard & Poor's review of aircraft lease portfolios and other aircraft-backed transactions to assess the rating impact of airline industry problems subsequent to the terrorist attacks of Sept. 11, 2001 in the U.S. The outlook for aircraft values and lease rental rates had already been weakening prior to Sept. 11 as airlines were suffering from the impact of a global economic slowdown that started in late 2000. The events of Sept. 11 accelerated this process, particularly in the U.S., where most airlines have reduced flights by about 20%. Other airlines have seen a decrease in traffic on routes to and from the U.S. and, to a lesser extent, on other international routes. The U.S. and Japanese economies have likely already entered recessions and the EU economies, as well as some in Asia, are slowing. So far, aircraft grounded by airlines have been mostly older, less efficient planes, but the indirect effect on values and lease rates will extend to virtually all aircraft models to varying extents. Airlines have also begun to approach leasing companies (including those that service aircraft securitizations) to seek renegotiation of lease rates to save cash, reflecting weakening market conditions. In arriving at the decision to place specific tranches of certain securitizations on CreditWatch with negative implications, Standard & Poor's completed an initial review of the transactions to determine: -- Current loan-to-values and levels of credit protection available for each of the rated classes of notes; -- Available liquidity facilities and reserves and their current usage; -- The proportion of aircraft not generating income (aircraft on ground, or "AOG") and a comparison of current AOG levels to expected future performance; -- The distribution of lease renewals in the short to medium term and any notable concentrations of expiry dates; -- Current levels of delinquencies and defaults and how these variables would be affected in the future; -- Concentrations of airlines more susceptible to the risk of insolvency; -- Geographic concentrations of airlines; -- Concentrations of aircraft types whose values and lease rates were likely to be more under pressure; and -- Which transactions have liability structures with higher minimum principal payments and, therefore, are facing greater pressure on the junior rated tranches. The impact of a global economic downturn and the events of Sept. 11 on an aircraft pool securitization are mitigated by the diversity of aircraft types and airline carriers in the portfolios. Concentrations to U.S. carriers are subject to certain limits and current levels average 15% to 20%, measured by aircraft value. Transactions have been structured to withstand substantially increased levels of airline defaults and depressed lease rates over the term of the transaction. Standard & Poor's analysis will focus on both the short-term liquidity requirements of the deals and the levels of asset protection on a medium-to-long-term basis. Standard & Poor's will be conducting further reviews to determine if any downgrades will be necessary for those transactions placed on CreditWatch with negative implications. In addition, the senior tranches of the transactions mentioned in this press release will be monitored to determine any need for possible future rating action. ( courtesy of ELAonline.com ) ### ################### ########################### For Windows XP launch, timing hurts By Allison Linn, Associated Press, SEATTLE (AP) Art Kuller is a typical small business owner in these lean times. With purse strings tightened considerably, the president of the suburban Seattle high-tech company MicroConnex is willing to invest heavily in certain must-haves: a state-of-the-art laser for manufacturing or keeping the right highly skilled employees on his 18-member staff. But he won't be shelling out cash for any nonessentials including upgrading the company's 27 computers to Windows XP, Microsoft Corp.'s new desktop operating system. ''There are some nice things the integration with the Internet would be nice,'' Kuller says of the new system. ''But at the moment it's got to be better than just, 'It would be nice.''' Consumer confidence is plunging and even the most stable U.S. companies are reining in spending. Worried about national security, there's little appetite for shopping. The timing doesn't favor Redmond-based Microsoft, which is gearing up for the official Oct. 25 appearance of Windows XP, its biggest consumer and business launch since Windows 95. ''It's a daunting marketing task,'' says Rob Enderle, an analyst with Giga Information Systems. Microsoft already had reason to be concerned about the launch even before the chilling Sept. 11 attacks. The economy was in a slump, with analysts predicting record-low growth for personal computer sales a key market for Microsoft because most new PCs will ship with Windows XP pre-loaded. The software giant also faces grumbling about new licensing arrangements aimed at prompting more regular system upgrades and potentially costing companies more money. And there's the nagging federal antitrust trial, which centers on Windows. The Department of Justice has decided not to pursue a Microsoft breakup but could force changes in the company's business practices as a new trial judge convenes hearings to determine how to penalize Microsoft for monopolistic behavior. The economic fallout of the terrorist attacks further hurts Microsoft. With financial woes spreading into traditional industries, the high-tech research firm International Data Corp. has reduced PC sales growth expectations to 3 percent for 2001 down from 11 percent growth last year. In such a climate, Enderle says, if companies make any technology purchases, they are apt to opt for videoconferencing equipment to save money and reduce travel and Internet security tools. ''At the end of the day there are a lot of things (companies) want to do,'' he says. ''Paying Microsoft more money is going to be No. 53 on that list, or not even on that list.'' Consumers have also been too distracted and cautious with their wallets. Microsoft remains undeterred. Concern about the economy ''is even a bigger reason for Microsoft to step up and push this product,'' says Jim Cullinan, lead product manager for Windows XP. He says the company has tweaked its marketing language slightly to reflect the country's somber mood, though he would not provide details. Otherwise, it is moving forward with an aggressive, $1 billion campaign to sell Windows XP. The company won't reveal specific sales expectations. But the stakes are clearly high. IDC estimates operating systems accounted for more than one-third of Microsoft's total revenue in the calendar year 2000, and the vast majority of that was from client operating systems such as Windows XP. The news is not all bad. Though reducing short-term expectations for Windows XP, analysts acknowledge that the vast majority of companies are dependent on the Windows operating system and will have to upgrade at some point. Scott McAdams, analyst and president of McAdams Wright Ragen in Seattle, predicts XP will gain momentum over the next 18 months out of necessity if nothing else. Indeed, while analysts say many businesses will react like MicroConnex, others will see the new operating system as a relatively inexpensive way to boost productivity. Bob Frause, president of the Seattle public relations firm The Frause Group, has just eight full-time employees and 10 computers, running everything from Windows 95 to Windows ME. He's decided a full upgrade will help everyone work better together. ''I just think that we all need to be on the same sheet of music,'' Frause says. Microsoft has another edge with this product. Businesses typically have been shy of immediately upgrading to new Windows systems because of glitches in early versions of Microsoft software. Windows XP, however, is built on the same stable technology found in its last release, Windows 2000. ''It's going to be very much like Windows 2000 release two, and that makes it less risky,'' IDC analyst Al Gillen says.
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