appreciate the straight dope, DS. for the rest of the board, here're the full tidbits.
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Sunnyvale, Calif.-Based Data-Storage Firm Opens Durham, N.C., Office
Christina Dyrness
01/26/2000
KRTBN Knight-Ridder Tribune Business News: The News & Observer - Raleigh, North Carolina
DURHAM, N.C.--Dave Hitz, co-founder of Network Appliance and its vice president of engineering, doesn't waste his time with humility.
He'll tell you straight out that he thinks the Sunnyvale, Calif., company he helped start in 1992 is the next Cisco Systems. And there are a number of analysts who agree.
The similarities between the companies are striking. Cisco embraced the network protocol that became the backbone for the Internet before the Internet exploded, securing its dominance early in the game. Network Appliance identified its niche -- data storage appliances for networks -- before the market caught on to the need for data storage, which grew as the Internet grew.
The two companies also share a board member, Donald Valentine of Sequoia Capital, an early investor in Cisco.
And now Network Appliance is taking a page from Cisco's playbook by establishing an East Coast presence in the Triangle, something that Cisco, which employs 1,600 here, did in 1994.
Network Appliance has 20 people working out of temporary office space in Keystone Park on Davis Drive and expects to have a staff of 50 customer service and engineering employees by summer. A permanent office, under construction across the street, is expected to be completed in April. The company has sales offices in Boston, New York and the Washington area, but the Triangle will be its first East Coast engineering team.
"We copy Cisco a lot," said Hitz, who was in the Triangle recently to get to know the newest members of the company's 1,000-employee team.
Hitz said Network Appliance had been looking for a place to establish an East Coast engineering office and decided to make it the Triangle when officials met Joanna Karwowska. Karwowska, who is now the company's director of software development, had been working for Data General but jumped at the chance to come work for a company with "a hot technology."
Network Appliance makes data storage devices for use on a network. The computers have their own operating system and hook into a network to allow many different users to access the information. Users can share data files between Windows and Unix computers.
"Our storage capacity, the simplicity of use and its networking capability makes our product very, very interesting to customers," said Karwowska.
Network Appliance's customers are a far-flung bunch. They include Internet players such as Yahoo! and local companies like SAS Institute, Nortel, Paradigm Genetics and Caterpillar. Hitz said that Walt Disney World's Splash Mountain uses a Network Appliance machine to store digital pictures of riders. And Amazon.com uses the boxes to store its vast order information.
Fortune magazine recently named Network Appliance as one of it's e-50 list of the top Internet companies and the fourth fastest-growing company in the country.
Network Appliance has seen a steady increase in revenue in the past five years with sales of $124.7 million during the quarter that ended in October, 1999. Its stock has split three times and closed Tuesday at $107.188, up $5.188.
"The storage market is worth $25 billion," Hitz said. "There's no reason we can't be a Cisco-sized company."
"Yes, they do have that much market control," said Mark Kelleher, an analyst with SunTrust Equitable Securities. "They are very hot with the Internet service providers right now. E [the stock] should have a good run until somebody can challenge them."
Despite potential Network Appliance competitors, Kelleher thinks the company has enough of a head start to keep a hold on the market. He has a "strong buy" rating on the stock.
But Robert Gray, research director at International Data Corp. in Framingham, Mass., points out that Network Appliance is going to have much more competition.
"EMC is getting to be big competition with them," Gray said. And while EMC is coming in at the high end of Network Appliance's customer base, companies such as Intel and Nortel are coming in at the low end.
Hitz doesn't seem worried. Instead, he points out that he and the other two founders have stayed with the company because it's still interesting. As he puts it, "The fun is just beginning." |
