CiVic I couldn't agree more with the buying going on under the fear spin that is being delivered from cnbc...that will turn when their done shopping...might be a month,might be a day...
Any thoughts on the chart of MCDT...the growth numbers are absolutely staggering...
MCDT...
-EMC...technology and management...
MCDT... (Deals with IBM,MSFT in last few weeks among many others)
MCDT article
Company Finds A Home
For Data On Networks
By Thomas M. Kostigen
Investor's Business Daily
The computer age is a wonderful thing, mostly because it saves all that paper handling. But computer data still need to be stored somewhere, right?
McData Corp. bets its corporate life that it knows where, how and why. McData provides high-performance switches and software to connect servers and storage systems. As local area networks, wide area networks and the Internet require servers to transmit data, they need somewhere to store it.
Storage area networks are poised for strong growth, analysts say, owing to data clutter created by the Internet and other technologies requiring storage.
“The whole area’s projected growth is 17% to 18% over the next four years,” says Shelby Seyrafi, analyst at A.G. Edwards. “(Storage area) switching is projected to grow 85% over the next four years. And McData, which plays in the director class, or higher end of (storage area) switching, is expected to grow 120% over the next four years.”
Until recently, storage units were attached to servers. But as memory and storage requirements increased, companies are offloading their units. Companies such as McData provide resources for these companies to store and access data more easily.
“Information is the heart and soul of industry today,” says John McDonnell, McData’s chief executive. “Data warehousing and Web servicing didn’t exist a few years ago. These people need storage.”
There are different types of storage requirements, as well as various ways data are stored and a number of paths used to access them.
Connections have been the way to attach channels with storage units. McData uses fiber optics, and the industry is headed in that direction.
“The legacy architecture has been replaced by fiber switches and directors,” Seyrafi said. “It’s the new architecture that’s taking off.”
Seyrafi says that storage devices used to be attached to servers, but storage management has become more complex. He says more companies are using storage area networks.
McData’s products are designed to be flexible and grow with high-end systems. McData is in the catbird’s seat, Seyrafi says.
“The components in the director class are the higher end of the market,” Seyrafi said.
Brocade Communications Systems Inc. and McData are the two biggest industry players in the storage-area switch market, Seyrafi says. Brocade is McData’s rival in director switches and has followed its path into fiber channels as the industry moved away from the old legacy architecture. And Brocade recently moved into McData’s turf in the director class.
Seyrafi expects McData to keep the lead in that class of the market for at least six to nine months.
Other rivals such as Gadzoox Networks Inc. are focused on different segments of the storage area switch market or are trying to adapt to the new fiber architecture, where McData is placing its bets.
“We feel that fiber is really the way of the future, especially in regional and metropolitan areas,” McDonnell said.
Seyrafi sees storage area growing from $500 million today to $3 billion in three years. A recent study by Dataquest predicts a $4 billion storage area switch market by 2004. It’s an industry that’s growing fast.
That means companies such as McData have to manage expectations and serve the market. It also has to anticipate other needs and changes in technology.
“We are always looking at new technologies,” McDonnell said. “And there is always concern about delivering the right products.”
But he says he is comfortable that McData can handle the fast growth and service the market. McDonnell says McData has an advantage over its rivals because it is - and has been - at the market’s high end, where speed and functionality reign.
“In the switching space, we are looking at speed enhancements,” McDonnell said. “Our customers are trying to tie it all together.”
McDonnell says that information-centric companies will want to share storage among platforms. Different networks, servers and localities necessitate different storage units. McDonnell sees integration among these enterprises. He also wants McData to serve the whole enchilada.
“Our ambition is to expand and to enter the entire enterprise market,” McDonnell said. “It’s our ambition to be a worldwide leader.”
For the second quarter, the company earned 5 cents a share, compared with a 1-cent loss the year earlier. Sales climbed 168% to $56.5 million. The company lost 2 cents a share in 1999, but is expected to earn 25 cents in 2000 and 38 cents in 2001, according to analysts surveyed by First Call. The stock trades as MCDT near 133. |
