Right now, I think the question of NTAP vs. EMC is not the crucial question to be addressing. Right now, the crucial question, on which I am focusing my attention, is: when will the sector bottom?
I don't think we'll have the info to know whether NTAP has a discontinuous innovation, for years yet. I would agree, that neither NTAP nor EMC has a proprietary standard. If someone wants to enter the storage market, they can do so without paying a royalty to anyone. You don't need to use WAFL or ONTAP to make a product that directly competes with NTAP's products. So, I'm not sure that storage (NAS or SAN) will ever have a Gorilla. But Kings aren't bad investments. This is another issue I am agnostic on (whether storage will have a Gorilla or a King). Right now, NTAP and EMC have different customer bases, and only partial overlap in their product offerings. I think we'll have to wait until their markets and customer bases are more fully merged, before deciding who the winner will be. For the next several years, they may both win against the server companies.
Yes, I have very recently begun building long positions in NTAP (LEAPS, when the stock hit 13 and 10.75), and EMC (stock, average cost 27). I'll buy more of both, on further weakness (NTAP at 11 again, if we bounce there again; EMC at 16). I'll lighten up on both (NTAP at 17-27, and EMC at 28-38). |
