Roy, thanks for the posting, and I wonder if you have a couple of more minutes to share your views.
It sounds as though you heard the same rumors that rapport heard, and it truly is stunning, to me, to hear rumors that Brocade turned down the number 1 OEM. Even if that is true, however, Brocade turning down the transaction does not tell us much about how valuable this deal is for Ancor. A few questions illustrate just that in relation to your response No. 4 to KJ's questions:
1. Did Sun offer Brocade the same gross price per switch that it agreed to with Ancor?
2. With respect to the switches that are the subject of this deal, how does Brocade's marginal cost per switch compare with Ancor's marginal cost per switch (higher, or lower). Obviously, if Ancor has a lower priced switch, on a marginal cost basis, it has more room to offer a lower price to SUN?
3. Does Brocade have any capacity or delivery constraints which influenced the negotiations with SUN to insist upon full margin for the deal. See para. no. 2 above?
4. Did SUN offer to do business with both Ancor and Brocade, at the same time so that price competition, future developments and availability would inure to SUN's benefit?
5. When Brocade said "no" to SUN, was an offer outstanding to Ancor from SUN, so that it was clear to Brocade that two suppliers were going to be involved, thereby not permitting Brocade to make up on volume what it would be losing through lower margins on individual sales?
6. When Ancor said "yes" had Brocade already said "no", so that only one supplier was going to be involved, thereby increasing the overall profitability?
Thanks in advance,
Pat Sharkey |
