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Technology Stocks : Compaq
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To: paul who wrote (67657)9/15/1999 7:58:00 AM
From: rudedog  Read Replies (3) of 97611
 
paul -
now assuming the avg selling price of a Starfire is around a million dollars including startup services and support that translates to about a billion dollars a year
I'm not saying it's not a good business, I'm just saying it's not a BIG business. Also not the future of the web infrastructure or of mainstream IT infrastructure, which appears to be going in exactly the opposite direction - to large farms of small boxes, rather than a few huge systems.

Also Starfires drag in lots of other infrastructure
That's the real key - most estimates are that the UE10000 drags as much as 5X revenue in related sales, and as such has been the key to Sun's growth. CPQ's failure to field large systems like Wildfire in a timely way has held them back and reduced their ability to compete with Sun in that high end space. But the key to understanding that is to look hard at the economics of the related sales, rather than the big boxes per se.
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