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Technology Stocks : Brocade Communications Systems,Inc. (Nasdaq-BRCD)

BRCD 12.73

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To: Minbari who wrote (337)	11/30/1999 2:04:00 AM
From: Mehitabel	Read Replies (1) of 1583

Brocade Conference call was outstanding, I thought. If what they said during the CC is true, Y2000 is going to be an outstanding FC and SAN year, starting with Q1 and building all year. 1. revenue growth was 457% year on year, 50% sequential. 2. the market for fiber channel is accelerating. Acceptance of SANs is acceleratiing. Sales cycles are shortening, and orders are coming in faster after sales presentations. There is less argy about well-we-could during the presentations. So market acceptance is increasing. They believe there will be an acceleration of SAN deployment in year 2000. This was said in several different contexts. For example, they have had accelerated pilots, and believe than in Y2000, they will get "stunning growth" from this as soon as Y2K is over. A recent VRTS conference had more than 1000 CIOs there to find out how to get started with SANs. Market data so far only takes account of new deployments. Once initial deployment takes place and customers see it work, they want to upgrade their existing networks. The return on investment on storage consolidation is "stunning". This upgrade cycle is a huge opportunity. 3. The new Silkworm 2000 family, a new entry level product ramped up strongly. 40% of products shipped were these. The Silkworm 2000 family "offers a switch at hub prices". Competes with hubs, but gives a migration path to switch fabrics, and performs better. They are hoping to take share against loops with these new products. They think Silkworm 2000 will be a winner, get them lots of business. When BRCD competes on performance, BRCD wins. This consolidates BRCD as a market leader. Has largest installed base and broadest product line. BRCD revenue is greater than that of all competitors combined. 4. BRCD's guidance is "extremely conservative" based on visibility. Is "can't miss guidance".

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