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Technology Stocks : The New QLogic (ANCR)

QLGC 16.07

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Aug 24 5:00 PM EST

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To: Greg Hull who wrote (27211)	6/1/2000 12:18:00 AM
From: Kerry Lee	Read Replies (1) of 29386

RE; McData spin-off, I had heard rumors some months ago that Brocade was looking to buy McData from EMC and if that had happened it might have precluded Ancor from winning part of the EMC OEM business ( eg. 4 years ago, HWP sold their FC switch business to McData which was in turn contractually awarded the HWP account over a 3 year period ). The benefit to McData is that currently they are perceived to be "EMC captive" which precludes them from being serious contenders for OEMs that compete with EMC ( eg Sun ). For example, AT&T ownership of Bell Labs was detrimental to Bell since their potential customers the RBOCs, MCI and Sprint competed with ATT. Once free via IPO the newly independent "Lucent" was much more successful winning new business. Regarding Ancor, one of the issues that hurt Ancor's chances in winning other OEMs was the fear that they would be bought out. For example, perhaps HWP or DELL were concerned that if they awarded part of their account to Ancor and if Ancor had subsequently been bought by Sun, that their competitor would have access to their confidential plans and inside knowledge of their technology. The Q Logic merger now makes Ancor a financially viable non-captive vendor that is more likely to remain at arms length from their competition.

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