No problem, Greg. It occurred to me that this spin-off type of creating shareholders value might become a regular event with EMC, which was the top NYSE stock performer in the 90s. EMC also has a tremendous and loyal following with a long-term orientation that might just give McData the stock currency to grow independently but still aligned with the forces of storage-centricity, which interestingly enough might now truly include IBM, which has been paying more lip service to it lately.
Also, when EMC acquired Data General in 1999, it agreed contractually to keep the Aviion server product family for 2 years. As you can probably guess, EMC did not want to muddle its status as THE independent storage vendor by going into the server business and thus diluting its server-neutraility. Some research houses, though, are pointing out that Server Consolidation -- ideally suited for Aviion and Numa technology -- may be a trend that will get hotter as the Global 2000 accelerate their deployment of their internetized strategies. If the McData spin-off proves successful and generates strong support from EMC shareholders then Aviion would most certainly be next as well.
This is pure speculation on my part, but some other spin-off candidates would include the hosting business that EMC started at the behest of some of its biggest customers who wanted to try out outsourcing in a more controlled environment. The EMC Services unit -- which is tightly linked to embedded remote diagnostics in EMC systems -- is also another candidate when the time is right. Lastly, as EMC Software approaches $1.5-2.0 billion in sales (est. 2001) and as its International business grows, more global opportunities become available to EMC to create shareholder's value. |
