Keep in mind, these are my opinions of FORE. My facts may not be completely accurate, but what I believe to be the case. I welcome any corrections or opposing opinions on anything said here.
My opinions come from 7 years of experience as a network manager for a Fortune 1000 company, and enough investing experience to know that good companies aren't always good investments.
The Company, The Products, The Technology
FORE is a technology leader in ATM. Until now they have also been a market leader, but until now the competition has not been that fierce. I think there are two areas in the ATM marketplace: products that are used in small to medium corporate networks, and products used by large WANs, major ISPs, and telecom companies for backbone switching. The first group may have backbones that are switched, but that's not what I'm talking about here. I'm talking multi megabit national and international backbones.
FORE seems to have more of a presence the first group (corporate LANs), and alot of competition in the second group. Where is ATM important today? Group 2. People that are looking at ATM need oodles of bandwitdh. Corporate networks usually don't need that much in their LANs. You can move a hell of a lot of data at 10MBps, and if not 100MBps is a cheap upgrade, and easy to integrate into an existing Ethernet environment. ATM is rarely even considered at the LAN level, unless there is need for video distribution, or some large bandwidth application. Even then ATM is not a given. In the WAN world, in order to take advantage of ATM, you gotta have the bandwidth to use it. Anybody checked to see what bandwitdh costs these days? Again, this is for the big players, and I don't see FORE as the market leader there. Names like CSCC, and CSCO come to mind. It is not coincidental that Cisco made a real big deal out of finding a switch vendor and ended up with Stratacom when they couldn't get Cascade.
The closer you get to the desktop, the less and less important ATM becomes. Even FORE in their recent "award winning" RFP, uses Ethernet NICs, instead of their own ATM adapters.
Which brings me to my next point, Integrated Solutions.
Corporate buyers are going to look toward providers that will cover all their network transport needs. Even if a corporate LAN/WAN will use ATM, it will come from a supplier that will integrate it with other requirements. I see names like CSCO (a no brainer), IBM, CS, COMS, and XYLN (my personal favorite among high risk networkers) providing the boxes. If there is ATM in there, maybe it will come from FORE, but will come with a CS or other label on it.
I am less familiar with the high end market (group 2) so I won't comment on FORE's position there, as I don't really know.
The "Report Card" and "Well Connected" Controversy.
It was suggested in a past post that Network Computing Magazine contradicted themselves somewhat when they did not give FORE top marks in in one review and when on to give it a award in another. I believe that the report card where Cisco appeared to edge out FORE (I couldn't read it because my browser didn't seem to want to support the Java app on the link) was for ATM backbone or edge switching. The commendation FORE earned in the well connected issue was for a more restriced catagory of edge switches. And in the catagory for ATM Campus Backbone Switch, Cisco again took the cake. Since the products they are comparing vary so widely in price and function, I don't know how much creedence I would put in any of it anyway.
In Summary
I am not a FORE basher, and take exception to being called one by any number of people on this thread that seem want to go around enveloped in a fog of belief that FORE's stock price can only appreciate.
I only wish to point out there are some large risks with this stock (as with many stocks, especially in this sector). Just because the stock has plummetted in recent weeks/months, does NOT mean that it cannot fall farther.
Best of luck to all those long on FORE. I'd like to see 30 in the next few months, but I won't be surprised if I see 12 first. And if the next earnings report doesn't show a noticeable return to growth, I may rethink my position, and take my lumps. |
