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Technology Stocks : Network Appliance

NTAP 111.56

+2.1%

Nov 28 9:30 AM EST

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To: DownSouth who wrote (5347)	11/24/2000 9:37:03 PM
From: riposte	Read Replies (2) of 10934

Trouble in Store for Data-Storage King? In the December 4th issue of Business Week... A generally negative article on EMC, with several excellent references to NetApp. [TEXT DELETED] Having masterfully managed EMC from obscurity to market leadership in eight years, knocking off IBM (IBM) in one of its core franchises along the way, Ruettgers' confidence is understandable. As other tech stocks have been taken to the woodshed and punished for falling demand or squeezed profits, EMC has scarcely been nicked. Its shares today trade at about $80, 10% over their price in March. The reason? Gross margins of 57% and sales and earnings gains of 30% to 50% in recent years. EMC is the class act in the $31 billion-a-year storage business, which researcher Dataquest Inc. expects to grow at 19% a year until 2004. The company's storage machines--arrays of hundreds of disk drives that hold millions of documents--dominate corporate data centers. Sound too good to be true in today's doom-and-gloom tech market? It just might be. The storage giant faces a growing roster of rivals--from reinvigorated old-timers such as IBM to upstarts like Network Appliance Inc. (NTAP)--who say EMC is a vulnerable target with a shrinking technology edge. They may soon have even more company. Venture capitalists have tripled their investments in the sector, to $411 million, since 1998, says researcher VentureOne Corp. And customers who have long been willing to pay a premium for EMC machines are tiring of pricing policies and product strategies that lock them into using expensive software that works only with EMC's hardware. [REMAINING TEXT DELETED] businessweek.com (but a subscription is required) Have a great weekend, Steve

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