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Technology Stocks : Network Appliance
NTAP 107.22-3.9%10:21 AM EST
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To: John F. who wrote (5586)12/6/2000 3:22:02 PM
From: gingersreisse  Read Replies (1) of 10934
 
EMC will bring out something else that its customers don't usually see--low prices. Tucci says the new products will be about half that of Network Appliance. He also says the company will bring down the cost of storage--even its high-end Symmetrix line--by about 30% per year. That will bring it more in line with products from Sun Microsystems

Anybody have a clue as to how the EMC sales force is reacting to this? I can't imagine they're excited, and if the outcome brings brings down Symmetrix prices, they could have a war on their hands.

This is a classic gorilla issue: if you move a premium product's price lower you will alienate your distributors, and you lose the ability to move iron. If you keep your premium priced product higher, you canibalize it to the lower price alternative, whether it's NTAP or Cross-Stor.

There's another little tidbit in the article: they're converting from DataGeneral's indirect channel to EMC's direct one. A new product line, materially different from what the sales force has been selling, a new and lower price, significantly different attributes from the line they understand, maybe a new comp system based on lower dollars of sales. EMC will have its work cut out for it.

As a holder of both EMC and NTAP, I'm watching this unfold with interest and some fear.

GSR
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