How many more quarters do you expect it to be before WIND's revenue and earnings begin to reflect its true potential?
First, we have to agree on WIND's true potential. If WIND were concentrated in a single lily pond, like Cisco’s IP routers or EMC’s networked storage, and its ship came home, its potential would be triple digit growth for a few years, followed by a consolidation and nominal growth, or worse if the pond was emptied by a new disruptive technology. WIND is not concentrated and, like Microsoft before it, is unlikely to experience exceptionally high growth ever. My expectation is that two or three lily ponds will push overall company growth to over 40% and as much as 60%. As these lily ponds mature and growth slows accordingly, other lily ponds should be at the point of picking up the slack. WIND's true potential, therefore, probably is sustainable growth for years roughly in the 40% to 60% range.
It is possible that WIND accelerates much faster for a time if one of its lily ponds literally explodes to the point that it transforms the company to being that lily pond, at least in terms of revenue concentration. That could only happen if the lily pond offered an extremely high ASP product, like a network storage/network equipment reference design, that became a must-have in SOHOs and the enterprise – certainly not something to count on or even to desire necessarily.
Assuming the former defines its true potential, then the question boils down to when will one or two lily ponds really start to impact the overall numbers?
My guess is that server appliances will lead the way. It has been developing and growing rapidly for years, and with the recent announcement and GbE ramping, it should start to impact the company noticeably. I can’t emphasize enough the role of synergy between all the appliance components in getting these fundamentally related technologies to jump-start. If iNICs become essential with GbE, for example, then iRAID, iSCSCI, and iNP become no-brainers, and the combination becomes a huge opportunity for WIND, with an insurmountable barrier to competition.
I wish I could answer your question concretely now, but I need to do more research on GbE and the iNIC, and related market potential and timing before I can venture an estimate on time. (Timing is the most difficult thing for me to forecast.) I promised Brian Lempel I would do exactly that for server appliances on his lily pond site.
Allen |
