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Technology Stocks : All About Sun Microsystems

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To: JDN who wrote (43695)	6/7/2001 9:33:10 AM
From: Bill Fischofer	Read Replies (2) of 64865

Look to Storage if you want to know the future In the enterprise space the relative growth rates of storage dwarf processing growth. This growth already dominates and will soon represent the overwhelmingly dominant share of corporate IT spending. So if you want to project SUNW's future growth rates stop focusing on processing and instead focus on storage. This is why SUNW's main competitive threat has always been EMC, not Wintel. As we move further into the post-server era processing simply becomes less important as a sales differentiator. It is no longer the center of corporate IT strategy and hence the "Wintel threat" is not so much that Wintel gets better as that the category (central processing) is marginalized and this leads to commoditization. This is why all the fuss over USIII vs. Power4 vs. Itanium here is misplaced. MIPS is the new commodity and the real value (and margins) will lie elsewhere. Itanium will inherit this space not because of its superior architecture or any other lofty virtue, but simply because INTC can crank out commodity MIPS cheaper than anyone else thanks to their huge volumes and economies of scale.

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