Looks to me, like your first and second points are mutually exclusive. That is, you can see the future as one or the other, but not both, because they can't exist together.
Let's say the venture capitalists and the big tech companies had looked at storage, and collectively said, "not much growth here, and it'll probably become a commodity, so even if we get sales growth, it won't translate into earnings growth". That's your point #1, right? If that's what they saw, would they be targetting storage? Of course not.
Ask yourself, why are so many companies targetting storage? The only possible answer is, they see it as a growth market. They see the $ spent on storage, and specifically the method of storage that NTAP has pioneered, as growing. In the foreseable future. And they don't see it as a commodity business. How many CEOs are saying, "we're going to have a big push to enter such-and-such a market, because we're targetting low-margin businesses, and we're sure this market will have, over the long-term, constant pricing pressure and overcapacity."??
Now, maybe they are all wrong. After all, we've seen a lot of smart people decide that there was a market for satellite phones, and spend a few billions in other people's money, finding out there was no market. Mistakes happen. But when everyone wants into a market, that's usually a good signal that it's a good market to be in, for investors. |
