CSFB Report from Day3, Friday. I am hoping Paul is busy with the focus of his daily reports, mainly CSCO and SONS and to a lesser extent APKT. Actually, screw the other two, work on Sonus<g>
Key Takeaways - Day 3
Presenting Comm Infrastructure Co.s.. Communications infrastructure companies
presenting on Day 3 of the Credit Suisse Technology Conference in Scottsdale, AZ included
Acme Packet, ADVA, Foundry and Packeteer. APKT and ADVA are leveraged to the carrier
comm. infrastructure market while FDRY and PKTR are primarily leveraged to the enterprise
networking market. All four address growth pockets in the communications infrastructure
industry: APKT, the (carrier Voice over IP) session border controller market; ADVA, nextgeneration
optical infrastructure; FDRY, routing and Layer 4 – 7 traffic management; and
PKTR, L 4 – 7 traffic management. All four offered upbeat outlooks regarding their respective
market opportunities and competitive positioning. We set forth below what we deem to be the
key takeaways from the presentations as they relate to our coverage universe.
Enterprise Networking Strength. FDRY’s presentation provided solid third party support for
CSCO’s increasing confidence regarding the outlook for spending on networking infrastructure.
In particular, echoing the opening keynote comments of John Chambers, Cisco’s CEO, Mike
Iburg, FDRY’s Treasurer and Director of IR, noted a pick-up in enterprise spending on
networking infrastructure driven by the connectivity and bandwidth demands of enterprise
applications, with even CRM and ERP applications driving network traffic. Like Mr. Chambers,
FDRY observed that the network has become the foundation for virtually every enterprise
application and as such is taking an increasing share of enterprise IT spending. Based on
observed market and customer activity, FDRY specifically noted what it believes will prove to
be a four to five year upgrade cycle for next-generation Layer 2 – 7 infrastructure.
APKT(OP/$21TP) Andy Ory, Acme Packet’s CEO, delivered an upbeat presentation on
Wednesday Day 3 of Credit Suisse’s 2006 Technology Conference being held in Scottsdale,
Arizona. Key takeaways follow:
• Echoing Sonus’s comments from Day 2 of the conference, Mr. Ory noted that he expects
acceleration in the carrier Voice over IP market and the session border controller market in
calendar 2007.
• While noting that the $108 – 112mln FY07 guidance offered on APKT’s recent third quarter
conference call is grounded in the datapoints that he currently possesses, Mr. Ory also
noted that potential upside far exceeds the prospective downside risk to this guidance in
terms of both likelihood and magnitude.
Mr. Ory’s comments were consistent with our view regarding the strength of the session border
controller opportunity and APKT’s leadership in addressing this young, robust market
opportunity. While we are not changing our estimates, we too believe that there is strong
potential upside to our FY07 estimates and FY08 estimates. |
