Chris,
I'll try to give you a "mature" response to some of your questions and concerns. <g>
I dare say that ALL of us long-time ANCR bulls would like nothing better than to see IMMEDIATE results. That, after all, is why we invested in Ancor in the first place. I would also say that it is likely that most of us have called the company MANY times, to make sure that things are still on track, and I am confident that some of these calls were not as civil as I would have liked them to be. And based on the posts here, all of us are getting the same story. Could they be lying to us? Yes. Admittedly, I think there was some funny business going on under the previous regime, and ANCR and its shareholders continue to pay the price. At least some of the frustrations with ANCR should really be laid at the feet of those who got us here in the first place.
However, I have spoken to John Shaughnessy, Cal Nelson, and one of their engineers over the last 6 months, and I have NEVER gotten the impression that I have been lied to. Under the previous leadership, I did not have the same impression. (I'll leave names out of it, at this point. Those of you who follow the company closely can probably figure it out.) What I have gotten is some "I'm not going to go there" or "I can't talk about that" statements, but I don't consider that unusual. One time I joked to John S. that I could tell what they were up to, just by what he WOULDN'T talk about. <g>
You are right, we DO own the company, and we have some right to see it run correctly, and profitably. That's why the absolute uproar surrounding the Sequent fiasco, and all the other nonsense that went on around that time. That is also why some of us are willing to give the new management team sufficient time to turn things around. Make no mistake about it, this is a turnaround story. Earlier this year, ANCR was truly as close to being a "dead company" as one could get. I just happen to think that significant progress has been made, on the technical, management, and sales fronts. We can see the progress on the technical side, with the release of the MKII switch. Management changes also are visible. We won't know for sure about sales until we see more contract announcements, or when the numbers are released.
As far as the future of Fibre Channel in general, and switches in particular, keep in mind that even if switches only capture 5% of a $10 Billion market, that's still $500 Million. (Someone check my math, my calculator doesn't do billions. <g>) Split $500 Million between Ancor, Brocade, McData, Arcxel, and somebody else, and you still have $100 Million apiece. Also bear in mind that due to their complexity, switches are a higher dollar, higher profit item than adapters and hubs.
I compare the Fibre Channel market to the Ethernet market. Back several years, nobody thought you had to go faster than 10 megabits/second. (I had some customers installing 2 megabit/second Arcnet.) And nobody in their right mind thought you needed DEDICATED 10 megabit connections. (Hubs were MORE than plenty.) Now, virtually all new installs have at LEAST dedicated (switched) 10 megabit/second connections to the desktop. Anything that requires more throughput will have a minimum of shared (hub) Fast Ethernet at 100 megabits/second, and many are moving to dedicated (switched) Fast Ethernet to the desktops. All those high speed connections to the desktop mean that faster server pipes will be needed. (Gigabit Ethernet or Fibre Channel fill this need nicely.)
Another often overlooked factor is that when you get all these high-speed computers with high-speed connections, you need to handle the STORAGE side of the equation. Demand for server storage is absolutely skyrocketing. SCSI has speed AND distance limitations compared to Fibre Channel. We are used to talking only about the throughput advantage of Fibre Channel over SCSI, but the distance advantage is very real, and is often overlooked.
The drive makers, such as Seagate, Quantum, and recently Fujitsu haven't decided to use Fibre Channel because they have nothing better to do with their time. They are using it because it solves some problems, namely increased speed, scalability, and distance, reduced cabling complexity, and more. The fact that the drive makers have adopted Fibre Channel MAKES it the defacto standard. If you are going to connect to the next generation of storage, it looks like it will be with Fibre Channel. I've tried to make this point before, but these drives won't have Gigabit Ethernet ports on them, they will have Fibre Channel ports. That's why I was pleasantly surprised when the new switch had 8 FC/AL ports, instead of just 4.
I believe that means that Ancor is serious about courting the Fibre Channel storage market. But we all have to remember that at this point in time, there really isn't much of a Fibre Channel storage market. Yes, you can buy bare FC drives and some FC RAID boxes, but there aren't many companies that are volume shipping Fibre Channel in high-end systems, yet. The big players are still developing the hardware and software. Yes, they've made announcements, but I believe we are still a couple of quarters away from volume shipments. How does that affect Ancor? Simple. In order to ship something in a couple of quarters, OEMs must work with their Fibre Channel drive, adapter, hub, and switch vendors NOW! I believe negotiations are ongoing NOW, with Ancor, Brocade, McData, Arcxel, and all of the other players, in relation to these next-generation storage devices. Will Ancor get all of them? No. Will they get some of them? I think so. Are they in a better position to get some of them because of changes in the management and sales areas? I think so.
Another problem we have is that there are some who simply want the stock price to go up, and they don't care how it happens. That's the kind of logic that got ANCR into trouble before. I would like the company to be a long-term success, showing improved revenues and earnings every quarter as the overall Fibre Channel market expands. If that happens, the stock price will go up. Ancor has a long history of disappointing. I want them to start surprising, and I believe we have the management team to make that happen. Have I been wrong before? Yes. One thing I do know is that it will never happen fast enough, so everyone still has to make their own investing decisions.
I understand that you aren't trying to be an antagonist, and I appreciate your reasoned arguments.
Craig
P.S. I'm still paranoid. (And windy.) <g> No comments, George. <g> |
