<<3). What make MRVC customers to buy from MRVC, instead of CSCO ?>>
This post was conspired against by the gods of the Internet as twice,
my 56K modem lost carrier when I was within the last three sentences.
Therefore, it must either be meaningless or exceptionally good <VBG>
CSCO is very big in the ENTERPRISE LAN environment - the largest
corporations that have the largest and most complex networks. There
the interface and connectivity demands and the vendor loyalty aspect
(mgt tends to stay with their preferred vendors) override the price
consideration, and CSCO will continue to do well - at CSCO's higher
prices. CSCO however, has a much higher cost structure than MRVC and
this market is not growing as explosively as the WAN Telco/ISP market
is currently.
However, there are many many companys in the world that are smaller, or
have simpler networks and where price IS an important consideration.
Here MRVC's products will continue to be extremely attractive.
Remember that the FE/GE market is projected to grow from 70M in 1997
to $2.9B by 2000. This is a HUGE new market and MRVC will IMO actually
increase it's percentage at the low end as the market grows larger.
Two final points
MRVC also has a thriving fiber optic product business that is growing
rapidly in it's own right, although overshadowed by the Networking
Division. Currently this is 25% of revenue. The points are that as you
look further into the future, fiber products will only grow more and
more in demand, and that MRVC's fiber capability will actually
KEEP MRVC's networking products at the highest performance, highest
density and lowest production cost as time goes on.
Having this combination of high performance and high density network
products, a thriving fiber optic capability and an extremely low cost
structure is something other networkers can only dream about.
Finally the end-to-end vs niche issue. MRVC can continue to do
exceptionally well in it's niche role, IMO for the forseeable future,
but I think that it is extremely attractive to many companys, and
therefore MRVC will highly likely be doing it's niche function within
the product line of a larger company within two years.
MRVC's future is bright whether it stays independent or gets bought
out at a high price. From an investment perspective, I think
MRVC will hit $50+ sometime in 1998 and if they stay independent, they
can hit $100 by the millenium (2001). There are few public companies
that have a shot at quadrupling their stock price in three years, but
IMO MRVC is one of them - actually from it's low last week this is
only $84, a clearly achievable goal, IMO. |
