<<Regarding management-
a) 3com- the Robotics deal and insider sell off gave be the creeps. I lost trust in
Benhamou and co.
b) Bay- Dr. House seems like a good guy, but inherited such a mess.
c) Cabletron- Just a mess with no one left holding the bag.
3 of the big 4 may have trouble keeping their mind on business, with all the internal
turmoil. I think there is opportunity.
I am watchful of Intel. CSCO, mrvc does well in avoiding their turf.>>
Regarding management, I think you are right on. A mess is always difficult and long-term to clean up. CS and BAY and COMS all have problems with large amounts of legacy networking products (shared hubs, 10MB, etc) that are now low margin, but have to be maintained until they can transition their products and customers to newer technology. It may look like it is the management having trouble transitioning, as UBS says, but I think it is more of a product mix and cost structure (overhead) issue.
MRVC is (I think) the #5 enterprise networker now (where does Xylan fit in?). Numbers 2,3,4 are all struggling, while MRVC is thriving.
CSCO has the high end of enterprise networking (at $250/port or so), and they want into the low end, but the question is can they make money at $100 per port? MRVC can, and at the low end the customers don't need all the bells and whistles that CSCO offers (at premium prices), so customers are much more price/performance sensitive.
It appears to me that MRVC has been very smart here with their aggressive pricing. This is giving CS, BAY and COMS fits, while keeping CSCO at bay also (no pun intended). Yes, there does appear to be opportunity here. |
