>Well, that sector is starting to get pretty crowded too, with companies as diverse as NSM and HWP saying that they are getting into it, not to mention NTAP and other existing ambitious cos. Suppose that business becomes the next sinkhole?
Relative price of storage appliance using current model: 100
Relative breakdown: vendor net margin 25, HD maker net margin 5, cost of goods, R&D, SG&A, etc. 70 (vendor 15/HD maker 55).
Relative price if HD maker vertically integrates appliance building and sells through OEMs: 85
Relative breakdown: reseller net margin 5, HD maker net margin 10, cost of goods, R&D, SG&A, etc. 70 (reseller 5/HD maker 65).
As per the Forbes article, "In the fall it plans to introduce a $1,000 storage device that can be used as a miniserver, linked to the Net. Brown calls it a "plug-and-play" appliance: All you'll need is an Ethernet port into the network and a power plug."
Okay, $1000 won't even buy you a 36GB drive, so this is ain't RAID yet. But what if a customer says, "Hey, good idea. But I need more iron." Will QNTM snub this market segment? I think not.
Funny thing is, I think this belongs more appropriately in the QHDD tracker rather than the QDSS tracker... But perhaps they're gonna make the drive tracker the ditch into which they throw all their low-margin operations, kinda analogous to the KO/CCE arrangement. No matter, it still can't fetch a worse valuation than WDC. |
