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Technology Stocks : EMC How high can it go? -- Ignore unavailable to you. Want to Upgrade?

To: JRI who wrote (7410)	8/10/1999 11:03:00 PM
From: jhg_in_kc	Read Replies (2) \| Respond to of 17183

<<Dead money for 6 months?...poppycock....>>I absolutely agree. I just got thru reading the WSJ and NYTimes articles on this deal. I come away with 1. EMC "virtually stole the company" 2. The product Digital makes for medium sized business storage is superb, even ahead of its time when it came out(it moved storage from SCSI to fiber channel as a way to send and receive computer data), but the company had no sales force and had been selling it to computer systems manufacturers rather than to the customer. EMC has the DIRECT sales force plus will be able to fill engineering job vacancies on EMC's tech side which had been restraining its growth. pLUS will; now be able to target middle sized Internet businesses. 3. EMC even has a use for the Aviion, or at least a part of it, its "NuMa" technology, a method for having multiple processors use a common supply of memory to manage storage a la Sequent which IBM bought. Even in this dismal market, I think EMC is a buy in the 50s. The more I read, the more I can become as enthusiastic about it as I was for Dell two years ago. A final point, its CEO is a dynamic straight shooter who defends his company against attack and thinks it hasn't got "enough respect." He may be superior to Michael Dell who of late, has been silent or even somewhat(implicitly not explicitly) misleading. You can go to www.NYTimes.com and find its EMC article free. EMC is one of the only bright spots today. do not sell this stock short because of uncertainty caused by an acquisition and the appearance of arb sharks. jhg

To: JRI who wrote (7410)	9/9/1999 8:34:00 PM
From: jhg_in_kc	Read Replies (1) \| Respond to of 17183

jRI, and all, can we assess the Dell threat? <<(CBS.MW) -- Dell's $340 million purchase Wednesday of ConvergeNet Technologies is likely to make for the company's strongest move ever into software. It represents a change for hardware-focused Dell, which up until now has shown little interest in having Dell-owned brain power behind its computers. For 15 years, Dell has been happy to have other company's applications at the helm of its machines. Dell broke with its hardware-only tradition by buying ConvergeNet -- its first corporate acquisition ever. It will help the company become a stronger force in the lucrative computer storage market, analysts say. "This is Dell?s most ambitious software project that I can think of," said John McArthur, an analyst with market research firm International Data Corp. in Framingham, Mass. "And it?s certainly the largest intellectual property development Dell has made." Like many personal computer makers, Dell sinks less than 2 percent of its revenue into research and development, and has devoted few resources to its own software. Dell (DELL: news, msgs) plans to swap 6.9 million shares of its stock for all outstanding shares and options of privately-held ConvergeNet. The deal is expected to close in 60 days and the board of directors for both companies have already approved the acquisition, Dell said. Dell, based in Round Rock, Texas, said it would incur a one-time after-tax charge of 5 to 7 cents a share as a result of the transaction. Big money The purchase is key to Dell's future not only in storage, but in all of Dell's enterprise computing business, says Nick Allen, an analyst with Stamford, Conn.-based Gartner Group Inc. Storage is big money. Between 60% to 70% of the cost of server computers, which are used by nearly all large companies, is tied up in storage, he says. To that effect, ConvergeNet will be a boon to Dell. The 120-employee San Jose, Calif.-based company focuses on a hot storage technology called storage area networks. A so-called SAN is made up of software and hardware that combines disparate data storage units into one large data farm that resides on a network. SANs promise to save large corporations money on computer hardware. It also allows companies to better share data across their businesses. Becoming the SAN-master is the next goal for Dell and its fast-growing storage empire. Dell first started to sell data storage hardware in May 1998. The company rose fast, to become the No. 7 seller of storage hardware worldwide, behind Compaq Computer Corp., IBM Corp. and others. Since, Dell has become the fastest-growing seller of storage products. It branched out to offer a wealth of hardware and software. Dell executives say they soon plan to take over the No. 3 spot in storage sales. To-date, the Dell-branded products are sold mostly to work with its own computers. But that will change in 2000, when Dell will ship its first product based on technology from the ConvergeNet purchase. Dell plans to have a test version of ConvergeNet by year's end. The ConvergeNet hardware and software product will be what a company spokesman describes as a "storage domain manager". Essentially, it's a computer with Dell-branded software that sits inside corporate networks between the hardware used to store data and the server computers used to dish information. It's supposed to speed the way data is stored across a computer network. "There?s not a product on the market like it today," said Jerele Neeld, a spokesman with Dell's Enterprise Systems Group. In the zone The software in ConvergeNet is key. It will allow Dell to offer a product that controls data movement, zoning and data protection -- virtually all aspects of storage management. Best of all, the software will work with computers and storage equipment from all but a few of the leading technology companies. That means, Dell technology could be used as the brains behind corporate storage networks, despite what other types of equipment companies use. "Our customers want storage technology from Dell that connects with any open-standards server," said Michael Lambert, senior vice president of Dell's enterprise systems group in an interview Wednesday. Dell will sell ConvergeNet products directly over the Internet -- the way the company sells most of its products, Dell's Neeld said. Few if any technology companies have been able to sell complex back-room storage products over the Internet. But Neeld acknowledged he's not sure if customers will be able to configure all of the complex specifications on the ConvergeNet product from the Dell Web site. Dell will face stiff competition, as rivals including Sun Microsystems Inc., Hewlett-Packard Co. and IBM also are stepping up their open storage plans. And all of the computer companies face stiff competition from EMC Corp., StorageTek and other companies that focus almost strictly on storage.