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Technology Stocks : Network Appliance -- Ignore unavailable to you. Want to Upgrade?

To: DownSouth who wrote (1642)	11/17/1999 9:56:00 AM
From: buffalogrif	Read Replies (1) \| Respond to of 10934

"The next EMC" - Merrill Lynch moring notes Outlook: The Future Is NAS? We are increasing our revenue and EPS growth rates as NetApp's investment in sales and engineering infrastructure starts to pay off. For F3Q, we look for revenue of $140 million (up 12% sequentially) to generate EPS of $0.21, up .02 from our previous estimate. The quarter (November through January) is smack in the middle of Y2K, but NAS and caching appear to be less affected by Y2K lockdowns than other systems. For F2001, our revenue estimate increases from 58% to 60% due to accelerating sales to Internet companies, increased brand recognition, and improved sales productivity by both direct sales people and those of Dell and Fujitsu. Our EPS estimate for F2001 is $1.10, a conservative 41% increase. Inktomi gives into the Enterprise and Appliances. Management claimed victory in the "war" with caching competitor Inktomi as that company announced its intention to penetrate the enterprise market with Intel-based appliances. Inktomi has a lead in the U.S. ISP market based on its software + general purpose (Sun) hardware strategy and has often played the foil to NetApp's appliance pitch. Inktomi's version may be another so-called-appliance, created by putting a friendly face (GUI) onto a complex existing system. Such pseudo-appliances have had little success thus far. NAS is the wave of the future, according to soothsayer George Gilder. NetApp's stock shot up $13 late in the day Tuesday after the release of the Gilder Technology Report. Gilder eloquently explains that storage and bandwidth improvements are outpacing Moore's Law, providing economic and technological incentive to store vast amounts of data on disk and locate it throughout the Internet. Historically, the tech industry wastes those things in abundance, which should include bandwidth and storage, to provide for scare resources (time and transmission speed that is limited by the speed of light). Network-attached storage (NAS) could be a disruptive technology, using Clayton Christensen's vernacular, that attacks both server-attached storage and SANs from below. NAS leverages the rapidly expanding Ethernet growth curve and years of networking evolution. Mr. Gilder believes NAS marginalizes fibre channel-based SANs. If correct, this thesis may mean that NetApp is more than a cute niche vendor and could become the next EMC.