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Strategies & Market Trends : Gorilla and King Portfolio Candidates -- Ignore unavailable to you. Want to Upgrade?

To: Tom Ardnij who wrote (11471)	11/30/1999 12:07:00 PM
From: Greg Hull	Read Replies (1) \| Respond to of 54805

Tom, I don't know if you found the reference by Paul Johnson to Brocade and possible gorilla status. Here is one reference: redherring.com "Paul Johnson, the analyst with BancBoston Robertson Stephens who reiterated a Buy rating on the stock today, says that shares are rising on the prospects for Brocade's storage switches, based on the Fibre Channel networking architecture. The switches enable companies to build storage area networks (SANs), which are networks specifically designed for connecting computer servers to high-capacity storage systems. "This company has a chance to become what we call a 'gorilla' in the market," wrote Mr. Johnson, who is also a coauthor of The Gorilla Game: An Investor's Guide to Picking Winners in High Technology, a book about how companies win share in emerging markets." When I first read this quote I was disturbed - was anyone else? Here is an author using his "literary credibility" to endorse a company his firm helped take public just 4 months earlier. While I would expect him to speak favorably of Brocade, to use his "Gorilla Game" status as part of the endorsement crossed a line in my mind. It diminished my impression of him as a disinterested author, and called his credibility into question regarding the assessments he makes in the book. Part of what disturbed me is that it seems most likely that the fibre channel switch market will be a Royalty game. It seems unlikely to me that the switch makers will be calling the shots for this product. Added to that is the fact that SANs must still be custom configured for the equipment used on the SAN, and I believe simple installation (PnP) is part of the tornado phase, is it not? Finally, it is extremely early in the SAN game and not all of the revenue reported by Brocade is from the SAN market. Johnson's remarks were made 3 months ago and I will be surprised if Gorillahood can be determined 6 months from now. I do not consider myself an expert in Gorilla Game assessments. As an exercise to help learn the material better I was going to attempt an assessment of the Fibre Channel / SAN market. I'm hoping to receive coaching from a number of you experts, of course if someone else makes the presentation first, I'll just continue to freeload. Greg