To: John Pitera who wrote (256 ) 1/12/2000 1:58:00 PM From: John Pitera Read Replies (2) | Respond to
NTAP---Tech--SAN----Network Attached Storage--- dominates the market for Network Attached Storage (NAS) devices, known as filers, as was mentioned in the article describing the entire NAS industry. Network Appliance holds about 40 percent of the NAS market because of its Write Anywhere File Layout (WAFL) systems. WAFL is such a success because it is the closest thing that NAS has to true data sharing. . WAFL substantially increases the efficiency of heterogeneous data storage . In addition to being the leader in NAS, Network Appliance is also a leader in the explosive market of Internet caching . Internet caching aims to lessen the strain on bandwidth and improve performance by moving frequently used data closer to web surfers . In other words, a site is faster when a cache is used. growth in both revenues and earnings. The company has grown its revenues 574 percent from around $18.5 million in the first fiscal quarter of 1997 to $124.7 million in the second fiscal quarter of 2000. Over this time span, the company's revenues have increased an average of about 14.6 percent each quarter for 14 consecutive quarters. On a year to year basis, revenues increased 90 percent from $65.6 million to $124.7 million. Quarterly earnings per share (EPS) have also grown steadily with 10 straight quarters of EPS growth. For the year, Network Appliance's EPS grew 73 percent from 5.5 cents a share in the period one year ago to 9.5 cents per share in its last quarter. Moreover, analysts project that Network Appliance will grow its earnings 47.4 percent a year over the next 5 years. This degree of growth gives Network Appliance a significant amount of investment potential because the company has a history of strong performance. In fact, Network Appliance has so much potential that it was added to the Wall Street Aggressive Ten for 2000. major storage, networking, and software companies including Oracle {ORCL}, Legato {LGTO}, and Brocade {BRCD}. In the Oracle deal, Network Appliance's products will be integrated in Oracle's 8i Appliance for the rapidly growing e-business market. Network Appliance and Legato announced on November 30 that they had delivered a comprehensive solution that ensures continuous availability of mission critical applications which allows protection from application downtime. The Brocade deal aims to combine the architectures of NAS with Storage Area Networks (SANs) to form a single, optimal data storage solution. risk for Network Appliance is the competition that looms on the horizon. Since EMC {EMC} is working on NAS products for the future, it will undoubtedly enter the NAS market with all of its storage muscle. In addition to competition from the world leader in storage, Network Appliance should also face stiff competition from major companies in both NAS devices and cache products. In NAS devices, companies like Sun {SUNW}, Hewlett-Packard {HWP} and IBM {IBM} could give Network Appliance a run for its money. In cache, the company has to battle the likes of Cisco {CSCO}, Cacheflow {CFLO}, and Novell {NOVL}. Only a few other storage stocks like EMC, Legato, Brocade, and Crossroads {CRDS} can rival Network Appliance in investment potential. In the short term, Network Appliance's stock could continue to soar to all-time highs if it beats earnings expectations for the fourth straight quarter when it reports earnings on February 15. Over the long term, Network Appliance represents one the best vehicles for investing in the storage needed to harness the data explosion created by enterprises and the Internet.
