Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

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

To: Greg Hull who wrote (18432)	2/23/2000 1:01:00 AM
From: chaz	Read Replies (1) \| Respond to of 54805

RE: Brocade/Ancor My hat is off to you Greg, and buck, for this most enlightening discussion of a technical area I would not have grasped. Couple of weeks ago, I raised a bit of a stink here about all the mumbo-jumbo, got both stomped and praised, but since, the tone of these posts has come to reflect what I felt was needed. Three observations: First, I now feel I can consider these two as possible investments because I have been given the means to understand them. Second: I can now grasp the notion that this is not going to be a gorilla game, but a royalty shoot-out. Third: Both may do well, but deeper pockets seem more the key in Royalty games, while I look less at that and more at IP in Gorilla matches. Thus, I would today choose BRCD, but would monitor both. Chaz/Thucydidies

To: Greg Hull who wrote (18432)	2/23/2000 1:21:00 AM
From: buck	Read Replies (1) \| Respond to of 54805

Greg, Did you mis-state Brocade's current offering or do you know something we don't know? I don't believe that Brocade has announced anything larger than a 16-port switch. You're correct. I mis-typed. I had McDATA on my mind, a Brocade OEM. Excellent summary of the BRCD/ANCR battle, too. I still think people are giving short shrift to McDATA. But they need to start making some waves, or that shrift won't be so short. buck

To: Greg Hull who wrote (18432)	2/23/2000 8:49:00 AM
From: gdichaz	Respond to of 54805

Greg: Thanks for a first rate, comprehensive job. Almost made me wish I had kept up with Fibre Channel through the years of drought. Your update was perceptive, clear and extremely helpful as a means of explaining Fibre Channel and two of its key players in particular. What your analysis also did for me was that it was a reminder that the very reason I found owning both Wellfleet and Cisco within a basket early on very useful and profitable, fits owning both Ancor and Brocade within a basket almost like a glove. To me Brocade is the Cisco and Ancor the Wellfleet. And perhaps and probably Brocade will be the clear winner as Cisco was, but then having a small piece of Ancor may be a useful hedge. Once more I am reminded that "baskets" are an approach recommended by the GG authors in situations like these - and I for one will continue to employ them when I think appropriate. This might be such a case. But, back to the telecosm. Best. Cha2

To: Greg Hull who wrote (18432)	2/23/2000 9:17:00 AM
From: Bruce Brown	Read Replies (1) \| Respond to of 54805

RE: Fiber Channel Switching Space Greg, Thanks for the excellent post. You wrote: Both of these companies should do well since the market is exploding, but which will do better? That's the $$$ question. I have wrestled with this subject since reading the FM 6 months ago. Does GG address this issue of Brocade being the first out of the gate, therefore the more likely winner long term? Or is this where the basket approach says buy both and let the market tell you? Has the market told us already? If not, when will it? When can you say that Ancor is out of contention for the Gold Medal, and is merely competing for some baser metal? Yes, those are certainly the questions. Whether one bought a basket to play the space or not - the performance has been astounding. Since Brocade's May 1999 IPO - Brocade is up 737% and Ancor is up 340%. Nothing a basket approach should be ashamed of by any stretch of the imagination. Couple that with two other important companies we speak of on this thread in the broader data storage solution arena and you have NTAP with 635% return and EMC with a 124% return since Brocade's IPO. Beats the hell out of 11% return Wal-Mart gave investors for the same time frame. <ggg> In the fiber channel space, Gadzoox had about one forth the revenues of Brocade last quarter, but three times that of Ancor. Gadzoox share price is at $50 - which is far off its high of $109 and change and is -32% below its IPO price. Vixel had twice the revenues of Ancor and VIXL's share price is about $27 (52 week high of $53 and change) and is -35% off its IPO price. For all practical purposes, in my mind, it comes down to Brocade and Ancor as the two to play using the 'basket' approach unless something changes. I have not yet selected Ancor to be in my own 'ecclectic storage basket' with Brocade, NTAP and EMC. You raise a lot of unknowns going forward as to the potential market for the larger hub FC switches and how it might play out between Ancor and Brocade. However, the growth in the need for the smaller switches certainly has been astounding with Brocade emerging as the clear leader. Until we know if any of the other FC switch makers are going to participate in the larger switch market and what the demand is for that market - what does one do? I guess all this does is lead us back to your original questions. Is it possible that the 'inside the tornado' strategy that Ancor is currently executing by going after the niche market of the larger switches is an actual survival adjustment strategy? If this is the case and Brocade or the others do not enter the space because of the lack of a larger market share potential, then how does that alter the game? I'm just thinking out loud and need to go nurse my head cold. BB

To: Greg Hull who wrote (18432)	2/23/2000 9:35:00 AM
From: Mike Buckley	Read Replies (2) \| Respond to of 54805

Greg, Thanks for the detailed explanations and questions. For the first time after several years of trying, your post explained to me in terms I can understand the fundamental difference between a hub and a switch and what latency is all about. I also now realize that the next time I want to cancel a subscription to a magazine I should tell them to change my throughput to zero. That should do it, right? :) Seriously, thanks so much. I saved your post. Now, please explain a router in context of hubs and switches. Thanks in advance. --Mike Buckley