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

To: kas1 who wrote (3063)	4/10/2000 2:33:00 PM
From: pirate_200	Respond to of 10934

> They have been "warning" about this for years, haven't they? > > To worry about shrinking margins from increased capacity is > to forget that what matters to fundamentals is not margins > in percentages, but earnings in dollars -- it's better to > sell more expensive systems (more profit), even if the > margin % is low For these larger terabyte(s) systems, maybe NTAP will sell more higher margin add-on stuff like clustering, remote mirroring and advanced backup to go along with it. The hard part to get across is that even though the cost per megabyte of storage will continue to get ridiculously low, the actual value of that megabyte of data in the internet business world is continuously increasing in value to businesses as they do more business online and things like data mining. Hopefully NTAP continues to keep high margins because of their unique ability to offer high performance and low administration of a customer's data.

To: kas1 who wrote (3063)	4/12/2000 10:02:00 AM
From: DownSouth	Read Replies (1) \| Respond to of 10934

kas, NTAP discusses its margin concerns every quarter. It goes like this: Increasing storage capacities and larger average filer capacity sold affects gross margin because disk drives are a commodity item and have low margins in the industry. To counter this effect, NTAP is continually providing new software options and promoting the sale of those options to its customers. Software margins are extremely high. So far, this strategy has been effective, as gross margins have been relatively stable quarter to quarter.