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Technology Stocks : All About Sun Microsystems -- Ignore unavailable to you. Want to Upgrade?

To: cfimx who wrote (31518)	5/4/2000 5:03:00 PM
From: JC Jaros	Respond to of 64865

They don't have the sense of humor I have. --- Man, you can say that again! They're practically hostile. I came bopping in all friendly, with a basket of goodies for grandma and they practically bit my *head off! Maybe it's just a bad time... -JCJ

To: cfimx who wrote (31518)	5/4/2000 8:47:00 PM
From: jhg_in_kc	Respond to of 64865

If storage is central, than servers are peripheral; Emc ascends, and the Sun sets, so it is written. ***************** Forget Microsoft, EMC Rules "You will increasingly see servers as a commoditized market." (Money mag) By Eric Moskowitz Wall Street has found a new tech bellwether to love. And its name is EMC. Microsoft for years was the one tech you had to own, but then the Department of Justice decided to change all that. Cisco and Sun are considered by many to be the new bellwethers, but both are down 10% since the Nasdaq correction began March 10. EMC is off just 1%. EMC is to enterprise storage systems what Cisco is to networking gear and Sun is to servers--the unmatched leader. "Storage capacity has increased 1,100 times this decade, or about as much as our stock price," says CEO Mike Ruettgers, who sat down with money.com after a morning session with analysts on Tuesday. He was being modest: EMC is up 55,000% since April 1990. Back then, IBM's massive mainframe systems were what Fortune 500 companies used to run networks and store data. Ten years later, EMC dominates the storage industry, with nearly 5 times the market share of IBM. Storage systems, which are to electronic data what warehouses are to electronic goods, have become crucial to companies in the digital economy. As the amount of information that can be stored increases, the more capacity a company needs. Enter EMC and its systems, which have capacities three times those of the competition. EMC does have a few companies to worry about. Network Appliance has come out of nowhere to push the storage industry into new technologies. IBM and HP remain forces. And industry experts say the real battle for supremacy will occur on the server/storage front. These days Sun can't make enough servers, the boxes which web sites use to "serve" up pages to a browser. Sun is packaging its own storage devices with its servers. There's logic to the pitch. The boxes that hold the data have to work closely with the servers that present pieces of it to end users. "Clients tell us they don't want to buy storage from another vendor than they buy their servers from," says Denise Shiffman, Sun's VP of marketing. Her company, she notes, has recorded contracts with AT&T, MCI and Disney for combined server/storage systems. Ruettgers says Sun is moving in this direction because it's the only way the company can climb the "profit margin ladder." That's because, according to EMC senior VP of product management James Rothnie, "You will increasingly see servers as a commoditized market." Ruettgers points to an International Data survey that says the sales mix between storage and servers will be 80-20 servers by 2002, compared to 50-50 now. That's troublesome for companies in the middle of the Internet, between the user and the storage system. "You've got to get out of the middle [market], or you are going to get squashed," Ruettgers says. If he's right, Sun, Dell IBM and other server makers should see margins start to decline unless they can diversify. EMC's stock trades at the ghastly prices of other tech bellwethers; at $134, it sells at 91 times 2000 earnings. Ruettgers expects to hit $12 billion in sales (up from $6.7 billion in 1999) in 2001. That should translate into 30% earnings growth this year and next. "I don't quite have $12 billion as a [sales] target," says Goldman Sachs analyst Laura Conigliaro, "but the storage market is moving at an awfully fast pace and EMC's big competitors (IBM, HP and Sun) haven't been able to get any traction in storage yet." Goldman rates EMC as one of the seven tech stocks to buy in this volatile market. Microsoft and Sun didn't make the cut.