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

To: kas1 who wrote (3278)	5/15/2000 4:53:00 PM
From: DownSouth	Read Replies (3) \| Respond to of 10934

First of all, it is totally unrealistic to discuss EMC doing a MSFT-like strategy. EMC's margins are much lower than MSFT's and giving away hardware is expensive. Giving away software is very cheap. But, be that as it may, taking the leap of faith that EMC could offer NAS at below cost, NTAP would still beat them in the marketplace, imo. EMC's configurations, if based on non-proprietary OS (LINUX) would require twice the hardware (rough guesss) of an NTAP filer to meet the performance of that filer. Simply because standard NFS and/or Windows file layouts being supported by a general purpose OS are very inefficient compared to NTAP's specialized OS supporting the WAFL file layout. The dilemma then becomes that the reliability of the EMC configuration is compromised because more components (points of failure) are required, compared to an NTAP filer. Then when the customer gets a demo unit from NTAP and spends maybe 2 hours (for a complex config) setting the machine up and 2 or more days with EMC's help setting up the EMC machine, the total cost of ownership (TCO) becomes apparent even if EMC gave them the hardware and software. WRT to Christensen, his solution to the dilemma to spin off a separate company with its own products, own customer base, and own sales force to meet the threat from below. As I recall, he believes it almost impossible to fight disruptive technology from the infrastructure (customers, products, sales force, R&D org) of an established company.