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

To: Sam Salomon who wrote (3354)	5/19/2000 9:08:00 AM
From: John Carragher	Respond to of 10934

Dow Jones Newswires -- May 19, 2000 Dow Jones Newswires Network Appliance Plans Aggressive Spending By RICK JURGENS (This report was originally published late Thursday.) PALO ALTO, Calif. -- Network Appliance Inc. (NTAP) Chief Executive Dan Warmenhoven said that the company is committed to invest aggressively to expand its business. "We think there's too much opportunity out there to not pursue new initiatives as fast as we can afford to fund them," Warmenhoven told analysts in a conference call. Warmenhoven and other executives were upbeat in the call, which followed a fourth quarter earnings announcement in which the Sunnyvale, Calif., network data storage equipment maker more than doubled revenue and beat analyst earnings estimates. Network Appliance posted income of $24.5 million, or 7 cents a share, for the quarter ended April 28, up from $10.7 million, or 3 cents a share, a year earlier. The analysts' consensus estimate was 6 cents a share. Network Appliance reported revenue of $200 million, up from $90.8 million a year earlier. That was impressive, said analyst Dane Lewis of Robertson Stephens, noting that the company is "accelerating revenue growth as they get bigger." "The market is growing, probably faster than people have modeled," he said. George Elling, an analyst with Lehman Brothers Inc., said, "The company has seized the market and continues to deliver outstanding results." The opportunities in the market might eventually draw some bigger competitors, he added. But Warmenhoven said the company was tired of hearing speculation about possible formidable new competitors. He dismissed such talk as "shadowboxing with paper tigers." "The competitive environment has not changed significantly," he said. Network Appliance executives also dismissed concerns that their network-attached data storage equipment lacked the capacity to compete with alternative technologies. "We've just scratched the surface of the database market," Warmenhoven said. Shares in Network Appliance were priced recently at 68 3/4 in after-hours trading, down from the Nasdaq close of 69, according to Island ECN. The stock reached a 52-week high of 124 on March 10, up from its 52-week low of 9 27/32 on June 15. Lewis said that some investors might have been planning to sell in the wake of expected strong news from the company and a recent run-up in the stock price. Fourth quarter sales growth was driven by sales force expansion and year-end sales commission incentives, said Jeffry Allen, chief financial officer. Sales and marketing expenses rose to 27.5% of revenue, up from 26.1% a year ago. Sales to Internet users accounted for about 40% of the company's revenue, Allen said. -By Rick Jurgens; Dow Jones Newswires; 650-496-1367; richard.jurgens@dowjones.com

To: Sam Salomon who wrote (3354)	5/19/2000 10:11:00 AM
From: DownSouth	Read Replies (1) \| Respond to of 10934

Yes, the NAS market has been in a tornado since about 1996-7. NTAP has been growing in excess of 80% annually since that time. The tornado is still relatively narrow, but is growing rapidly. NAS tornadoed quickly because NAS met the needs of ISPs who were desperate for a way to grow their storage requirements with low total cost of ownership and easy incremental storage capacity adds. NTAP recognized this in 1995 and went after them aggressively. They had already knocked down bowling pins in the software and hardware engineering marketplaces where storage, speed, and unique backup requirements were needed to support specialized engineering software running on UNIX. Re: Gorillaness. I am in the minority who consider NTAP to be the Gorilla of NAS. Looking at NTAP's patents (WAFL, ONTAP, SNAPSHOT = barriers to entry), the price/performance gained by those patented techniques, their increasing dominance of NAS market (+60%)nd their sustained growth rate, imo, NTAP is the NAS Gorilla.