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To: DlphcOracl who wrote (100455)	6/3/2000 12:21:00 PM
From: Lane Hall-Witt	Respond to of 120523

DlphcOracl -- FFIV: I like this company a great deal, but think it's suffering from a perception that its solutions won't be able to keep up with the new generation of Web switches from ARPT/CSCO, FDRY, ATON, etc. FFIV is seen strictly as a software company -- its solution is loaded onto standard Unix-based PCs and inserted as an additional component into the network architecture -- rather than as a hardware/software company like the switch makers. I think there's concern that FFIV, over the long run, will prove to be a technology laggard in much the way IOM is. The upside to FFIV's current approach includes: (1) Software solutions are easier and more cost-effective to upgrade than hardware-software solutions; (2) FFIV solutions can be added in to existing network architectures as plug-and-play components, as opposed to swapping out switches entirely (more expensive and time consuming); (3) FFIV has an up-and-running end-to-end solution for load-balancing and content management, unlike its prime competitors, who have certain elements but lack the full spectrum of products. The downside is that FFIV's "Web appliance" approach (as its software-on-a-PC is called) is not as scalable as the switch solutions. This is the reason FFIV is seen as a technology laggard whose potential long-term viability is questioned. My personal opinion is that FFIV has a good shot at making the leap to next-generation technologies. FFIV itself is hiring personnel for a hardware/software development unit, and the deal it signed with COMS -- where COMS stated its intention to build FFIV's solution into the chassis of its switches -- offers "proof of concept" that FFIV's software can be leveraged into a hardware/software solution. If you're interested in FFIV, it would also be worth taking a look at ATON. Its switches have been well reviewed, and I'd view it as a bona fide takeout candidate on the heels of the ARPT/CSCO deal. ATON is not expected to be profitable until next year, but its performance has exceeded analyst expectations and its continued growth and path toward profitability seem quite visible.