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Technology Stocks : EMC How high can it go? -- Ignore unavailable to you. Want to Upgrade?

To: Gus who wrote (10509)	6/20/2000 9:59:00 PM
From: Mario	Read Replies (1) \| Respond to of 17183

Gus back to JDN's question in post 10504 (in a nut shell) how many Mcdata shares will an EMC investor get for each EMC share. Mario

To: Gus who wrote (10509)	6/21/2000 7:52:00 AM
From: Bob Frasca	Read Replies (2) \| Respond to of 17183

Ancor/Inrange demonstrated a 64-port FC-based director switch product ONLY last 5/30/2000. Mcdata has already been shipping its 32-port FC-based director switch product to the majors including EMC and IBM. I believe that accounts for a large part of Mcdata's $47 million revenue base during the last quarter. That's along with its ESCON/FICON product targeted at the large ESCON-based IBM-mainframe compatible market. I don't think Ancor/Inrange are shipping their 64-port director switch yet, are they? Inrange is shipping, Ancor begins shipping next month. The operative word in that press release was FIRST. Ancor is first to the market. Ancor Communications Inc. (Nasdaq: ANCR - news), will demonstrate its superior switch technology with the first live, public demonstration of a 64-port Fibre Channel director-class switch at SAN Conference 2000 in San Jose, Calif., this week. Ancor's SANbox(TM)-64 is part of the company's highly scalable line of SANbox switches and will be shown in Ancor's booth, 502. Other notable information from the press release: Ancor's demonstration connects the 64-port switch with 16 and eight-port SANbox switches in a Multistage(TM) multi-switch fabric. The demonstration also highlights Ancor's SANbox FLS (Full Loop Support) features. SANbox FLS bridges legacy private loop Fibre Channel devices with newer, public loop products, enabling legacy servers to access public storage, a configuration only Ancor products can facilitate. I'll grant you that McData had more experience selling director switches but most of this product was sold to the parent company, EMC, as part of the Connectrix product. Your 99% figure is a little misleading as there really hasn't been a market yet. As for Infiniband, it is a complementary technology and isn't a threat to Fibre Channel anyway. (There are some excellent white papers on the Ancor and Intel web sites on Infiniband and it's role in the fibre channel world.) I must reiterate, because you didn't acknowledge the point, that McData's director product is the previous generation. While it's true, according to the snippets from the prospectus that you posted, that they have a new product in the pipeline that is "under test", Ancor is already in the market place selling this product. I'm not an engineer and this is grossly simplified but the primary difference between Ancor and Brocade is that Ancor put everything on the ASIC while Brocade's product is more software oriented, i.e. their ASIC isn't nearly as sophisticated. It is said that Ancor's product performs better because everything is on the hardware while Brocade's is more flexible because of the software. To the best of my knowledge, Brocade has not yet announced a director product. My understanding is that they don't have the ASIC know-how to get it working. It's clear, from what you've posted that McData is following in the footsteps of Ancor and putting the brains on the ASIC. It has been discussed on the Ancor board for many months that the reason EMC liked Ancor's product was because of it's hardware bent. (As the CEO of Ancor said, when an evaluation is performed by the engineers, Ancor's product wins every time over the competitors.) Because of that, I'm not surprised to see that McData has also chosen this route. ...back to 1996 when both were involved in pioneering and validating the FC switch market... Just fyi, Ancor beat them both to market (1995) with a FC switch. Unfortunately for Ancor it was a class one switch that was focused on the LAN. (From what I understand, the class one experience is proving beneficial in developing an Infiniband switch.) By the time they regrouped to focus on class two and three in the SAN space they had fallen behind Brocade. My understanding is that McData has NEVER been a player in the switch market. (Who are their OEM partners besides EMC?) That's why they OEM'd Brocade's product for use in their director. Presumably, if they could build a switch EMC would have used it instead. The point is that the director switch market is NOT an easy one to enter, partly due to its support-oriented nature. If it were, a switch manufacturer like Brocade could have easily extended its dominance of the FC switch market to the director switch market. On this point, at least, we agree. The barriers to entry for the fibre channel switch market are formidable. Unfortunately, I think that you are confused. Ancor and Brocade are already in the market, McData is the one trying to get in. (99% of a market that barely existed and is now being lost to newer generation products doesn't really count.) As a matter of fact, if you check the various SEC filings I think you will find that neither Ancor nor Brocade even acknowledges McData as a competitor. Gadzoox (ZOOX) and Vixel (VIXL), who have a big head start on McData, have been trying to get in to the market as well and they aren't having much luck. The bottom line is that McData is TRYING to build a competitive product that hasn't been released yet and may never be released. After that, they face stiff competition from the firmly entrenched veterans in the switch market who are currently working on yet another generation. If they'd had a viable current generation product, EMC would have used it instead of Ancor and Brocade. After all, EMC is an OEM. The customer, in most cases, could care less whether the switch inside is Ancor, Brocade, or McData and may not be able to tell in the finished product anyway. In my opinion, McData is too far behind and that's why EMC is spinning them off.