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

To: Gus who wrote (10558)	6/28/2000 8:58:00 AM
From: John Carragher	Read Replies (1) \| Respond to of 17183

The Wall Street Journal Interactive Edition -- June 28, 2000 Tech Center StorageNetworks Unveils Dispute With EMC, on Eve of Its IPO By MARK MAREMONT Staff Reporter of THE WALL STREET JOURNAL StorageNetworks Inc., which is planning to go public later this week, disclosed that it is in a dispute with EMC Corp., its largest supplier and a leading customer. In a regulatory filing Monday, StorageNetworks said it received a letter from EMC on June 21, in which the giant computer storage company accused it, among other things, of misappropriating EMC's confidential information, violating an agreement not to hire EMC employees, and misrepresenting that EMC is an investor in StorageNetworks. Dean J. Breda, StorageNetworks' general counsel, said the allegations were without merit. He said the receipt of the letter just days before the company's planned IPO was "certainly interesting, considering where we are" in the IPO process, and added that StorageNetworks has "no plans to change" its IPO schedule. Mark Fredrickson, a spokesman for EMC, Hopkinton, Mass., said the timing of the letter was "coincidental," and there was "no intent on our part to interfere with their IPO." But Mr. Fredrickson said StorageNetworks has "crossed the line" in a number of its business practices. EMC is the leader in providing data storage systems to companies. StorageNetworks, Waltham, Mass., is a pioneer in providing computer storage on a rental basis, mostly for corporate customers. Since its founding in 1998, StorageNetworks has been closely linked to EMC. The company's chief executive, Peter W. Bell, is a former EMC sales executive, and two StorageNetworks directors are former EMC executives, including Roger M. Marino, a co-founder of EMC. In its regulatory filings, StorageNetworks said EMC supplied about 90% of its disk storage hardware and software last year, and it bought another $32 million of gear from EMC in this year's first quarter. In addition, the company said it received about 40% of its revenue last year as a subcontractor to EMC. But more recently, StorageNetworks has been buying more of its equipment from other vendors, Mr. Breda said, including Sun Microsystems Inc. and Compaq Computer Corp. Both companies, the general counsel said, also are investors in StorageNetworks. Write to Mark Maremont at mark.maremont@wsj.com