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To: dwayanu who wrote (3743)	7/21/2000 9:57:29 AM
From: DownSouth	Respond to of 10934

Clearly, agree. Was referring to revenue and revenue growth rate, and maybe software revenue as a percent of revenue. Then we do clearly agree. I don't expect software revenue to ramp up much at all. DW was clearly very happy with their current percent of sales attributed to software. He was, for the first time, also very comfortable with their margins on disk drives, which heretofore were always problematic as the capacity of the filers increased. He was clear to say that NTAP is buying enough product from the drive manufacturers to get the kinds of discounts required to support acceptable gross margins. That was great news. Don't be disappointed if growth rate for Q1 is less than 100%. Q1 is always weak, and NTAP pushes its sales folks harder during Q1 than any other quarter to try to overcome this seasonal weakness. Also, expect the book/bill ration to be less than 1. NTAP sandbagged shipments, I believe, in Q4 after they hit 120% revenue growth for the quarter. So we have a backlog that was shipped early in Q1 and bookings growth in Q1 will no doubt be less than 120%. Growth of 90% for Q1 will be a good surprise for me. We will keep an eye on the gross margin numbers. Most important, though, will be new product announcements in Q2. That's where new growth and the fuel for continued discontinuous innovation will come from. The margins of EMC's market a clearly a target, and keeping EMC/SUNW/etc out of NTAP's marketplace for new customers is also a primary objective. New products are key to that. NTAP has to stay a moving target and a couple of years ahead in its technology.