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Technology Stocks : Extreme Networks, Inc. (EXTR) -- Ignore unavailable to you. Want to Upgrade?

To: RR who wrote (242)	9/2/2000 1:41:11 PM
From: Jill	Respond to of 770

That's what I'm thinking too. From SmartMoney: EXTREME NETWORKS (EXTR) EXTREME NETWORKS IS what you worry about at night if you're Cisco (CSCO). Sure, Cisco sells over 80% of all corporate networking gear, but last year newcomer Extreme accounted for 24% of the unit sales in one segment of the switch market, blowing past Cisco's 8% share, according to researchers at the Dell'Oro Group. The switches are known as Layer 3 switches, and they can make the latest generation of networks move data at vastly faster speeds. (For those of you keeping score, we're talking at least a billion bits per second.) To grab sales, Extreme has undercut its rivals' prices — by a lot. But it isn't simply holding a lowball clearance sale. Margins are steadily increasing. In the Santa Clara, Calif., company's first full fiscal year — which ended in June — it was expected to report profits of over 30 cents a share. Not bad for a 1999 IPO. The billion-bits-per-second networking market — otherwise known as Gigabit Ethernet — is key to Extreme's business plan. The ultimate goal is to become a big player in metro area networks, an emerging battleground in telecom technology. Today corporations connect different office sites over wide areas using Sonet, an aging telephone-company technology. Extreme is betting that it can sell the same Gigabit Ethernet technology it provides for its corporate clients' local area networks as a replacement for Sonet. Bob Larribeau, director of edge switching and routing with the research firm RHK in San Francisco, says it's a compelling story, and one where Extreme has an early lead: "Replacing a Sonet line with a Gigabit Ethernet could be far cheaper, and the equipment is easier for a corporate [information technology] manager to understand, since it looks like what they're already buying for their office networks." Extreme has started to cut deals with metro service providers, such as San Francisco's Yipes. And in January, Extreme hired Sam Halabi, a high-ranking Cisco technologist and noted expert on a piece of software called BGP4. The software will let Extreme's switches much more easily handle data exchanged between different kinds of networks within the metro area. That's the crucial step in moving Ethernet technology beyond a single office building. Analysts say metro-area sales could be a significant revenue source as soon as next year. Cutting-edge networking companies aren't cheap — even after the tech correction. Extreme is trading at 150 times next year's earnings, slightly more than Foundry Networks (FDRY), another switch company stealing Cisco market share. The key difference: Analysts expect Extreme's profits to double in the fiscal year just under way, while Foundry and Cisco are expected to raise their 2001 earnings only by a third. smartmoney.com