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Technology Stocks : Computer Network Technology (CMNT) -- Ignore unavailable to you. Want to Upgrade?

To: Carl R. who wrote (718)	9/26/2000 2:39:47 PM
From: Gus	Respond to of 750

Not yet, but the market opportunity is extremely large for a vendor like CMNT with relatively unique first generation and second generation storage networking technology and experience. Here's an excerpt from the Inrange prospectus: MARKET OPPORTUNITY Over the last decade, the volume of information that is transmitted, captured, processed and stored over storage, data and telecommunications networks has increased as a result of a number of factors, including: - the emergence of the Internet and the growth of e-commerce; - the increased use of data-intensive applications such as enterprise resource planning, data warehousing and data mining; - the decreasing cost of on-line data storage; - the growth of wireless communication; and - the availability of lower cost, higher bandwidth communications. As enterprises have become more dependent on storage, data and telecommunications networks, the demands on the networks have intensified, with enterprises requiring constantly available communication, immediate access to information and fast, complex data processing. Today, many enterprises operate their networks 24 hours a day, 7 days a week, with limited time for maintenance and upgrades. Given the cost to a business from the disruption caused by the failure of a network that is critical to a business' operations, enterprises are committing substantial financial resources and personnel to reduce network failures. The cost and complexity associated with maintaining networks are significantly increased as networks become larger and by the fact that most enterprises manage three separate networks: a storage network, a data network and a telecommunications network. Many enterprises are seeking ways to reduce the costs of, and improve the efficiency and manageability of, their networks. We believe that the trend towards increasing the efficiency and manageability of these networks will eventually result in their convergence into a single network. Storage Networks According to International Data Corporation, the amount of information that enterprises are capturing and storing has approximately doubled annually over the past several years and is projected to increase at a compound annual growth rate of 82% through 2003. As a result, enterprises are faced with unprecedented challenges for managing this information and transmitting it at increasingly fast speeds. Storage networks have developed to help meet these needs by more easily and efficiently permitting several computers to share access to information storage devices. Storage networks may be separated into two categories: - networks within a single location or small area, which are referred to as storage area networks; and - networks that extend across multiple locations or a wider area that combine multiple storage area networks, which are referred to as virtual storage networks. The emerging industry standard protocol for storage networks is called Fibre Channel. Fibre Channel is a standard for transmitting large amounts of information at speeds in excess of one billion bits, or one gigabit, per second. Fibre Channel was developed in 1988 and since then has been increasingly endorsed by the storage industry because it can connect to different platforms and operates with greater functionality and speed than many other protocols. Many enterprises have not yet converted their storage networks to Fibre Channel protocol because the large amounts of the information they store on storage systems connected to mainframe computers are not currently compatible with Fibre Channel. In fact, according to a report issued in November 1999 by International Data Corporation, approximately 70% of the information stored by enterprises resides on mainframe systems. As a result of the benefits of the Fibre Channel protocol, we believe that the conversion of these storage networks to Fibre Channel will drive growth of high-end Fibre Channel switches, referred to as directors. As compared to other switches, directors are more scalable and are capable of simultaneously connecting a large number of ports without interfering with one another. Furthermore, directors are highly reliable, with no single point of failure. We believe that there is a need in the market for Fibre Channel directors that demonstrate the reliability, availability and scalability to manage storage applications that are critical to a business' operations and that have previously been performed within a mainframe environment. In a report issued in April 2000, International Data Corporation estimated that the Fibre Channel market for storage area network hubs and switches will increase from $236 million in 1999 to $2.8 billion by 2003, a compound annual growth rate of 85%. International Data Corporation also projected that the market for director-class switches will be the fastest growing segment of the Fibre Channel market, increasing from $52 million in 1999 to $1.4 billion by 2003, representing a compound annual growth rate of 129%. Furthermore, information from an International Data Corporation report indicates that director-class switches will maintain a 300% -- 500% price premium over the next lower segment of Fibre Channel switches for the foreseeable future. We believe that this price premium is a result of the enhanced scalability, functionality and reliability of director-class switches. As the amount of information that is being stored and transmitted increases, it is becoming more important for enterprises to create virtual storage networks so that the stored information can be accessed by users spread over large distances. Channel extenders and optical networking platforms are components of virtual storage networks. Channel extenders increase the distances over which information in a storage network can travel. Optical networking platforms reduce the costs of sending information over long distances by combining up to 32 channels of information onto a single fiber. International Data Corporation estimates that the market for all mainframe and client server storage area network components will grow from approximately $3.4 billion in 1999 to approximately $13.8 billion by 2003, representing a compound annual growth rate of 42%.