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To: tinkershaw who wrote (5097)	11/17/2000 10:02:00 AM
From: DownSouth	Respond to of 10934

tink, thanks for the excellent analysis. I really appreciate it. BTW, NTAP's to-be-announced low end filer could be revolutionary in its price/performance and market niche. Imagine a $16,000 filer (w/60% margin) sitting at the edge of a "content management network" with DAFS/VI and clustering capability, sucking content from big filers at the core of the network. The idea is that NTAP's new content network software will schedule and measure the distribution of content from the core to the edge, pick efficient routes, and report performance. NTAP is treating content the way CSCO treats packets. This is a paradigm shift, made possible by the price/performance of NTAP's disruptive innovation(s) and the realization of NTAP's vision of end-to-end content management. I am making some not-so-wild assumptions here about NTAP's low end future product. But I have known for some time that porting the ONTAP OS to a pure PC platform is literally a no-brainer. Add the NVRAM to the unit, wait for the DAFS/VI capable network interface cards (NIC) and software and you have a high margin, but low price point, easily installed filer. ONTAP gives it raw performance unencumbered by a general purpose OS and brings WAFL along with it. I wonder if Dell might be interested in being a part of this paradigm?

To: tinkershaw who wrote (5097)	11/17/2000 10:20:05 AM
From: broken_cookie	Read Replies (1) \| Respond to of 10934

Tinkershaw, Choosing a discount rate is always difficult. One thing about NTAP that is unusual for such a "high flying stock" is its beta of .8. A beta usually more commensurate with more of a blue chip stock. I got the beta off of my MSN portfolio. Perhaps this beta is in error, but if not, the low beta is the only unusual factor in deriving the 16% WACC. Because in all actuality, when I did the calculation, the WACC I came up with was 13.6%; I considered this to be too low. So I used my judgment and moved it up to 16%. No way is NTAP's beta equal to .8. That would mean that NTAP is 20% less volatile than the overall market.