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Strategies & Market Trends : Gorilla and King Portfolio Candidates -- Ignore unavailable to you. Want to Upgrade?

To: Bruce Brown who wrote (35238)	11/24/2000 12:40:06 PM
From: Smart_Asset	Respond to of 54805

Bruce, Enjoy your posts on many threads here on SI. There are two points regarding Mr. Moore's book that I would like to make. On page 103 of The Gorilla Game Mr. Moore states: "Every company in the category participates in this initial expansion in valuation. That is why we advocate that investors who have located a tornado opportunity buy the basket of companies participating in the new dynamics without regard to which one they feel is most likely to become the gorilla. At this stage there is little downside in owning the lesser companies in this basket, whereas there is huge opportunity lost in mistakenly excluding the one company that does become the gorilla." I assume that this same concept applies to a royalty game if indeed the SAN opportunity is a royalty game rather than gorilla. On page 120, Sectoring the Terrain the author posits four mega sectors: Computer systems, Vertical market systems, Semiconductors, and Services. It seems to me that the FC SAN market has some of the characteristics of both the Vertical market and the Semiconductor mega sectors. The vertical markets tend to "crown their own local gorillas". If the collection of SAN participants including Qlgc, Brcd, Emc, Veritas, Vixel, Zoox, Mtic, Crds, Fnsr, et al (too numerous to name all of them), are to crown their own gorilla (or king) then it seems interoperibility issues and quality of partnerships will show the way. Its no secret that Brcd has had runins with Emc and the Fibre Channel Alliance as well as their "turning down" the offer of Intel to develop Infiniband switches. Qlgc recently demoed their 2gig switches and hbas and stressed that they were compatible with Brocades products. My "opinion" based on my biased research (long qlgc) is that within the fibre channel community Qlgc is perceived as a promoter of the fibre channel industry and Brcd is perceived as a promoter of Brcd. Mr. Moore does not elaborate the magasector of semiconductors. Interestingly, Qlgc is listed as a semiconductor company and Brcd is usually seen as a SAN provider or a fibre channel company. Regardless, I would make the case that Qlgc is clearly the leader wrt asics. As mentioned, Qlgc recently demoes their 2gig solution( hba and switches). Brcd says they will have a 2 gig switch by 1st Q 2001. Qlgc now has a 16 port asic( I'm not a techie so open to corrections), a 64 port and 128 port full fabric solution with 256 ports on the way 3rd Q 2001. Brcd's entry is a less than competitive 64 port switch consisting of 4 16's tied together(Again if I am mistaken I am open to correction). It may well be that Brcd's road map indicates that 64port switches won't ship until 3rd q 2001 but those requests for proposals for enterprise solutions are being written now and it seems a gamble to provide "just in time" director class switches. I am certainly not an expert on Gorilla Gaming but I have read the book and use it as a reference while considering the concepts of the book valuable I don't think it the last word in investing. I am also lifting arbitrary sections of the book to make my points. Lastly, I sure wish I would have bought Brocade on the IPO. Good Luck Tam