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To: Jim Oravetz who wrote (2146)	1/5/2001 7:49:50 AM
From: Jim Oravetz	Read Replies (1) \| Respond to of 2283

Analysts Say Storage Industry Remains Strong By Kim Renay Anderson, TechWeb News Jan 3, 2001 (4:40 PM) URL: techweb.com A day after EMC and two storage competitors were downgraded by a Wall Street investment house, industry analysts wondered whether the storage industry was the latest to be tripped up in an economic downturn. On Tuesday, Robertson Stephens downgraded about a dozen tech companies, including EMC (stock: EMC), Veritas Software Corp. (stock: VTS), and Network Appliance Corp. (stock: NTAP), leaving many industry watchers shaking their heads in disbelief. Because of the explosion in data, the storage industry had seemed comparatively safe from the forces of an economic downturn. Analysts and company officials insisted Wednesday that the industry is strong and that companies making cutbacks will first turn to discretionary areas, rather than essential services like storage. "I see very robust spending on storage and an increase for its demand," said Carl Greiner, analyst at Meta Group, Stamford, Conn. "Storage stocks may be overrated, but then again others technology stocks are as well." Fred Broussard, analyst at IDC in Framingham, Mass., said the trend is toward increased storage capacity for companies handling an escalating amount of data. He said storage vendors will do well this year, but not phenomenally well. William Hurley, an analyst at the Yankee Group in Boston, was also bullish on the industry's prospects. "I don't see a slowdown in storage from last year; it's going to be a hot area in 2001," said Hurley. A recent study by the Yankee Group projected that corporate spending on storage hardware, software, and related services will total $12 billion this year. Mark Fredrickson, an EMC spokesman, said the company doesn't agree with the dismal picture painted in the Robertson Stephens report. EMC, he said, hasn't changed its $12-billion growth projection for 2001. "We talk to our large customers about their spending," he said. "And we haven't seen anything that would change EMC's outlook or outlook on the whole sector." If the economy slows down, network-attached storage will be most affected because it is deployed on a front-access device, is inexpensive, and is more discretionary, said Fredrickson. Storage area networks and enterprise storage will not be greatly impacted by a slowing economy because they are deployed on a large scale.