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Technology Stocks : EMC How high can it go? -- Ignore unavailable to you. Want to Upgrade?

To: Tony Viola who wrote (11938)	1/23/2001 2:12:55 PM
From: hamsandwich	Read Replies (1) \| Respond to of 17183

more LGTO acquisition rumors, courtesy of briefing.com: Legato Systems (LGTO) 16 5/8 +2 3/8: We are hearing today that Legato is being talked about as a potential acquisition target now that the enterprise storage management software company has cleaned up its accounting problems. Possible suitors being cited today are EMC (EMC) and IBM (IBM). Legato focuses on data protection products and data availability products and competes with both EMC and IBM on the Sun Solaris/SunOS platform. It's not surprising to hear EMC as a potential acquiror as the company has been aggressive on the acquisition front, particularly for software companies. EMC understands that the software side of data storage is a critical component and has recently stated that its goal is to boost software sales to 20% of their product mix. Software is important as it is one of the key features that separates a million-dollar EMC storage system from a few dozen $500 hard disks. Also, EMC uses software to fend off increasing competition from IBM, Sun and others. Obviously, EMC is a critical customer for Legato and is part of Legato's source code OEM program whereby Legato licenses its software products in source code form in which they receive license revenue. The OEM partner is then responsible for porting its software to its unique operating system environment. In other words, EMC is intimately familiar with Legato's products so a deal makes sense. However, EMC's CEO was just on CNBC saying "don't expect anything in the next week or so on the acquisition front." As for IBM, we view them as less likely of a suitor as IBM has a strong relationship with Veritas and they typically prefer to form relationships rather than acquire. Also keep in mind that rumors come and go about Legato as Broadvision (BVSN) and Veritas (VRTS) have also been mentioned in the past as potential suitors, but it's worth keeping an eye on. -- Robert J. Reid, Briefing.com