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Technology Stocks : Son of SAN - Storage Networking Technologies -- Ignore unavailable to you. Want to Upgrade?

To: Joe Wagner who wrote (4368)	2/1/2002 1:14:45 PM
From: J Fieb	Read Replies (1) \| Respond to of 4808

Joe W., Another company talking hockey. I remember the last time...here are some tidbits from other threads... Regarding Merrill Lynch, actually I found the new coverage reports on the various companies to be rather objective and well-balanced in assessing pros and cons of all companies covered.The new team of Jim Berlino and Ananda Baruah are a welcome change from the previous Merrill ANALyst/BRCD cheerleader Tom Kraemer who was fired. It is interesting that although the intermediate term rating is Neutral, Merrill also rated QLGC as a "Long Term Strong BUY". The QLGC report is leaning towards BULLISH and the rating is strictly a valuation call, which somewhat contradicts their BUY rating on BRCD. Merrill's own DCF analysis implies a QLGC valuation in the mid-$60 range. Also note that Merrill also issued a separate summary report on all enterprise hardware companies where they state: "If Q Logic executes, it could become an application development platform for Infiniband and iSCSI, solidifying its market presence in the next generation data center. We expect the company to enter an agreement with a larger vendor soon that could impact our revenue estimates. We like the story and we are closely monitoring the situation."........................................................ So who will it be now? Also I find it interesting how the various firms are expanding the companies they cover, but seem to do it piecemeal, instead of the whole SAN sphere like Mr. Monague did long ago. ....Is anyone looking at INRG to buy it? We know that BRCD really really wanted MCDT before they got spun out, and we know that this sector is on all the growth radar screens now? Would anyone want to buy INRG? and I thought the firms didn't do their homework. Perhaps they do after all?.... Survey: OEMs Decide Switch Buys An enterprise user storage survey by Wall Street research firm Robert W. Baird & Co. Inc., to be released tomorrow, offers interesting insights into how companies make their purchasing decisions for SAN switches and storage. Storage Closet The firm interviewed CIOs, CTOs, and IT managers from 87 mid-sized to large corporations — and discovered that most users simply use whatever Fibre Channel switches are recommended by Compaq Computer Corp. (NYSE: CPQ - message board), EMC Corp. (NYSE: EMC - message board), or other storage systems vendors. What's more, many respondents had absolutely no idea which company's switch is in their storage area network. Baird analyst Dan Renouard, the author of the survey, was struck by the low profile of SAN switch vendors at the end-user level. "While we did encounter a few fanatic partisans of Brocade Communications Systems Inc. [Nasdaq: BRCD], for many users, a primary storage OEM (such as Compaq and EMC) had complete control of the switch-purchasing decision," he says. "Some users with a SAN had no idea who the switch vendor was at all." In other words, the importance of the original equipment manufacturers (OEMs) and value-added resellers (VARs) in this marketplace cannot be underestimated. "It's a lot more important than the SAN switch vendors would have you believe," says Renouard. "Whatever Compaq or EMC chose is what's going to get delivered." Interestingly, of the end users with a McData Corp. (Nasdaq: MCDTA - message board) switch, 60 percent made an active choice to purchase McData, as opposed to only 20 percent of Brocade users who actively chose Brocade, according to the report. Nevertheless, Brocade was the sole FC switch in 49 percent of respondents' SANs, while McData was the only switch in 27 percent; 11 percent used multiple switch vendors; and 13 percent said they didn't know which vendor's switch is in their SAN. [Ed. note: Couldn't they have strolled over to their data center and checked?] But if the switch vendors think they've got it bad, the host bus adapter (HBA) vendors are even worse off in terms of recognition at the customer end. "These companies have a virtually nonexistent profile with end-users," the report says. The survey also picked up some general trends in the sector, such as a strong interest in consolidating servers and storage at multiple remote locations to a few larger data centers. Baird concludes that this bodes well for Fibre Channel in core data center SANs, and for IP storage (via iSCSI) and network-attached storage (NAS) to connect remote locations to a central SAN (see Storage Networking Glossary). Cost was by far the number one reason respondents said they did not install a SAN: 62 percent said SANs are too expensive. However, many end users indicated renewed interest in implementing SANs, in light of aggressive OEM pricing, the report says. Overall, the budget outlook for 2002 among respondents was flat to slightly up, with energy, healthcare, and financial sectors the most positive. Industrial, technology, and consumer sectors were the most negative. The respondents were interviewed between October and December 2001. By industry, 29 percent of the companies interviewed were in industrial and manufacturing; 16 percent in technology and telecom; 16 percent in healthcare; 11 percent in utilities; 9 percent in financial; 9 percent in energy; and the remaining 10 percent in consumer or other sectors. The average revenue of participants was $3.2 billion (with a median of $900 million), and they managed an average storage capacity of 29 terabytes (with a median of 5 terabytes). — Jo Maitland, Senior Editor, Byte and Switch byteandswitch.com So when it comes to "branding" MCDT is more differentiated than BRCD?