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

To: Uncle Frank who wrote (14260)	5/23/2002 4:02:49 PM
From: Gus	Read Replies (1) \| Respond to of 17183

You're missing the simple point. The networked storage market is shifting to those who have both SAN (block) and NAS (file) products. Here's another data point that supports this common sense viewpoint. The sample size of this Gartner/GS survey is only 369 but it generally matches the results of other surveys I have seen and the market share numbers of Gartner and IDC. One can develop a good enough sense of proportion of these market shifts to determine which vendors are going to capture the bulk of the customers dollars when they start spending. Fact simple is that the vendors who are gaining market share in a depressed IT spending environment are following EMC's SAN and NAS strategy. Fair inference is that those vendors like NTAP and Quantum who do not have a coherent SAN and NAS strategy are going to continue to lose market share. For example, more than 70% of external storage systems are still sold by the server vendors. Dell has 30% of the corporate server market so it figures that its NAS momentum will continue. Dell is selling a lot of NAS (edge) that will eventually need to be integrated into a SAN (core). That benefits EMC particularly in the areas of software and services. Dell is easily capable of capturing 5% to 10% of the SAN market and 15%-20% of the NAS market in the next 18 to 24 months. Keep in mind that Dell sells the co-badged Clariions based on EMC's FLARE OS and its own NAS devices based on Microsoft's SAK, which is expected to capture more than 50% of all industry unit shipments in the next 12-24 months. Another example, IBM nearly doubled its SAN market share last year and that had the a positive impact on its previously moribund NAS products. Shark revenues, however, reportedly plunged 40% sequentially from the December quarter to the March quarter so its NAS efforts may suffer this year if IBM can not revive this part of the business. Table 1: Whom do you consider your primary SAN and NAS vendors? Primary SAN vendor Primary NAS vendor EMC 33.9% EMC 28.9% Compaq 26.8% Compaq 18.4% IBM 16.1% NTAP 18.4% HWP 7.1% Dell 10.5% HDS 5.4% IBM 10.5% Sun 5.4% Sun 7.9% Brocade 3.6% HWP 2.6% Dell 1.8% Quantum 2.6% byteandswitch.com