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To: GST who wrote (145164)	8/10/2002 3:11:17 PM
From: Bill Harmond	Read Replies (2) \| Respond to of 164684

Not really. The ASIC issue with IBM is baked in now apparently, and gross margins increased. It's just the HPQ issue, though there some moving parts about EMC and McData being channel partners now instead of just customers. That could be good or bad instead of just good. The thing about Emulex and QLogic is that they are essentially component suppliers, and over time components tend to become commoditized. The same as happened to 3Com. When it comes down to it, HBA's are expensive plug-in networking cards, and as IBM has shown, that funcionality can be built onto the system boards by buying just the ASIC's. The company did address this concern on the call by saying that they see all the product roadmaps and IBM is the only case for the next couple years. I think Brocade will tell the tale on the health of storage area networking this week. It's the biggest player. The Cisco of the category. It's the system level play. Much better than Emulex or QLogic, IMO. Hear what they have to say Wednesday night.