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

To: Elroy who wrote (14382)	8/11/2002 4:38:39 PM
From: Gus	Read Replies (1) \| Respond to of 17183

Similar growth outlook? The server hardware biz contracted more deeply (26%) than the storage hardware biz (19%) in 2001. The storage biz is also expected to grow much faster than the server biz over the next 5 years with storage software and storage services continuing to grow much faster than storage hardware. Put another way, the server hardware biz is currently more than 2x the size of the storage hardware biz, but the storage hardware biz is expected to be approximately the same size as the server hardware biz in the next 5 years, implying much faster storage hardware annual growth. Sun's storage collapsed from $2.5B in 2000 to $1B in 2001 while losing market share in all segments (DAS, SAN, NAS, software and services). Sun's overall market share went from something like 12% in 2000 to less than 6% in 2001 and even those numbers, I argue, understate the magnitude of Sun's loss of credibility in storage. EMC's overall market share did go down from 30% in 2000 to 26% in 2001 primarily as a result of the high-end price war waged by IBM and Hitachi, and the contraction of the market; but, it still gained market share in the fastest growing segments (SAN, NAS, software and services) while establishing a new segment (CAS) for future growth. This should not be surprising. EMC supports 100% of all server platforms, 100% of all database platforms, 100% of all networks and 70% of all networked storage platforms. At best, Sun only supports 35% of all server platforms, 35% of all database platforms, 100% of all networks (on paper) and less than 30% of all networked storage platforms. As a result, EMC has a legitimate chance of grabbing 40%-50% of the networked storage hardware market, which everybody agrees is the future, and 30%-40% of the storage software market in the next 18-36 months. Sun, on the other hand, has a legitimate chance of grabbing 5%-10% of the networked storage market and 3%-5% of the storage software market in same time period. No. EMC and Sun do not have the same growth prospects in storage. Obviously.