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Technology Stocks : The New QLogic (ANCR) -- Ignore unavailable to you. Want to Upgrade?

To: craig crawford who wrote (13395)	12/31/1997 7:10:00 PM
From: Craig Stevenson	Respond to of 29386

Craig C., The bottom line is that in 1997, there WASN'T enough Fibre Channel switch business for both Brocade and Ancor. I didn't think it would be that way, but those are the facts. Now, my concern is that during the NEGOTIATION phase, we don't jeopardize Ancor's chances. Once a deal is signed, sealed, and delivered, I think Ancor should publicize it as much as possible. I think that is one of the tragedies of the Hucom contract. Admittedly, it is a big, desirable contract, but it would have done Ancor's stock price a lot more good to know exactly who Hucom was working with over in Japan, and what the future implications of that relationship might be. (Bring back Steve O.? <g>) I think when you see the size of the upcoming OEM deals, whoever gets them, you will understand that they aren't fighting over dinner scraps. For a company the size of Ancor, these OEM contracts represent a HUGE jump in revenue. Wouldn't all of us ANCR longs like to have added Sequent revenue during 1997? Would we have closed the year at $4 and change? Highly unlikely. Another factor to consider is that in some cases, there is fierce competition between Ancor's CUSTOMERS. That can create some complications that we don't see from the outside. There is also competition from other Fibre Channel companies, such as Gadzoox, Jaycor, and now G2. The hub makers are serving the lower end of the FC market, but they will undoubtedly try to convince customers that switches aren't needed, at least initially. Ancor's switch-only strategy (which I think is a mistake, by the way) means that they must convince customers that they need a switch to provide increased performance and room for future expansion. Don't get me wrong. In a lot of ways I agree with you. This time around, I just want to err on the conservative side. I've been waiting for ANCR to start pulling its own weight for a long time now. I'm not trying to make excuses for them, but I do think we are on the verge of seeing the results of some pretty significant management changes. Craig