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

To: Chris Hilderbrand who wrote (14743)	2/27/1998 1:50:00 AM
From: George Dawson	Respond to of 29386

"Does anyone care to share their thoughts on why there are really only two competitors? Is it that the technology is just so difficult to invent/copy? Or are the major players going the Cisco route and sticking to GE (by the way, no one's commented on Cisco's GE solutions, either)?" Chris, My thoughts on this subject: 1. From a historical perspective, Ancor was an early inventor and innovator. Their had to supply their own switches, adapters, and software when nobody else was around. 2. They have expertise in FC as evidenced by their patent, their ASIC design, and their cutting edge switch. Some of their competition is having some difficulties (possibly rumored only) in the addition of FCAL, ease of configurabilty, and single stage design with a large number of ports. As Kerry pointed out, all of the large storage vendors have decided to OEM an existing FC switch rather than build their own. FC - as the HIPPI folks are quick to point out - is a complex technology. 3. FC could probably never compete with existing technology in the LAN, only in high end applications. 4. The FC market is set to explode, based on SAN applications and potential gains are based on this. 5. The storage market demanded a fully optimized class2/3, low latency switch. Ancor was slow to respond and Brocade was actually first to market this switch. As previously mentioned, Brocade would have captured most of the storage OEMs, if the MKII had not arrived on the scene. 6. FC is probably not going to be a direct competitor of GE or ATM (Cisco, et al) but those technologies certainly have their problems. If FC SANs start to sell, you can bet that the major networking suppliers will be into it to maintain market share. I think there is a good chance the telecos will also want FC SANs for their data mining operations and storage services (many are currently FDDI). George D.

To: Chris Hilderbrand who wrote (14743)	2/27/1998 9:06:00 AM
From: Craig Stevenson	Read Replies (1) \| Respond to of 29386

Chris, I think most of us have given serious consideration to what the Asian crisis could do to Ancor, given that their major current customer (Hucom) is from Japan. However, every indication from Ancor is that the crisis has not affected them, at least not yet. That isn't to say that this couldn't change, but so far, it hasn't been a problem. As far as comments about Cisco's Gigabit Ethernet offering, there was a flurry of discussion right after the Granite acquisition, but Cisco hasn't really had any products to talk about until recently. I do believe that Gigabit Ethernet will virtually stop the encroachment of competing technologies such as ATM and Fibre Channel on the LAN side of the network. However, Fibre Channel should have an advantage down the road as Storage Area Networks become more pervasive, and network managers see the advantage of extending this network all the way to the workstation. As I've said before, storage devices will have Fibre Channel ports, not Gigabit Ethernet ports. I am also waiting for a significant event to occur in the minds of the big networkers. The realization that Storage Area Networks are actually NETWORKS, with major growth potential. When/if this happens, it should be a HUGE plus for Fibre Channel. <<Still, if we assume that markets are relatively liquid, and there is an opportunity for great gain in this product segment, either Ancor's price should be 10 times what it is, there should be more competitors, or 99.99% of the investors are stupid.>> I think the answer might be "All of the above". <g> Craig

To: Chris Hilderbrand who wrote (14743)	2/27/1998 9:10:00 AM
From: Craig Stevenson	Respond to of 29386

Chris, <<Does anyone care to share their thoughts on why there are really only two competitors? Is it that the technology is just so difficult to invent/copy?>> There are actually three competitors, if you include Arcxel. (Recently bought by Vixel.) The reason Brocade's name appears so often is that they are Ancor's major competitor at this time. The barriers to entry for Fibre Channel switches are very high, and that explains why there are only two major competitors. The other reason is that to date, there hasn't been enough business to support more than that. Craig