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

To: Neil S who wrote (18925)	10/29/1998 10:08:00 AM
From: w2j2	Read Replies (1) \| Respond to of 29386

Neil, the 3-com news is very important. Cisco and Bay(Nortel) will be next. wj

To: Neil S who wrote (18925)	10/29/1998 11:55:00 PM
From: Kerry Lee	Read Replies (2) \| Respond to of 29386

Neil, thanks for the 3 Com News: <<Key products will include Fibre Channel-based network interface cards, hubs and switches as well as storage management products based on 3Com's Transcend network management software, according to 3Com officials in Santa Clara, Calif.>> << Industry leaders said the next few years should be ripe with mergers and acquisitions as large companies such as 3Com make inroads on the storage market. "There will be a few surviving independents that are able to compete," said Peter Gibbs, director of marketing at Clariion, in Westboro, Mass. "For the next year or so, we're going to see various consolidations until the dust settles.">> FWIW, here are my thoughts: 1. Once COMS enters the Fibre Channel fray, there is no doubt that CSCO, NORTEL and CS will be in the FC mix as well. Perhaps others such as Lucent or Alcatel will also be interested in the FC/SAN market? 2. Once FC takes off ( and it will ), don't be surprised to see rapid consolidation, like we are seeing in the Gigabit Ethernet space, eg Cisco bought Granite Systems for $220 million ( stock ) and Spokane-based start-up Packet Engines just got bought by Alcatel for $300+ million ( cash transaction )..To the best of my knowledge, Granite never had any products or sales..don't know if Packet Engines had any significant revenues..From what I've heard, the Granite deal has been a huge bust for Cisco so far in terms of what they got for their $220 million. Therefore, I see 2 possible scenerios for Fibre Channel switch company "A" or "B". If I were one of the "Big 4" networkers, I could take a risk and a) buy one of these "unproven/start-up" FC companies for $100-200 million today OR b) wait another 6-12 months to see who emerges with the best technology and who wins what OEM's and pay $200-300 million. It seems to me that scenerio "b" is the higher cost/less risky strategy for a big networking company...Time will tell.