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Technology Stocks : Read-Rite -- Ignore unavailable to you. Want to Upgrade?

To: NasdaqStud who wrote (4372)	12/8/1998 1:14:00 AM
From: CPAMarty	Read Replies (1) \| Respond to of 5058

Still attempting to obtain info on RDRT's GMR vis a vee IBM and the Japanese. Have not had time for due diligence on NSO - wouldn't make sense to wait and see if NSO can break out of resistance here? Also does anyone have Bloomberg or some other service to determine if insiders are selling like they did in September and October. biz.yahoo.com

To: NasdaqStud who wrote (4372)	12/8/1998 2:04:00 AM
From: Gus	Read Replies (1) \| Respond to of 5058

Thanks for the info, Stud. Regarding NSO, I've seen some of their entry level RAID products sold at Compusa. $900-1,000 price range. I took a cursory look at their product line and they seem to have a line of RAID and tape drive arrays targeted at small to medium sized businesses, the fastest growing segment of the storage market. Seagate seems to be their primary disk drive and tape drive supplier. If I understand their strategy correctly, they aim to be a provider of end-to-end storage solutions ranging from RAIDs to tape backup libraries. This is a crowded field with about 150+ players, though. Ripe for consolidation, some would say. And a RAID vendor, especially one that is competing in the commodity small to medium sized segments, is very vulnerable to new technologies from left field. For example, one of the founders of CMNT left to join a startup, Xiotech, which has a RAID box that is supposedly faster than anything else currently on the market!!! RAID, or Random Array of Inexpensive Disks, is a technology that aims to provide bulletproof storage by basically duplicating the data itself and all the electromechanical components of the storage subsystem ranging from disk drives to storage controllers to cooling fans to power supplies. The idea is that the each piece of data is stored in such a way that if a disk drive fails, the data stored on that particular disk drive can easily be replicated by the storage controller which knows where the mirror copy is stored in the array of disk drives. In the higher-end configurations, the redundancy is basically increased throughout the design and there are also more sophisticated ways to duplicate the data and arrange it among the disk drives. EMC, IBM and the higher-end players, have RAID cabinets that contain up to 200 disk drives providing terabyte class storage! George Dawson posted a link to a more detailed explanation of RAID technology at the EMC board. These RAID boxes use the same disk drives from the supply chain. The real value add lies in the system design that includes the storage controller technology, the firmware and pipes that move the data around inside the box and out to the host server. raid-advisory.com That "multi-billion dollar computer server manufacturer" referenced in that 12/1 press release could be one of the top 4 players in servers who altogether control about 70% of the global server market per the latest surveys -- IBM, CPQ, HWP and DELL. Dell seems to be the most likely customer given the way it is furiously cobbling together the end-to-end solution required to be a player in enterprise storage . If I am guessing correctly, DELL is using DGN as the OEM for the high-end RAID boxes and is planning to use NSO, as possibly one of two or three OEMs, to provide the RAIDs for the small to medium sized business market. The conventional wisdom is that Dell's progress as a storage supplier is going to track its ability to sell servers. A server vendor used to sell all the storage required by the server, but the immutable trend has been to separate the server sale from the storage sale in order to accomodate the annual increases in storage requirements without rendering obsolete the investment in computing resources which can proceed on a more practical pace. For example, with the network being the bottleneck, more and more companies are slowing down their processor upgrade cycles and investing more in bandwidth boosting technology. Nowadays, a server vendor only has a 50-60% chance of grabbing the storage (RAIDs, backup libraries) sale that goes hand in hand with every server sale. DEll is selling a lot of servers for the small to medium-sized market, but it is widely believed -- and this is acknowledged by Dell itself -- that DELL will have a harder time penetrating the high end, which is dominated by the likes of EMC and IBM whose storage systems architectures (Symmetrix and Seascape) are very popular. HWP is the largest reseller of EMC's Symmetrix products. Compaq has a fearsome two-pronged server strategy -- 64-bit Alpha which can run UNIX and NT, and 64-bit Merced which can also run UNIX and NT -- that could possibly be the fulcrum that will allow CPQ to use the high-end storage businesses it got from its Tandem and Digital acquisitions to make an end run at EMC and IBM. All that said, NSO is a small cap that is coming off a small revenue base and it can always reap outsized benefits from an outsized deal with a player like Dell. Longer term, though, you may want to consider other plays in enterprise storage. I increasingly believe the storage biz will be, to borrow an ad copy, a size thing.