Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

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

To: streetclam who wrote (20750)	2/11/1999 9:58:00 PM
From: Fang Li	Read Replies (3) \| Respond to of 29386

Keep your faith and hope alive! We still have hope to win this one from the recent alliance. Storage! Storage! Storage! David Kirkpatrick A company called EMC has tapped into one of the central truths of the computer age: Every time you hit send, buy a stock online, or click on an ad, you generate data that have to be put somewhere for safekeeping. Finding that space--creating that space--is crucial to the infotech revolution. In fact, demand for corporate data storage, according to International Data Corp., has been growing at more than 80% annually for the past four years and will double annually for several years to come. Even allowing for the fact that the price per bit of information stored is dropping at a rate of 35% per year, according to Dataquest analyst Tom Lahive, that makes for a fabulous business. And EMC, a $4-billion-a-year company in Hopkinton, Mass., rules it. No wonder EMC has emerged as the second-best-performing stock in the S&P 500 this decade --after Dell. The company was already a major presence in the data-storage industry in 1994, when CEO Mike Ruettgers decided to pour more than a billion dollars into developing software that would make its storage units compatible with many types of servers. Now EMC's units--which are actually integrated hardware and software systems--can be accessed simultaneously by mainframes, servers running various versions of the Unix operating system, and servers running Microsoft's Windows NT. They are the most flexible, powerful, and best-marketed storage systems in the industry. Of the world's 14 large server makers, eight--including Hewlett-Packard--simply resell EMC units with their computers. Ruettgers says he intends to plow another $1 billion-plus into software development in the next three years, but EMC's edge is already formidable. According to Dataquest's Lahive, "EMC's software, sales, and service are beyond anybody else's. There's not much real competition." Influential Merrill Lynch securities analyst Steven Milunovich calls EMC his top stock pick for 1999--and that's after it climbed 210% in 1998. "EMC is the next great technology franchise, a company like Microsoft or Intel," he says. He and other analysts project that revenues and profits should each grow more than 30% in 1999. Though EMC's muscle and versatility have made it a clear No. 1, another beneficiary of the demand for storage is Compaq, a distant No. 2, which sells technology it acquired along with Digital Equipment last year. IBM--once EMC's archrival--also remains a powerful player, but mainly as a supplier of the disk drives that EMC and others build into storage systems. Seagate is the other major supplier of disk drives; Veritas and Legato produce storage software; Storage Technology builds tape libraries that allow companies to back up stored data. The tiny Network Appliance offers storage devices that users on a network can access directly, without going through a server at all. (The company's market capitalization is an astounding $3.3 billion, despite having revenues in the past four quarters of only $217 million.) Storage has been the invisible giant of IT, but it's getting too big to ignore any longer. Says CEO Ruettgers: "The market we can address will have grown from about $10 billion in 1997 to $35 billion in 2001." If you don't know what to do with a trend like that, you're reading the wrong magazine.