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Technology Stocks : ODS - Optical Data Systems (NASDAQ: ODSI) -- Ignore unavailable to you. Want to Upgrade?

To: Jules B. Garfunkel who wrote (155)	3/5/1999 2:07:00 PM
From: Arrow Hd.	Read Replies (1) \| Respond to of 258

I also will hold for a number of reasons. As you saw with Alcatel taking over XYLN there is consolidation going on within the industry. I do not believe that SAIC has taken such a large equity position in ODSI simply for an alliance. Their past as posted by someone over on Yahoo is to take a position and move the partner along such that it furthers SAIC's business plus returns a nice investment profit. That is why SAIC agreed to the options on an additional 750K shares at 8 1/2 and another 750K shares at 10 1/2. How would SAIC increase shareholder value? First, this new extremely high speed switch for highly parallel processor architectures is critical to SGI. IBM writes their own switch function within the microcode and uses technology within the Nodes to interface with the microcode. SGI apparantly needs the ODSI switch to either facilitate Nodes or to facilitate machine to machine interoperability in a highly parallel operation. SGI bought out Cray in an effort to monopolize the super computer sector and I believe also took out Tandem to give them front end redundancy through the Tandem duel processor front end servers. So to SGI ODSI may look attractive to lock in this high speed switching technology. To those who think no one will touch a company in the process of turning around, acquiring companies are not as tentative as Wall Street analysts who wait until the share price has doubled before changing the rating or saying something positive. Intel certainly wasnt timid about grabbing Shiva even though Shiva had yet to turn the corner. Shiva had a niche in VPN and remote access and as we saw yesterday Alcatel grapped a second company, privately held Assured Access. Then the Intrusion software (security software) could be spun off as an Internet IPO or sold to an Internet company. ODSI's software division also now has the SAIC sercurity software business so that relieves SAIC of any overhang in that area plus generates additional cash. Along with all of these transactions SAIC cements partnership alliances for their services business expanding the core business model for them. Makes sense to me. Anyone care to comment? Of course, I have no idea if any of this would happen or if so, when it would happen but ODSI is going to increase shareholder value somehow this year because with SAIC holding the kind of leverage that they do ODSI frankly has no choice.