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

To: Bretsky who wrote (51400)	3/3/1999 8:25:00 PM
From: rudedog	Read Replies (2) \| Respond to of 97611

That is a fascinating article, thanks. For the record, I like EMC as a company, I like the people. I knew the early players personally when they were very small - that was a looong time ago. They are an 800 lb. gorilla compared to NTAP. I think EMC will continue to be a good investment for some time, and frankly was a lot better than CPQ over the last few years. But the author of this article ignores a number of key points and is just not being honest, or is misinformed. As the two leaders fought to protect their established market, EMC ate their lunch, and today EMC is the top maker of computer memory hardware and software for mainframes This is just not true - Come on, has this guy looked at IBM's last earnings statement? I assume he is talking about storage and not say CPU memory or OS software. Also he evidently does not know how to roll up the storage numbers (which is not easy at IBM but can be done). But a detailed analysis is not needed. EMC did less than $4B TOTAL revenue in 1998. Even if every nickle of that was IBM mainframe storage sales, they still would not be the 'top maker'. And we know that most of it was not even mainframe revenue, let alone IBM. Just not credible, Facing impossibly higher costs, the competitors either go out of business (Digital Equipment) Digital did not 'go out of business', they were bought by Compaq, along with their successful storage business, which was not Dinosaur technology but was advanced multivendor RAID which was both more advanced and less expensive than EMC's. Their cost model used to be about 40% of EMC's, I don't know what it is now but it is probably less since CPQ has the best volume purchasing in the business. CPQ's storage business is more than twice EMC's gross revenues. EMC had an unproven technology called RAID (Redundant Array of Independent Disks) that used a collection of smaller disks Compaq was pushing RAID two years before EMC's first offering (The SystemPro used RAID-based storage). So it was pretty well proven by the time EMC picked it up. When an author puts out facts which are just hopelessly wrong, it makes me question the rest of his information too. I think EMC has some risks coming up, but, like DELL, mostly because of the high expectations that are set for them. But there are similar risks for every tech stock I hold, and in fact few have performed as well as EMC. Good luck with it.