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Technology Stocks : MRV Communications (MRVC) opinions? -- Ignore unavailable to you. Want to Upgrade?

To: Frank A. Coluccio who wrote (12805)	4/17/1999 10:13:00 PM
From: Sector Investor	Read Replies (1) \| Respond to of 42804

<<They have not only the architectural answers to the questions you've posed, but they can buy whatever they need to fill the gaps at the flip of a switch. >> But Frank, you've heard the saying "Money isn't everything"? Of course they can buy what they want. Their gluttonous P/E is over 134. But look at Granite, their GE pickup over 2 years ago. They paid a goodly price, but then had quite a bit of difficulty integrating Granite's technology into their own. I think it took them about 1 1/2 years to have product - hardly the flip of a switch. It's true that with their situation they can buy a company just for pieces of it's assets and afford to throw the rest away. But buying many different companies, with differing cultures and technology is not as fast and efficient as many people think. Say if they were to buy CIEN for their DWDM need, it might take a while to get that "fits like a glove" type of feel with the rest of their product line, and even then they might be buying "second best" technology, as they did with Stratacom instead of buying Cascade for their WAN F/R and ATM switching. ASND did merge with Cascade, then promptly took CSCO's edge in WAN F/R and ATM switches right away from them. Again with buying Stratacom, this is hardly "flipping a switch" to a winning strategy. What MRVC is building is an integrated Fiber Optic Components, ASIC design and Optical based Networking Company, with highly innovative engineers and, by going Open like with the Linux Router, they reduce their time to market for new components whereas CSCO has to stay with their proprietary IOS and modify it to do the things that Linux can do easily. They are leveraging Xyplex to acquire hundreds of man-years of STABLE networking code (and you need stability to port the code to ASICs - and you need the ASICs to get the blinding speed at competitive prices , that leads to a broad range of cutting edge next-generation products that will be attractive to carriers), an experienced sales force and significantly improved support. The Xyplex acquisition is written all over these new products in all the protocols they support, as MRVC didn't have much beyond IP and Ethernet in 1997. They got all this for $35 million - pocket cash for CSCO, but they have done more, and faster than CSCO could have done. And what they have appears to be parts of a cohesive strategy too.