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Technology Stocks : EMC How high can it go? -- Ignore unavailable to you. Want to Upgrade?

To: Michael W. Brom who wrote (6304)	5/6/1999 10:44:00 AM
From: bob gauthier	Read Replies (2) \| Respond to of 17183

EMC Futures I have been invested in EMC long for several years now, and continue since I think the future looks bright. The HP/Hitachi announcement was tremendously overblown. Lots of EMC storage sold for connection to HP systems was sold directly by EMC. These sales and the customer loyalty by HP customers to EMC will not change (IMO). When looking at the future of EMC three words come to mind; SOFTWARE, SOFTWARE, SOFTWARE. The days of making significant money from storage hardware are over. EMC created the large storage subsystem by making a simple plug and play box. While EMC competitors were selling storage controllers, attached to storage head of string, attached to storage devices EMC was selling a single stand-alone box. While EMC competitors were arguing the merits of 64 megabyte cache sizes EMC was selling 2-gigabyte cache subsystems. Cache tuning became obsolete, disk tuning became obsolete, and with EMC storage subsystems you plugged them in and forgot about them. EMC built a significant lead over the competition, a lead that they exploited by supporting attachment by all platforms to all subsystems over all connections (MVS, AS/400, UNIX, NT, SCSI, Escon, Fiber.....). The one stop solution for all your storage needs with built in asset protection; buy a SCSI attached UNIX storage subsystem today and use it as Escon attached MVS storage tomorrow (or visa versa). The competition has caught up. Similar products are now becoming available from other vendors and the EMC customers who have paid a premium for EMC subsystems over the years are salivating at the opportunity to cut storage costs. The back end storage systems are becoming a commodity item commanding only commodity prices. Lower margins are on the way for EMC hardware sales. The next battlefield is for the control of the storage interconnects. Connection of 100 gigabytes of storage to 3 systems is a trivial matter; connection of 100 terabytes of storage to 300 systems is a nightmare. Storage interconnect solutions are the answer to the next burst in storage system growth. Eventually my IBM MVS system, Sun Unix system, Windows NT systems, Stratus..... will be able to use space on any storage subsystem, anytime, without the need to recable, reconfigure, or reboot. This is the nirvana of storage subsystem management and the cherry that every vendor touting a SAN solution is preaching. Note that this is a SOFTWARE solution (OK there is some hardware, cables, hubs, directors) with a high profit margin potential. The vendor with a complete answer for ALL my computing platforms and ALL my storage subsystems will win this race. I believe that EMC is well positioned to win. EMC has been working for several years to develop the storage subsystem interconnect technology - EMC Enterprise Storage Networks. EMC alone has years of production experience in handling the nuances of the multitudinous compute platforms. EMC alone has years of production experience in the simultaneous management of different connection methods. EMC has the solution, the marketing expertise to move it into the market place, and the managerial dexterity to succeed in the interconnect competition. Short term fluctuations in EMC share price might be up, might be down. On May 6th 1997 EMC shares closed at 19.25, on May 6th 1998 43.56, today, something over 90. Not a bad track record. I believe the future for EMC looks great. All these comments reflect my opinions only. As always due diligence is recommended. Bob Gauthier