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To: Terry Whitman who wrote (40102)	5/10/1999 4:58:00 PM
From: John Pitera	Read Replies (1) \| Respond to of 86076

Bloated tech stock??? which one was it? Metg is not too bloated at all all time high of over 40 down to 9 last week...the business is fundamentally sound here are a couple of their thoughts this week: A WIN IN STOR-AGE FOR HP USERS HP recently announced it will OEM Hitachi Ltd.'s 7700E (rebadged the MC256) for the enterprise storage market. While we view Hitachi Data Systems as a distant #2 (to EMC) in this market, its success has been primarily in S/390 accounts, and its value-added software remains questionable (particularly for Unix/NT systems). We believe the HP/Hitachi marriage will materialize a true storage subsystem contender in 12-18 months. Nonetheless, EMC's Unix/NT pricing will become more realistic (20%-25% reductions) and will begin matching mainframe pricing, as HP aggressively prices the MC256. Bottom Line: During the next year, HP will mature MC256 functionality to match that of EMC offerings, while EMC continues to own and extend the market. NEW IMAGE FOR PC PROCUREMENT As PC commoditization renders traditional differentiators less important (e.g., price, features, reliability) and organizations move to standardized PC image builds to reduce costs, product consistency becomes a critical buying criterion. Users must provide more detail on "hidden" components that impact images (e.g., chipsets, BIOS, graphics, network chips) when specifying products. Moreover, enterprises should require manufacturers to provide proactive notification of changes that will impact the image build, and then evaluate vendors' and channel partners' plans for consistency across product generations. Our research shows that Dell and IBM have the best track record on consistency; HP is showing improvement, but Compaq continues to trail. Bottom Line: IT departments must fundamentally shift PC buying criteria to emphasize product consistency to ease image standardization and reduce life-cycle costs.