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Technology Stocks : The New QLogic (ANCR) -- Ignore unavailable to you. Want to Upgrade?

To: George Dawson who wrote (21727)	5/12/1999 9:39:00 PM
From: Patrick Sharkey	Read Replies (2) \| Respond to of 29386

George, thank you for taking the time to put together that clear report of the shareholder meeting. Do you recall any comments about Ancor's expectation as to the size of the fc market, the size of switch revenue to switch makers within that market, and the percentage of that switch revenue which Ancor expected to obtain (and the benchmark year used in any discussion of revenue and percentage of revenue)? Thanks, Pat P.S. In my experience with shareholder meetings, 70 attendees is a very large turnout.

To: George Dawson who wrote (21727)	5/13/1999 12:13:00 AM
From: KJ. Moy	Read Replies (1) \| Respond to of 29386

George, Thanks for taking the time to post the shareholders meeting minutes. Much appreciated. KJ

To: George Dawson who wrote (21727)	5/13/1999 12:27:00 AM
From: XOsDaWAY2GO	Respond to of 29386

Thanks, George and all, for reporting on the shareholder's meeting. Your efforts are appreciated.

To: George Dawson who wrote (21727)	5/13/1999 2:20:00 AM
From: Kerry Lee	Respond to of 29386

George, Ronald and Greg, thanks for taking the time to summarize your observations from the Annual Meeting. I noticed some discussion on Yahoo thread re: Tier 1's and the comment that Clariion was probably a Tier 2. Based on the fact that Brocade shipped $2.8 million to Data General/Clariion in the most recent 6 months, one could assume that Clariion should generate at least $5-10 million/year when the SAN market really takes off..Also SQNT is not exactly a Tier 1 company and they did $18 million for BRCD in 1998. Did anyone ask what Ancor's definition of a Tier 1 is, ie is it fair to assume that a Tier 1 is at least $30 million in annual revenues to the FC switch vendor?? Also, did anyone get a confirmation of what Ken H means by 33-50%? Is he talking number of OEMs OR total $$ revenues? Did anyone ask Mgmt what the status of major networking companies was re: Fibre Channel, especially in light of COMS financial decision to pull out ( I had to dig really hard into the Gadzoox S-1 to find the one and only reference to COMS' investment in ZOOX ). Lastly, I find it interesting that all the SI/Yahoo discussion is focussed on "product/pricing" when I am personally convinced that there are other factors that also play a major role in some of these OEM decisions, ie politics/relationships/location as well as sales/marketing execution. Did anyone take Ancor mgmt to task regarding these other issues and how Ancor perceives their own performance in these areas?

To: George Dawson who wrote (21727)	5/13/1999 9:59:00 PM
From: Greg Hull	Read Replies (2) \| Respond to of 29386

There were two annual meetings yesterday: the official sit-down meeting and the stand-up chat sessions afterward. Ancor management make themselves very accessible and stayed as long as people asked questions of them. While no secrets were shared, they embellished some of the points made during the official meeting. In no particular order here are some impressions I had of the second meeting. Ancor must be one happy workplace. There is extremely little turnover even though management describes salaries as below average. This in an environment where skilled labor and management is being hunted aggressively. What is their secret? Stock options. I got the impression that turnover (including senior management) would have been significantly higher had the options not been repriced. Ancor may need additional funding later this year. This depends on how quickly shipments ramp. If the ramp is soon enough and the receivables are collected promptly, the cash drain can be drastically reduced. They seemed very confident that the ramp would be in place by Q4, and when "or Q3" was suggested by a shareholder, "or Q3" was seconded. I did not get the impression that they were blowing smoke. If external funding is required, they would prefer a strategic investment from "someone who is more than a banker", if at all possible. They would rather not do a secondary, and they will avoid a convertible preferred like the plague. When they did the Series C placement they did not have many options. While at the time the fact that the Series B shareholders had not converted was cited as a positive, it, in fact, limited the financing options. Potential equity investors did not like the risk of the convertible overhang (hmmm). The need for more cash was imminent and so another round of convertible preferred was the only viable option. Ancor does not view the departure of 3Com from FC as a positive. They apparently liked Ancor's architecture and cost position. We were told that 3Com's modus operandi is to OEM, with the intention of owning and having the lowest manufacturing cost. 3Com is not likely to return to the FC marketplace soon. Ancor is not likely to re-acquire Sequent's business because the cost for Sequent to certify another vendor is millions of dollars. Cocoon will reduce the cost advantage that Ancor has over Brocade, but will not leapfrog the MKII. Ancor's next switch (5th Generation?) with the 16 port ASIC will re-establish the significant cost advantage Ancor currently enjoys. The 16 port ASIC will be capable of 2Gbps, though the need for this speed, today, is limited. This ASIC will be used in the 8 port switch as well. The 16 port switches are expected to be the most popular models sold. There is a need for 8 port switches for the NT market, and larger switches for the enterprise market. Ancor is working with INRANGE to develop a 256 port switch. The shared memory architecture of Brocade's switches is fine for the low port count switches, but does not scale well for larger fabrics. Ancor is much more focused now than in the past. Switches are their business; their only business. The FC switch market will be expanding quite rapidly in the next 4 years. They are no longer making adapters, writing drivers, etc. They will not make the FC/ATM or FC/GE gateways, but will help others make them to expand the market for FC switches. Product expansions will come through acquisition, though it is more likely that Ancor will be acquired first. It sounds likely that we will see a managed hub with the Ancor name on it. Though at first this seems in contradiction to the focus dictum, the difference between a managed hub and switch is software. It sounds as if Brocade might be working on a similar product. It is possible that the hub can be field upgradeable to a switch with the purchase of a software license. A product that Craig Stevenson would be sure to like (albeit two years later than desired). They're having a lot of fun on Blue Circle Drive (though they'll be moving soon), and it sounds as if their money losing quarters may be numbered. Greg