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2001, February - week 3, news archive

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February 21, 2001 - EMC reaffirms 2001 goal and comments on business blimate. Through the fourth quarter of 2000, EMC's results have been extremely strong despite the emerging slowdown in the United States economy. Thus far in the first quarter of 2001, global demand for EMC's information storage systems, software and services is strong. Pockets of the U.S. have been challenged by a sharp drop-off in spending by Internet companies, but overall demand from large global companies, deployment of networked information storage, and the growth of international business continue to be strong. EMC continues to march toward its revenue goal of $12 billion in 2001, in a total market anticipated to exceed $50 billion.

Since last November, EMC Executive Chairman Mike Ruettgers has been sharing his view that the largest risk to today's U.S. economic climate is the risk of self-fulfilling prophecy. If enough pundits continue to predict that the U.S. economy will slow further, it will do just that. This is a situation that EMC, like the rest of the world, is watching closely. Given this uncertain U.S. economic climate, EMC expects revenue growth to be in the range of 25-35% for 2001.

With regard to near-term outlook, EMC continues to expect strong growth marked by demand from Global 2000 companies, in spite of a challenging environment in the U.S. Companies experiencing capital constraints, primarily the dot-coms, have slowed their IT spending or simply ceased to exist. EMC believes weakness from the Internet sector will be offset by the investments being made by large companies in building the information infrastructures they need to compete and win in today's networked economy, and by the comparatively strong economic environments outside the U.S. However, large companies' approval processes for major IT projects may lead to longer selling cycles for even the most strategic investments.

EMC has noted that many industry-leading CEOs are taking cues from past slowdowns, when they learned that leaders have greater opportunity to gain share and become even stronger if they push forward rather than pause. At the same time, most Global 2000 CIOs continue to approve investments that demonstrate clear business value. One thing is for certain in the information age: information continues to grow and it has to go somewhere. Regardless of the economic climate, EMC intends to gain market share, invest in its brand, increase market presence, watch costs and inventories, and grow at a robust rate in the year 2001. Overall, EMC's competitive lead has never been stronger and EMC's market opportunity has never been larger. ...EMC profile

Editor's note:- the EMC Regulation FD statement above is confluent with an outlook which is very similar to those I expressed in the nibble article on the right, which was published several days before EMC's press release. As a dot-com publisher we get better visibility than most individual companies about what's happening in the markets we cover (SPARC servers and enterprise storage). Is the economic outlook affecting us? Sure:- but that just means we've downgraded our revenue growth prospects this year from 3 digit percentage growth to high 2 digits.


SAN JOSE, Calif - February 21, 2001 - Brocade Communications Systems, Inc. (Nasdaq: BRCD) reported today record revenue and earnings for the first quarter of fiscal 2001 (Q1 01). For Q1 01, net revenues were $165.0 million, as compared to the $42.7 million reported in the first quarter of fiscal 2000 (Q1 00) and the $132.1 million reported in the fourth quarter of fiscal 2000 (Q4 00). Operating income as a percentage of net revenues in Q1 01 increased to 26.9 percent of revenues, up from 26.6 percent in Q4 00. This is the seventh consecutive quarter that operating income, as a percentage of revenues, has increased.

Greg Reyes, Brocade President and CEO, commented on the quarter: "We are very pleased with our financial results for the quarter, which demonstrate our continued focus and execution in providing the world's leading networking infrastructure for storage area networks. In every industry, in every sector across the globe, companies are relying on Brocade SAN infrastructure to network their servers and storage, keep pace with exponential growth in data storage requirements, and deliver a platform to reduce the cost of managing, administering, and moving business-critical data." ...Brocade profile


ARMONK, N.Y .- Feb. 21, 2001 - IBM today announced a new portfolio of products and technology - including an industry-leading iSCSI network storage appliance - all designed to lead the industry's rapid migration to open storage networking. Today's initiative delivers on IBM's commitment to create interoperable storage technologies that leverage the function yet reduce the complexity of SANs. They are designed to help customers manage the explosive growth of data and the resulting need to have faster, flexible, universal access to that data. IBM's storage networking initiative includes:
  • The industry's first open NAS Gateway, IBM TotalStorage Networked Attached Storage 300G, which allows Local Area Network (LAN)-based clients and servers to easily interoperate with an existing SAN, leveraging the features and performance of a SAN with the ease and convenience of a NAS product.
  • The IBM TotalStorage IP Storage 200i, a high-performance, low-cost iSCSI storage appliance that connects users to pooled storage on a network using Internet protocols. iSCSI delivers complete storage functionality for departments/workgroups, mid-market customers and service providers.
  • Customer-focused solutions, including the introduction of prepackaged storage networking products, designed to help businesses of all sizes more easily take advantage of the opportunities the SAN environment offers.

"As e-business and the Internet move storage from the back room to the heart of the IT network, customers are looking to take the islands of storage they have built and create interoperable, open storage networks, be it within a single department or a worldwide enterprise," said Linda Sanford, senior vice-president & group executive, IBM Storage Systems Group. "With customers increasingly moving to storage networking, IBM is better positioned than ever to lead the industry and expedite this significant business transformation." ...IBM profile


AUSTIN, Texas - February 20, 2001 - VIEO, Inc. today announced that it is developing a suite of software products that will enable and accelerate the deployment of InfiniBand technology. Additionally, the company is developing middleware that will unleash InfiniBand's power to deliver dramatic price/performance improvements to data center applications.

InfiniBand is the new switched fabric input/output (I/O) architecture standard developed by the InfiniBand Trade Association, a consortium of more than 200 companies formed by Compaq, Dell, Hewlett-Packard, IBM, Intel, Microsoft and Sun Microsystems. Proponents claim that InfiniBand's serial, channel-based architecture will replace conventional parallel I/O buses in computers, the ubiquitous standard being PCI and PCI-X, which cannot support the ever-increasing scalability and performance demands of the Internet economy. InfiniBand is also an excellent storage interconnect that will allow data centers to deploy a single, standard I/O technology for system and storage area networks.

The VIEO Fabric Manager is a suite of management and agent modules that fully conform to the InfiniBand Architecture specification, which are required for devices to be InfiniBand-enabled. VIEO also provides extensions **to fill gaps in the current 1.0 specification, as well as interfaces to third party management applications. VIEO is working with a number of hardware vendors to embed its software in a wide range of devices, including servers, adapters, switches, routers, storage arrays and appliances. These early market movers will drive data center adoption of switched fabric computing topologies, which are projected to become commonplace over the next few years. VIEO will demonstrate its Fabric Manager software suite with its partners' hardware at the Intel Developer Forum in San Jose, CA, February 26 - March 1. ...VIEO profile


BETHESDA, MD - February 20, 2001 – OTG Software and research firmCreative Networks, Inc. announced today their findings in an extensive email management survey. This survey was based on interviews with IT professionals from Fortune 500 and similarly sized companies throughout North America regarding email management and archive accessibility, message store restrictions, archiving of messaging servers and unplanned server downtime and restoration. The results from the study showcase three major business challenges that are being affected by the exponential growth of and reliance on email and the business critical nature of information being stored in today's messaging systems. The three challenges associated with email management are productivity, IT administrator time and organizational risks.

This study comes at a critical time when email has become the dominant means of corporate communication and as users continue to accept and adopt email as an important business tool. According to the study, 60 percent of business critical information is stored in a messaging system. Some highlights from the survey:-
  • Since 81 percent of end-users cannot access email archives, administrators waste an average of five to six hours per week recovering such archived messages for them.
  • If the end-user or administrator does not have information regarding when the email was created or backed up, the recovery process can take days.
  • Users are 20 percent less productive when the messaging server is down than when the system is running.
  • As email becomes a more critical part of the business infrastructure, the percentage of mission-critical data on the message store will continue to increase.
  • Doubling the number of email users increases an administrator's time spent on messaging-related activities by 25 percent.
  • Organizational risks include the lack of email and document retention policies aimed at preserving important company information. This is a major concern since requirements to recover email messages and attachments are increasing for legal discovery and regulatory compliance.
  • Only 49 percent of the surveyed companies currently have an email retention policy. 41 percent of users within those companies ignore the policy with, in most cases, no consequence for the end user.
  • At the same time, 28 percent of companies surveyed anticipate being hit with a major email recovery task, such as a legal discovery request, within the next 12 months. Alarmingly, 34.5 percent of surveyed companies would be unable to recover the relevant messages in such a circumstance.

"Storing and accessing critical business information is paramount to a company's success," said OTG Software's William Caple, Executive Vice President. "OTG has been addressing these fundamental business challenges for the past seven years and now offers the most dynamic and complete solution for overwhelming growth of and reliance on email in today's business environment." ...OTG Software profile


Austin, Texas - February 15, 2001 - Dell Computer reported Q4 revenues of $8,674 million a 28-percent increase over Q4 the previous year. Full-year revenue totaled $31.9 billion, up 26 percent. However, profitability as a percentage of revenue has declined by about 9% compared to Q4 a year ago. In a related release also issued today - Dell announced that it is eliminating about 1,700 regular full-time positions (about 4% of workforce), mostly in administrative, marketing and product-support functions in its Central Texas operations, as part of ongoing refinement of the lowest-cost, most customer-focused business in the global computer-systems industry.

Momentum associated with Dell's strategic push into enterprise-class computer systems-workstations, servers and storage products-grew in the quarter, with combined revenue up 42 percent. Industry analysts said shipments of Dell PowerEdge servers rose at more than four times the rate of the largest competitor in the category. Sales of high-density rack-mounted servers more than tripled, and accounted for more than 40 percent of Dell's server revenue.

" Industry demand was far softer than anyone expected when we entered the fourth quarter, but the inherent advantages of our business model helped us grow more than four times faster than the overall rate, " said Michael Dell , the company's chairman of the board and chief executive officer. " Continually adjusting our cost structure allows us to extend our leadership in a challenging environment, and the benefits to customers are becoming even more pronounced. " ...Dell Computer profile


PALO ALTO, Calif., Feb. 15, 2001 - Hewlett-Packard Company (NYSE: HWP) today reported financial results for its first fiscal quarter ended Jan. 31, 2001. The company reported first quarter revenue of $11.9 billion, compared to $11.7 billion in last year's first quarter, an increase of 2% as reported and 7% before the effects of foreign currency.

"Clearly, this was a tough quarter and our results reflect that. Continued deterioration in the U.S. economy, and related weakness in consumer and business IT spending, contributed to a sales slowdown in North America with revenues declining by 6% year over year. More specifically, difficult U.S. market conditions impacted our consumer and commercial desktop PC business and our printer hardware business," said Carly Fiorina, chairman, president and chief executive officer.

The release also says:- Enterprise storage revenues were up 20%, with continued strength from HP's core HP Surestore Disk Array XP512 storage offering as well as leading-edge storage area network solutions. The overall XP storage business grew 50% this quarter. Software revenues were up 21%, with HP OpenView service management software revenues up 38%. ...Hewlett-Packard profile

Editor's comment:- it looks like HP's storage business did much better in revenue growth terms than most of their other products, and although 20% annual growth rate is still way below the growth leaders in this market, that's a historic figure, and their newer products may do a lot better this year. Their PC business is a dog in the present market, but that's going to be the same for most PC companies, and not a market we cover.


MUNICH, Germany, Feb. 15, 2001 – JNI® Corporation today announced it has added four new distributors serving more than 100 resellers in Europe. The new distributors are ELD in Germany, Four Leaf in Denmark, IDEAL Hardware in the United Kingdom, and Infodip in France. Along with ACAL Fibre Channel Solutions, JNI authorized distributors serve more than 200 resellers in the European market.

"These major distributors give us the ability to deeply penetrate the fast-growing European market," said Neal Waddington, President and CEO of JNI. "Our European distribution accounted for more than 20% of JNI's revenue in 2000, with sales focused on the Solaris-EMC enterprise market. Our new distributors will expand our non-Solaris sales of products through its network of resellers." ...JNI profile

EMC Reaffirms 2001 Goal and Comments on Business Climate

Brocade Announces Record Revenue and Earnings for First Quarter of Fiscal 2001

IBM Announces New Building Blocks for Network Storage Architects

VIEO Enables InfiniBand Architecture with Powerful Software Suite

New Study by OTG Software and Creative Networks Quantifies Email Chaos

Dell Delivers Strong Q4 Operating Results; Full-Year Revenue Up 26 Percent to Nearly $32 Billion, but Profitability has Declined, so Dell Reduces Workforce by 4%

HP reports first quarter results

JNI Adds 4 Distributors in Europe for SAN Products

earlier news (archive)
Military storage - Killerbyte
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If Megabyte got into serious trouble he would send an SOS to his young niece Killerbyte. Killerbyte was a veteran of the deadly Rat Wars. Her favorite writer was Tom Clancy, and her favorite food was freshly wrestled Catfish
.

Nibbles:- How to cut back expenses 21st century style.

Spend less on PC's, mailroom and paper. Spend more on servers and storage. That's what everyone's doing, and it's showing in IT companies' results...

In the current economic climate most organizations will find it a no-brainer to change their desktop buying strategies to keep their old PC's for another year before replacing them. In fact many new PC's, which have a clock speed twice as fast as the your current office generation may actually run slower, because of power saving modes which can't be turned off without crashing everything, fatter operating system software and loads of ready to run multimedia options which you don't even use at work.

You can't avoid upgrading your servers. For many companies, their web site is how they communicate with customers and attract new ones. The faster the better. As you add on 2nd generation CRM software to analyse the effectiveness of those web transactions, you need faster servers and more storage.

The good news is that you can easily justify doubling your server budget by cutting back on more traditional and wasteful forms of communication. Your mailroom costs can be slashed because most communication can be by web and email instead of post and Fedex. Your marketing costs can also be slashed while getting better results. You don't need to send all those mailshots and print new color catalogs - ever again..

Remember the old days when offices used to have filing cabinets? Hire a skip and throw half of them away. You don't need what's in them. You do not have to file every magazine, mailshot, catalog or letter to keep your business in good shape. In another 6 months you can throw away most of the filing cabinets which are still left. If you have legacy paperwork which you need for legal reasons, digitise it or archive it.

Here's a rule of thumb...

If it's not already digital, it's probably not important. That saves you masses of floor space. You can cut down the number of floors you rent, hire more people or create more meeting rooms.

Plan to buy more storage systems. You know the sort of thing:- RAID, NAS jukeboxes, tape libraries. You're going to need a lot more of that then you think.

You may say that these ideas are a little extreme...

As a publisher, we switched from a paper based company to an electronic based company about 5 years ago. When we did paper, we used a lot. We also fuelled the old paper economy by selling zillions of mailing lists from our own and other publications to help vendors communicate with their markets.

Now, we don't even send mailshots to advertisers. They want to see what we offer? They come to our web site, and we communicate by email. End of paper. Good for trees and global warming.

Now you have to be a little bit suspicious of any born again evangelists, because your own situation may not be so extreme at either end. But if you're trying to understand why most IT company results today are showing that the PC market sucks, whereas the server market is expanding, and the storage business is exploding, it's because a lot of managers in a lot of organizations have been going through the thought processes above, and the pressure of a market slowdown will make a lot of this stuff change faster.

Another cost cutting measure when you're trying to recruit hard to get experienced people...

Recruit mice instead. You can pay them less. They take up less space, and they like working night shifts. But the best ones have already gone;-)

.
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