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Stocks N / Network Appliance, Inc.


Subject:  Re: NTAP (from EMC board) Date:  2/1/2000  4:01 PM
Author:  rchampoux Number:  1559 of 6785

Someone posted on an SI board that EMC's recently-released NAS revenues include the Symmetrix boxes that are attached to the Celerra file servers that they are selling. If true, this means that the latest NAS market share figures (EMC at 18% share of the NAS market, up from 8% last year; NTAP at 46%, up from 41% last year) may not constitute a pure "apples to apples" comparison.

The reason is that EMC's primary market is in its Symmetrix storage systems. Usually, these connect to general purpose servers such as Sun servers. However, EMC does offer a dedicated file server called Celerra. Celerra works only in conjunction with its Symmetrix systems. Formerly, Celerra did not account for a large component of EMC's sales, nor did EMC particularly push sales of the Celerra product. That approach now appears to be changing. At present, Celerra is EMC's only NAS product.

It's very easy to visualize a scenario in which EMC decides that it wants to be the "King of NAS" or the "fastest growing NAS company," and offers its existing Symmetrix customers very favorable incentives on Celerras in tandem with the Symmetrix boxes that they are already purchasing. Result: sales of Celerra increase, as does the NAS market share (especially if measured in terms of revenues - EMC's products are expensive). The fact that Symmetrix box revenues are purportedly included in the NAS revenues makes the divergence even greater, IMO.

While I think EMC's stated intention to enter the NAS market is significant for NTAP, I don't find the existing market share numbers significant for the above reasons.

Ownership percentage: Formerly EMC:NTAP 1:1, now 0:1.

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