Track the companies that matter to you. It's FREE! Click one of these fan favorites to get started: Apple; Google; Ford.



There's Hope Yet for Iomega

Cheap home networking equipment isn't just being used in the home. Small and midsize businesses also like the convenience of being able to build simple networks with components from retail computer and office supply stores. And the major IT vendors are clamoring to cater to this market niche.

As is typical, small and midsize businesses are leading the way in the economic recovery, as large corporate IT spending remains sluggish. So hardware manufacturers are turning to the small and midsize businesses to help boost profits. Dell (Nasdaq: DELL  ) and EMC (NYSE: EMC  ) recently announced they have partnered to offer a new storage area network (SAN) server with 480 gigabytes to 3 terabytes of space. Sun Microsystems (Nasdaq: SUNW  ) has partnered with Procom Technology to get into the network-attached storage (NAS) market. And Hewlett-Packard (NYSE: HPQ  ) followed close behind, announcing it has partnered with Iomega (NYSE: IOM  ) to offer a similar product. Iomega is also separately offering a lower-end NAS server also targeted at small and midsize businesses.

SAN and NAS are two different ways of storing data. Generally speaking, SAN is used in larger server-driven networks, while NAS is more applicable to simple networks. But the specifics are irrelevant, with the point being that the market for simple networked storage equipment is really starting to open up. According to research firm Gartner, the lower-end NAS market is expected to grow at a compound annual rate of 16.7% through 2007 and reach $3 billion.

The market is already getting crowded with offerings, but I still think this might be the break Iomega has badly needed. It was a Wall Street darling in the mid-1990s, before the Internet companies took off, but hasn't performed well since -- despite numerous product successes and maintaining respect for its brand with retail consumers. And that's why I think it might just finally be able to pull itself up by the bootstraps.

Networking equipment is selling to ever-smaller businesses, and the people buying that equipment tend to have similar yet slightly more advanced needs compared with retail home users. And because Iomega is well-positioned as a leader in storage equipment for this market, the company could now look attractive to a major player wanting to lock in market share.

Will this move save Iomega? Share your opinions on our Iomega discussion board.

Fool contributor Mark Mahorney doesn't own shares of any companies mentioned.

Read/Post Comments (0) | Recommend This Article (0)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Compare Brokers

Fool Disclosure

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 508117, ~/Articles/ArticleHandler.aspx, 10/27/2016 5:20:54 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Today's Market

updated 8 hours ago Sponsored by:
DOW 18,199.33 30.06 0.17%
S&P 500 2,139.43 -3.73 -0.17%
NASD 5,250.27 -33.13 -0.63%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

12/31/1969 7:00 PM
DELL.DL $0.00 Down +0.00 +0.00%
Dell CAPS Rating: *
EMC $0.00 Down +0.00 +0.00%
EMC CAPS Rating: ****
HPQ $13.91 Up +0.01 +0.07%
HP CAPS Rating: ***
IOM $3.84 Down +0.00 +0.00%
IOMEGA CORP CAPS Rating: No stars