Post of the Day
September 13, 2000
Rat's Broadband Bandwagon
Posts selected for this feature rarely stand alone. They are usually a part of an ongoing thread, and are out of context when presented here. The material should be read in that light. How are these posts selected? Click here to find out and nominate a post yourself!
Fat Pipe #3 data storage/movement...
Fat Pipe #3 - data storage/movement...
This portion of the Fat Pipe series will be a little bit longer than the previous two due to the amount of material we need to cover and the creative mood that sometimes passes through the wind in my home. Yet, I'm really strapped for detailed discussion and rolling up the sleeves to get under the hood of each and every segment. Let this Fat Pipe post, like the others, simply be a launching board for you to dive in and explore the investment opportunities within the various segments of data storage and data transport that are so important in one's investment portfolio.
Yes, I'm tardy on this installment of the series. Why? I'm swamped with two things at the moment. The first is work at the opera house. The second is doing my quick DD on a lot in Colorado to build a house. That involves reading thousands of pages of material which I've been doing and educating myself to the point I can launch into the unexpected project at this point in time with some sort of footing to hold my own. The phone has been tied up every afternoon and evening as we set up appointments with architects and builders for an upcoming trip to finish our DD. So contrary to rumors on this board that the dog ate my homework (I have no dog), it's work and DD that kept me at bay after the computer fiasco. And what a fiasco that was.
For those that don't know, relief has hit in terms of my computer situation. Read all about it:
Allow me to wax on about the good nature of my graphite colored PowerPC G3 366 MHz, 192 MB of built in memory, Mac OS 9.0.2 International Version using, Airport wireless Card carrying iBook that survived a bath due to my less than graceful upsot of a tall glass of water. I shut the iBook off, took it apart and hung it out on the laundry line to dry for a few days. After assembling the various pieces in what looked to be their original 'home slots', I approached the much awaited moment of pushing the start button in hopes that my loss of sleep throughout the nights as my dreams chastised me for being a bull in a china closet was not all in vain. Ignition was successful even though the date has jumped back to February 6, 1904 while the time is off by a half a day. That's easily fixed in the control panels. However, before we rush back to Y2K, let's have some fun while we're here in 1904. Being the seasoned traveler that I am, I always go on a trip with some cash. Let's have some fun with that cash. Remember, we're here visiting 1904, so let's sit down with a Wall Street type with frock and top hat to have him do some planning with the cash I have in my wallet.
Let's see, how much do I have on me? How about that, I've got $563 in my travel wallet. The Wall Street tycoon doesn't have a clue what I'm talking about and he thinks I am dressed very improperly to be discussing money in my Levi's and t-shirt, but I assure him I have a goal. I inform him to buy 2 shares of GE which he says are selling for over $100. That's $236 spent out of the wallet. I then tell him to take a chunk of money and keep it for 7 years in a cash account and to get us in on IBM when it lists in 1911 knowing that it will split 15 times before September of Y2K. I suggest $100 worth. He thinks I'm really nuts at this point. Then I tell him to toss $80 at Coca-Cola� when it lists in 1919 knowing that paying $40 for one share of Coke� will be worth over $6.7 million down the road in 1998. Two shares ought to do it. He asks why in the world I'm interested in a mad scientist's cough syrup with a medicinal kick that the clergy have been calling a sinful beverage. I tell him not to worry, that someday every kid in America and throughout the world will be drinking it - often. Loud laughter rings the rafters at this point.
He clears his throat and is about to have me removed from his office, but I assure him that I will pay his fee and he is to do exactly what I say. I've spent $416 plus $30 for commissions/fees and decide to 'blow' most of the rest on a real estate deal. I tell him to buy some upper west side real estate piece of land in Manhattan with the $115. He's rolling on the floor laughing after I've signed all the proper documents and instruct him to do exactly as I've instructed. He giggles that maybe I should use the last $2 to visit a good barber and go see a nut doctor he suggests. I thank him for the suggestions, but inform him I'm going to see if I can grab some copies of the origianl Beattrix Potter book The Tale of Peter Rabbit to take to my kids. He laughs so hard, he's nearly choking. I shake his hand and walk out in the hallway. There, that was easy. See you in 96 years. I open up the control panel Date & Time and buzz ahead to Y2K.
Allow me to present the next in the series entitled Fat Pipe #3 - data storage from my water proof iBook - courtesy of Mr. Steve Jobs and the rest of the orchard gang in Cupertino and Ireland.
In Fat Pipe #1 - core and Fat Pipe #2 - edge, we covered some of the basic territory of Internet protocol-based services that much of the plumbing is designed to handle. It's a software-intensive, high switching cost and high barriers to entry game for both the core and the edge markets that involve some pretty impressive companies going for some pretty big slices of pie over the next decade. We identified what was 'broken' and how the players involved are racing to offer a 'fix'. The series of Fat Pipe posts are only intended to identify these games and what companies are involved in the games on a level we can all grasp. The original intent was designed to do that and possibly find the top candidates in order that perhaps one would stand out above all as an investment vehicle. I think it's fair to say that as we move through the games and understand the dynamics of how these games are played, narrowing the entire IP/Broadband space down to 'one candidate' becomes difficult at best. However, of the top candidates, it can indeed lead to one promising choice that covers a spectrum of the area. So, we move on to data....
Enter the smoke filled room of passion and emotion. If you don't understand that statement, you've never been in a discussion on the EMC, the Network Appliance, the Brocade, the Ancor, The QLogic, the Emulex, the Procom, the Sun, the IBM, the McData, the Gadzoox!, the Vixel, the Intel, the Exodus, the Inktomi, the NetCache, the Storage Networks or a number of other boards where passion and emotion inspire all sorts of interesting, heated discussion involving the shape of the data storage and transport industry.
Let's put that in perspective:
Whip out your copy of The Wizard of Oz, fast forward to the Lion's song 'Courage' and substitute the word 'Storage' everytime he says the word 'Courage'. What? That doesn't do it for you? Here's a better one. Pull out your copy of The Music Man and fast forward to Robert Preston's life changing rendition of "Ya Got Trouble" and substitute the word "Storage" every time he says the word "Trouble". You can talk about historical moments in film or on the stage, but those are two defining moments in recorded American musical history. Burt Lahr's Cowardly Lion speaks for itself. If you've never had the extreme pleasure of seeing Robert Preston's masterful performance to know what the combination of talent, vocal instrument, physical instrument, skill, passion, intelligence, experience and dedication can do when all combined in a vehicle like Meredith Wilson's The Music Man - then all I can say is you've missed an element of life that every soul needs to be injected with on an occasional basis. "Get thee to thy nearest video store via the internet and place a copy in thy basket for immediate checkout and delivery!" -- BB
The introduction to the song "Ya Got Trouble" begins with these words:
"Well, either you're closing your eyes to a situation you do not wish to acknowledge - or you are not aware of the caliber of disaster indicated by the presence of a pool table in your community."
If you will allow me to take some liberty in order to slightly alter that introductory line to the song that follows and apply it in our situation and discussion of storage, it would read like this:
"Well, either you're closing your eyes to a situation you do not wish to acknowledge - or you are not aware of the caliber of investment opportunity indicated by the insatiable appetite for exponential growth in the data storage industry in the global community."
Too bad Robert Preston's not around any longer to utter that phrase for us, but I'm sure he could color it with just the right emphasis to stress the excitement, passion and emotion that it truly deserves. Okay, enough playing with The Music Man. Robert Preston - thanks for all you gave us while here on earth. You left your mark in a big, big way. Bravo!
Time to move on with matters at hand. I hope that I have correctly set the stage that of all the individual segments of the IP/Broadband space, storage is one that is filled with opinion, ego and thought. Why is that? Maybe it's a 'guy' thing. Maybe not. I recall touring some model homes as well as existing homes this summer in the states with my wife. While she was marvelling at bay windows, high ceilings, open spaces, wooden floors, granite kitchen counter tops, tile and what not - I was digging through all the closets, cabinets, garages, opening every door and checking every little nook and cranny. Why? One word - STORAGE! Is that a 'guy' thing, or what? To be fair and to keep in context of the Fat Pipe series, I was studying the bathrooms as well. We all know it's an integral part of our life and it never hurts to check the flow, the size of the facility and the comfort level of those rooms. It's rare I find one that really looks like it has everything I need, but there's always the possibility of designing and building one's 'dream bathroom'. <ggg> Ditto for storage. We need storage. We want storage. We love storage.
Here's an account of my house 'viewing' experience with my wife.
(The couple just finishes touring a beautiful home up on a ridge overlooking the East San Francisco Bay.)
Wife: "Did you notice the beautiful flooring in the kitchen and how the colors in the tile really accentuated the rich color of the cabinets?"
BB: "Uh, I didn't really notice."
Wife: "What did you think of those gorgeous bay windows and the view?"
BB: "Where were the bay windows?"
Wife: "In the living room, silly. I just loved the vaulted ceiling in there and the complete sense of space as you walked through the foyer. It gives the immediate impression to guests as they walk through the front door that this is a very open, warm, nurturing environment? A real genuine comfort zone that invites one in to the house. Don't you think?"
Wife: "What about that master bedroom? I've never had a fire place in the bedroom before. I could really snuggle up with you and would probably spend some quality time in there reading some books."
Wife: "The lower level was stunning. It's just perfect for the kids. Play room, entertainment room, three bedrooms. The atmosphere was so friendly and......and......what's the word? Comfortable. That's it. It was comfortable. What did you think of the gorgeous yard? Is it perfect for the kids or what?"
BB: "There was a yard?"
Wife: "Dang it Bruce, did we see the same house?"
BB: "I think so."
Wife: "Well what were you looking at the whole time we were in there?"
Wife: "Well, what about it?"
BB: "It looks pretty good."
Wife: "This whole trip, you've really been irritating me with your stupid comments. Sometimes I wonder why I ever married you?"
BB: "Well. When we were dating, your apartment was too small for me to move in and to store all my stuff. My apartment was larger and had plenty of storage for all of your stuff. So you moved in with me. After a while, we liked the arrangement of living together so much we decided to get married and make it permanent. You see, it was all because of good storage."
Wife: "If you're not going to participate in this process of choosing a home for us to live in, then why don't we just forget about it."
BB: "Forget about what?"
Wife: "Forget about looking for a new house!"
BB: "Wait a minute. Wait a minute. I did look at something else in the house."
BB: "I did like the bathrooms in that last house. Good solid quality toilets with excellent flow. Good flow is important you know...."
(After several days of healing and mending for BB, the couple decides to build a new house in Colorado rather than buy a house. That's an entirely different ball of wax that I'm sure will be filled with enough trials and tribulations that by the end of 2001, you will all be able to find me neatly STORED in the basement of our new home contemplating the open, warm, nurturing environment of the main level of the house where my wife resides. <ggg>)
Before we get into the what's broken and how it's going to be fixed, let's step out and take a bigger picture view of this competitive thing I keep referring to as a 'game'. Let me put it into words that paint a picture we can all understand. Why? Because if we dig down underneath and examine all the white papers, the technical specifications and implications of each technology - be in the IP core router space, the data transport market, the voice over IP market, the new access market, core transport optical market or data storage market - it might not register as clearly as if we step back from that and view it in a larger perspective. I do this based on some of the comments I have received both on the boards and in private. If you recognize any of the 'twists' with the themes I mention as coming from you, I appreciate the avenues of expression.
Do you remember all of the hoopla and hype as well as the lead up to the two greatest runners going head to head for the Olympic Trials? Do you remember all the hoopla and hype as well as the lead up to the big 'skate off' between the two top candidates in the women's figure skating before an actual premeditated physical attack on one of the skaters came from the camp of the other skater? Do you remember other build up campaigns designed to set the stage for a 'game' that when it came down to it in the end, the question was "What was all of that about?". We see a lot of that in high technology markets. The best may not win. We may enounter all kinds of unusual events along the way to race day. We may enounter an unusual event on race day. We may lead all the way up to the Kentucky Derby and the top horse destined by everyone to be the 'winner' of the race, decides that she doesn't feel like giving it her all that day in spite of the 103 pound imp sitting on her back doing everything possible to change that attitude.
In other words, "it ain't over until the fat lady sings". I've been in the audience as well as on stage enough times to know that there is some truth to that in many operas/games. No amount of sitting on my hands, reading the program in the audience or chasing around the soprano on stage and fighting with the tenor is going to change the end result of the fat lady singing in some of the stories. At times, I've wished she would hurry up and get to the theater, warm up her voice and get on stage to bring down the curtain. However, it always takes time for that portion of the 'show' to arrive. We can speculate and bet on which one of the large ladies on stage will be the last to sing. It will come after somebody has taken the poison, someone has killed their enemy, someone has been reunited with their long lost brother at birth after being switched on that fateful day or any number of dramatic events along the journey. Some operas have more large ladies warming up to sing than others. Some 'games' will have more than one standing and singing at the end when the curtain comes down. And some, the ones that interest many of us the most, are the games when there's only one standing all alone on stage at the end of the 'show'. This comes after the carnage is burning all around her and lying out for the count before she sings the most glorious music and brings a resounding cheer of "brava Diva!" from the audience that made the investment to buy a ticket to see the show unfold to the end entirely worth it. In fact, the success will be so grand, the Diva will be invited to recreate the event in every major theater in the world, in every major opera written to have her standing strong and powerful when the curtain comes down at the end.
The network effect of such success breeds more success. (As if we needed inbreeding by some of these large ladies.....) The audience that follows this Diva around from city to city and performance to performance will enjoy the show and benefit from the experience. We're looking for such operas. We're looking for such games. We want to have tickets to the Diva's final phrases as the curtain comes down and the show ends for the others on stage while the Diva soaks in all the thunderous applause. It may not be pretty getting to that final phrase, but once all the armies are extinguished, the poison is drunk, the unions are made, the chorus hails praise to the Diva and the power is instilled in her direction - we know the show was worth it. Just ask the audience of Intel, Microsoft, Oracle, Cisco, Siebel over the years or the audience of Compaq, Dell, Gateway, Applied Materials, Sun Microsystems and others as well. The show has been good - and there are many others I didn't even mention.
That's not to discredit the games in high technology or the theory that when something is broken due to the demands of technology, a fix has to be found. That's the way it works. I simply wanted to paint the picture which illustrated that surrounding all of the games, there will be a lot of noise from the audience, from the chorus, from the other singers and from the critics before the large lunged soprano cuts loose with the "Fat Pipes in her throat".
What's broken and needs to be 'fixed'?
The Internet has opened the doors for this century to deliver services, products, applications, streaming video, streaming audio and e-commerce all over the global infrastructure known as bandwidth. There are no secrets there. In fact, that's the same start I used in the previous Fat Pipe post. According to recent estimates, 75% of all information technology hardware budgets will consist of storage hardware by the year 2003. Wow! Let's bring back the voice of Robert Preston to repeat my version of his lead in to the "Trouble" song:
"Well, either you're closing your eyes to a situation you do not wish to acknowledge - or you are not aware of the caliber of investment opportunity indicated by the insatiable appetite for exponential growth in the data storage industry in the global community."
Okay, fine. We know there's some demand for storage. But what's broken? Let's just add a few closets and maybe one of those "oh, so attractive metal sheds" out in the yard to store that never ending 'stuff' that comes into our house. Hey, if we run out of room in there, let's haul our 'stuff' down to a storage rental unit for $25 a month in hopes that the mice and critters won't consume it all. You forgot where that old pair of K2 skis were stored? No problem. Ask the wife and she'll tell you they are in the corner closet in the basement next to the stairs. What about the 1988 tax records? On the third shelf in bedroom number 4. That old fishing hat? It's in the big cardboard box under the sack of nerf balls and frisbees in the shed. How about my golf trophies? You what? You tossed them out? Why? No room to store junk? How about the high school year books? In a box down at the storage rental space. Okay. Whether the entire storage system is in one's memory or on paper for your household, it just keeps growing and you just keep organizing it all. It never stops. We can never have too many closets, boxes, crawl spaces, attics, under the stairs nook and cranny spots. What if you had to access anything in your storage in a split second and get it in the trunk of your call to transport? What if that old fishing hat was needed now? No problems, right? Wrong!
The connection of the worlds computers and the need to store data has outgrown the closet space retrieval system. The Internet has an insatiable appetite for data. Data that has to be stored. Data that has to be accessed. Data that has to grow. Data that has to be available now, not in a few seconds - now. In fact, we're talking about much of that data and information as being business-critical data that has to be captured, processed, stored and manipulated in the business environment. What's caused this business-critical data? There is an increased reliance on applications that handle business intelligence, decision support, data warehousing, data mining of large databases, disaster tolerance and recovery, enterprise software, imaging, graphics, web-based business operations, e-commerce and customer interactions over the web. It has all placed an intensified demand on data centers. This has increased focus on performance, scalability, management and flexibility of the systems that use business-critical data. This has all increased the number of input and output transactions (I/O's) that are required of computer storage systems and servers. What else can we toss into the problem? How about all of the above becomes even more complex when we factor in that it takes place with multiple incompatible server operating systems in the Windows NT and the traditional UNIX environments. Houston! We need some help!
Companies are being forced to toss large amounts of money and personnel to manage and maintain these storage networks. Although LAN and WAN networking speeds increased 1000 times in the 90's thanks to advances in ethernet and ATM, the storage-to-server data transmission speeds increased by less than ten times during the period. The SCSI (small computer systems interface) was the traditional way of linking a server with a liimited number of storage systems in close proximity due to the nature of SCSI (12 meters or less). Speed was limited, distance was limited and the number of devices on a single bus was limited. What's broken? We've got a bottleneck between the LAN/WAN and business-critical storage systems and servers. A bottleneck problem indeed.
It sounds like that old 'flow' problem again doesn't it? You're right. It is the old 'flow' problem again. Enter next generation network architecture for storage. Add in the chain and ball, short end of the water hose, a 3 meter electric cord when the job really calls for a 5 to 10 kilometer one that can run enough juice through it to goose you if you're not grounded. We need a fix. We've also got the problem that data seems to be breeding faster than all the rodents are. Hey, be careful there. Nobody outbreeds a rodent! Data is doing it though. Go data! Breed, breed, breed! There are over thirteen thousand posts on this board alone. You can access any of them as well as the profiles of all the participants after you have logged on to Fool.com using your cute handle like Woolybooger, Trenchrat, Major33, HokieHarry@WalMart.com, Kingrex, surfcr8z, Loafer409, OtterPater, HandofFate or JohnVibes1 along with your unique password. That's data that has to be stored, maintained and accessed. That's only one message board at one company with a short list of Fools.
I could have gone on and listed at least 100 or more, but you get the idea. Visit Amazon.com, Yahoo!, Lycos, Quicken.com, BigCharts!, Silicon Investor, USAToday, New York Times, TheStreet.com, eBay, Tickets.com, TigerWoods.com, or any of your favorite websites, any corporate site, any home web page and multiply by more fingers than exist on those hands you use to type your messages to come up with how much data is accessed per minute at all of these sites. That data is growing and growing and growing and growing. We store it here. We store it there. We even store it between home base and the recipient to speed up the access to data. We store it everywhere. Where to store it all. Where to file it. How to store it. How to file it. How to retrieve it. How to secure it. All at speeds that have the end user saying - "we want it now, buddy!". As usual, that's a simplification of the situation, but I'm trying to stay within those bounds because you have to break it down to that level. Even if its rocket science, we've got to break it down to understand it. Rocket is loaded with Tang and jerky. Funny guys in tin foil buckle in for the trip. Big engine barbecue sends rocket high in sky. Guys in tin foil float in space, drink Tang and chew jerky while doing 'stuff' with high priced electronics. Guys get back in rocket and buckle seat belts. Rocket comes back home and guys swap their tin foil for leather jackets and baseball caps while waving at the crowd.
You're in a massive 8 story library in a major metropolitan city and have 15 seconds to locate a business-critical document that is 198 pages long to get in your briefcase and deliver to a potential client on the other end of the connection. You want to do it safely, quickly and have a back up as well as a copy. The whistle blows and you look at the Librarian as if she's going to help you with your problem. She stares back with a puzzled look and says "it's in here somewhere, go find it". You turn your head from side to side, head for the first flight of stairs and gong! The buzzer rings. Game's over. That multi-million dollar potential customer on the other end of the phone hangs up and connects elsewhere. Time is money. Data management is business-critical. And you thought all those filing cabinets and choosing what types of plants to decorate the tops of them with was a problem to deal with......
Do you think Yahoo! would have such 'stickiness' and customer appeal if everytime you clicked on a link to access some data the world wide wait kicked in allowing you time to wash the dishes, tuck in the kids for bed, water the lawn and brush your teeth before it appeared on your screen? What about Lycos? Excite? AOL? Earthlink? Amazon? No way. They would be out of business if the data could not be accessed and delivered ASAP. By the way, kudos to the Fool for continually upgrading and speeding up the data access to help us on our quest for retrieving data. Hats off to Fool IT and keep up the good work! I do miss my handy-dandy pull down menu in the upper right corner because I loved to use that thing as well as the fact that I always love to say the words handy-dandy. However, technology has to move forward, right? Pull down menu or not.....
How about some examples of implementation where the 'broken' has been fixed before we get into the 'fix'?
Your bill arrives and you have a problem with your credit card monthly statement. Something doesn't look right at all with one of the charges. You call up the card services department, navigate your way through the touch tone tango to hopefully end up with a voice on the other end. The voice on the other end asks for your name and account number. You supply that information and the data comes up on the customer service representative's screen. Together, you quickly work through the item in question and determine a problem is there. You are told it will be taken care of and the call is ended. Smooth one on one contact involving interaction with the data that is stored at some location using some hardware/software solution.
You log on to check your Charles Schwab brokerage account. In a few split seconds, your entire account information is facing you on your screen. Smooth web-based interaction with data stored at some location using some hardware/software solution.
As an IT employee of a mid-sized business, you are a customer of Dell Computer. You log on the Internet and buzz over to your corporate account to place an order for some new hardware needed for expansion in the company. You choose the solutions you need and an immediate response as to the availability, shipping date and complete order tracking of your products pops up on your screen. Just lilke that. Smooth customer/client web-based interaction that involved a connection of multiple sources of data to access the supply chain and was all done in a very short amount of time. That data is all stored at some location using some hardware/software solution.
What's the fix?
There are basically several 'fixes' for data storage/movement and this is where the boxing gloves come on, the egos emerge and the 'my bottleneck fix is better than your bottleneck fix, buddy' or 'my storage closet smokes your storage closet any day' starts to engage all of that passion, emotion and debate. In the meantime, the fat lady isn't going to sing for a while, so we have plenty of opera to watch and enjoy until she steps on stage and delivers the big number that brings down the curtain. It could very well be this isn't going to be a one soprano opera. What's more glorious than two or more large lunged Divas vocalizing to the tune of data storage and transport? We've got some good singing ahead folks. Who are the ladies?
�Fibre Channel (FC)
�Storage Area Network (SAN)
�Network Attached Storage (NAS)
�Internet Data Centers (IDC)
You could probably do well by buying a basket of the plumbing, picks and shovels of these five areas in data storage/movement and come back in five to ten years to see the basket overflowing with plenty of fruit. Could you? Probably. Check out this basket portfolio on the Fibre Channel Future board at Silicon Investor which was started on January 15, 1999. $10K was placed in each of the pick and shovel companies that were available at the time. As well, $10K was placed into each of the IPO's when they hit the Street after that date for companies that came along like Brocade, McData and others. There has only been one consolidation to date due to QLogic's purchase of Ancor. That accounts for why the portfolio shows $20K in QLogic. The return to date since January 19, 1999 is around 165%. Not bad for 17 stocks in aggregate! It certainly beats the QQQ which is up 77% and the Nasdaq which is up 55% as of 9/11/00 from the same time as the Fibre Channel pick and shovel portfolio was started.
If it were only that easy....... Do we have to watch the entire opera? I'm afraid we do. We cannot go back to January 15, 1999 or another date in time and pop $10K into the most promising 'singers'. Finish your coffee. Use the facilities. Sit down and get ready for the 'show'. We want to know who from the basket has the best breath control, can spin the best melody, can store the most data and who can move it like it's never been moved before. Fat Pipe, it's time to sing for your supper.
What's fibre channel?
It's one form of providing a Fat Pipe to the storage industry by relieving the bottleneck. In a nutshell, it's a technology networking standard or interconnect protocol (IP) that allows data to be transferred from one network node to another at high-speed and high-performance. It was developed in the early 90's to address the storage-to-server and server-to-server connectivity issues. It supports multiple protocols such as SCSI and IP as well as provides transmission reliability with guaranteed delivery and transmission distances up to 10 kilometers. That's 6.2137 miles for the metric challenged and 5.3961 nautical miles for all you 'skippers' out there in your boats. If you have ever visited any corporate campus sites in the world, you'll know that the distance of 6.2137 miles can satisfy a lot of Fat Pipe needs for these customers. FC complements and supports advancements in LAN and WAN technologies, such as gigabit Ethernet and ATM, which are not effective for large block data-intensive transfers. It fixes the bottleneck.
What's a storage area network?
Storage area networks (SANs) provide a way to 'fix' the capacity, performance and availability issues that IT professionals face in managing their storage systems. This is accomplished through SAN being a separate physical topology to storage making it an efficient way to manage the stored information via the consolidation of all storage systems on one central, administered network. In a basic architecture, SANs are more scalable than other models and they have the advantage of high transfer rates due to the gigabit speed of Fibre Channel connections making them faster than previous generation storage designs.
A SAN is a network of storage devices and servers that are distinct from the LAN (local area network). The SAN provides the ability to handle all demands that users request anywhere in the enterprise. SANs allow nearly unlimited storage configurations where any server can exchange data with any storage device - all while being managed from a central point. The bottleneck is removed from computer networks as SANs complement LANs and it all provides higher availability with less maintenance. Whether fiber optic cable or copper is used, these systems allow for up to 10 kilometers between campus-level storage with archive sites. SANs supply a 'fix' to both current and future storage challenges.
What's network attached storage?
Let's see now.......that wouldn't happen to be storage attached to a network, would it? A NAS system is a storage device that acts as a node on the network and swaps data with network applications via the LAN. It's an easy solution for information technology managers to add storage capacity to exisiting networks and set up a storage-centric environment. Run out of closet space? No problem. Add another closet. NAS gives reliable storage to small networks and workgroups all the while taking advantage of the existing network infrastructure. If you compare it to the old server-centric model, a NAS system actually improves the network and the server performance.
Network attached storage removes the file server component from the storage architecture. The NAS units are connected directly to the data transport network so the application servers and users can access the stored data files without having to go through a file server. Once again, the optimization process of I/O due to common file access protocol allows all systems running different operating systems to communicate with a NAS unit. By itself, NAS does nothing to solve the bandwidth problems placed on the data transmission network by storage backup and recovery operations simply due to the reality that they are still carried over the LAN. Now, we don't want to be creating bottleneck problems. NAS hits its stride dealing with files and alterations of those files, documents and applications that are transaction based. Believe me, there are plenty of markets that only need those capabilities. However, some of the other demands that could be placed on the bandwidth have the potential to create a bottleneck and slow things down to a crawl. Database and streaming video are two of the most thought of applications that would create a traffic jam and plenty of time to find a good station on the radio in the car to wait it out. As we move through the Fat Pipe series of posts, we will discuss in depth the Gigabit Ethernet space which will provide a bandwidth boost and bottleneck 'fix' for NAS that utilizes GE. Keep in mind that some versions of NAS acesses its disk arrays through Fibre Channel depending on the solution and the objective of the solution. Also keep in mind that a certain NAS players are certified to work with Oracle databases. These are the kind of potential Fat Ladies we want to take a look at for investment possibilities.
What's an Internet Data Center?
Good question. Would that be a center where data is stored for access via the Internet? Yes. Internet data will be stored here for land based as well as wireless based Internet data. We all have and use something called 'cache' on our computers. For example a disk cache is a portion of the computer's random-access memory (RAM) which is set aside to store frequently used information. It helps your programs work more quickly. Do a search on your hard drive for the word 'cache' and see what pops up. There will be plenty of cache items for oft used programs like Microsoft Internet Explorer and Netscape Communicator. Check out Mr. Motley's smiling face up there next to the motto of "Educate, Amuse, Enrich". We're nearing the 14,000 post point on Rat's Broadband Bandwagon. Where do you think little Mr. Motley is stored each time you access a post? What about loggin into your MyYahoo! page? Where's that little logo stored? I don't mean to oversimplify things here, but when our computers connect through the Internet to access images, data, music, video, etc... that data is stored in a variety of locations.
Enter the Internet Data Center. A climate controlled, electrically secure, fire proof, earthquake considered, video surveillance, motion sensor protected, must be up and running 24 X 7 data shelter that serves the needs of clients the world over. What does this have to do with the Fat Pipe Internet? A data center can help eliminate network and server bottlenecks throughout the Internet by moving the data closer to the end user using a mirroring of content solution. What the heck does that mean? If I'm going to access USA Today, The Motley Fool, Yahoo!, E*Trade, Amazon.com, AOL, Earthlink, eBay, Dell Computer, Cisco Systems, Quicken or any other e-business or content through my computer via the world's Internet infrastructure - you can bet that the data I am accessing is not stored in one place and one place only. No way.
What would happen if we all logged on together to access Amazon for the latest Harry Potter book which had the data residing on one server appliance? You think the rush hour traffic jam on that single lane highway to your work location at 7:45 AM is thick? How about if we all log in at E*Trade precisely at 10:43 AM on September 20th to buy 312 shares of Iomega (fat chance!). Do you think we are all hitting the same appliance located in the same location to conduct that trade? Internet service providers, web sites, backbone providers and large enterprises all use some version of an Internet Data Center. It's a custom designed garage to store in the most protective and secure manner the world's internet data. That's the niche. That's the game. That's the bag. That's the Fat Pipe "24 X 7 Protects Your Data 'R Us" chain of stores.
What are software solutions?
Would that be software that solves a broken problem that needs to be fixed? Bingo! Everything we've mentioned above involves the use of software in data storage and transport solutions. This is a large area that involves data security, recovery, back up, delivery, maintenance, transactions and digital certifcates. Rather than focus on all of the individual games and solutions within this subsector of the data area picks, tools and shovels space - I would rather spend more time on the Fat Pipe hardware/software combinations in the FC, SAN and NAS markets. I won't ignore this space and will mention some of the singing ladies, but it really remains outside of my field of study and research to date.
No coffee here for me. I opted for a Diet Coke�. Why? The coffee has been on the warmer for a few hours I didn't like the odor that was emanating from the pot. No need to stain the teeth any more with a cup of what is now Viennese tar. So, I'll stain it with Coca-Cola Light� (that's what Coke� calls Diet Coke� on this side of the pond). Coke Light� is stored in a .5 liter container here in Europe. That's 16.907 fluid ounces for the metric challenged. Hey, it tastes just as bad here as it does there. <ggg> Who would have thought that investment money we set aside back in 1904 for our Wall Street frocked goon to put into Coke when it went public would have us sipping on a Cola Light� in September of 2000? The goon is probably still laughing at me. Ah, let him laugh...
Who are the players? Who are the singing ladies with the Fat Pipes?
Let's gloss over each individual sector and simply list some of the players. You can find links to some excellent posts and discussions at various sites.
Here's one place to start looking:
After that, I've listed just a few links to various DD done by many fine posters and investors on some of the companies. There are many others on each individual board of the company and I highly suggest searching for the top 25 or so posts in the past year of each company to get up to snuff as you start your study of some of these promising Fat Pipe singers.
*I've gone ahead and put an asterisk beside some of the more proficient singers that I have found to be worthy of more research and study for a Fat Pipe portfolio.
Fibre Channel (FC)
A good start of covering this space began back in 1997 and the original post was updated over the years as the 'game' unfolded and developed. This is near the beginning of covering the space:
Players in the various three topographies of fibre channel include, but are not limited to:
*Brocade Communications (http://boards.fool.com/Message.asp?mid=13186559)
Storage Area Network (SAN)
The main champions of SANs are, but certainly not limited to:
Network Attached Storage (NAS)
The main players include, but are not limited to:
*Network Appliance (http://boards.fool.com/Message.asp?mid=12421158)
EMC vs. NTAP post (http://boards.fool.com/Message.asp?mid=12175483)
Internet Data Centers (IDC)
The main players are, but are not limited to:
Who supplies the picks, tools and shovels to the IDC's? You guessed it. All of our Fat Pipe friends.
The main players are, but are not limited to:
Step back, take a deep breath and try to remember what we just 'ran' through in this Fat Pipe #3 post. Fibre Channel, Storage Area Networks, Network Attached Storage, Interet Data Center and Software. I'm drawn to the real picks, shovels and tools in the first three areas because we have some IPR and disruptive technology issues that have the potential to strengthen one's investment position while investing in the space. That doesn't mean that the IDC space and the software space is not ripe for investment. It does have excellent potential, but I personally lilke the potential of the other spaces better because of the criteria I use for investment choice. Those of you that know me from the gorilla gaming angle understand this. As with Fat Pipe #'s 1 and 2 - there are no secrets here. Most all of us know of Brocade, Network Appliance, EMC, Sun, Intel, Exodus and many others. Many of us know of the strong financial balance sheets of Brocade, Network Appliance, EMC, Intel, etc... . These companies are making money and they are making it well. Nothing like a tremendous growth area of the next generation network bigger picture to help out in that category. These companies are growing and they are executing well. There are high premiums for ownership in these companies. The same is true for Fat Pipe #1 and Fat Pipe #2 companies. You will find the same premiums when we move into Fat Pipe #4 and Fat Pipe #5 companies.
I would love to say what I've said on other boards before. Tuck some shares of the leading candidates in your pocket and check back in a decade. If it were only that easy.... Brocade, EMC and Network Appliance are all top holdings of this household. I will be owning shares of McData in the future as EMC shareholders will receive the spun off shares. I also own shares of some of the other companies for various reasons, however the three I mention seem to be the Fat Pipes with the golden throats fighting to sing the final aria at the end of the show. Do not blindly follow any choice or decision I or others have made. However, do take the time to understand how important data storage and transport is in the infrastructure of the intranet and the internet.
In the distant future, there are thoughts of Infiniband which has recently been pushed back to what looks like a 4 to 5 year time frame from now. There are also technical discussions and arguments taking place about other possible technologies entering the solution fold. As it stands today - SAN, NAS and the use of Fibre Channel are where investors should focus. I happen to believe they are all going to exist into the future. They actually complement each other. You need to study the alliances and partnerships between the players. One needs to study the standards of NAS and FC in terms of software. It's a real game going on because of this. We want the leaders like Brocade and Network Appliance to be on our list to study, research and understand as possible investments. Likewise, EMC has been the "King" of data storage for many years. Study the NTAP vs. EMC NAS space closely. Network Appliance has the type of disruptive technology that has many investors and gorilla gamers singing the phrase "we will, we will Rule you!". One thing is for sure. Growth is in the tornado. The hypergrowth phase. The breeding of data continues to take place and demand solutions to store it and move it.
As I quoted in Fat Pipe #1 and Fat Pipe #2, here are the comments of Paul Johnson, co-author of The Gorilla Game in terms of Fibre Channel companies:
Internetstocks.com: You also track storage-area network companies like Brocade Communications (BRCD $190). Is this a parallel phenomenon to the broadband buildout? You're expecting excellent profit growth for this company going forward.
Johnson: We see it as bringing the Next Generation Network architecture to storage. Fibre channel is the key enabling technology, bringing broadband scalable infrastructure to the task. There's a bit of a rallying around other types of technology to usurp this opportunity but we think that when these competing technologies are established, it's highly likely that fibre channel will be a de facto standard. Brocade's position in the systems side is very impressive, something like 80% share.
In host adapters, the players are Emulex (EMLX $47-9/16), QLogic (QLGC $71-3/8) and JNI (JNIC $41-3/4). These go into the servers that connect to the SAN. We expect market share to remain relatively stable so we think investors should stick to a balanced portfolio among the three.
With that, this Fat Pipe #3 post now draws to an end. I hope that others join in and contribute thoughts and point out elements of the various games going on in this vast space. As with my previous two posts, this is simply meant as a launching pad to perk the interest of study to see if we can come up with some leading candidates for possible investment. Study the links to other boards and engage in discussion with investors that know many of the aspects of each company and the technologies those companies control.
I have to prepare to get back to planning for my real life 'storage situation' with my wife in tonight's pow-wow of home design and arguing - I mean discussing. Due to the time line of finishing our research/study for the plot of land and arranging the meetings with key players before September 30th, I cannot guarantee Fat Pipe #4 or Fat Pipe #5 is going to hit on any selected date. I will begin work on them ASAP within reason. I will be Mr. Mom for 10 days while my wife meets with all of the architects and builders in the states. On top of that, I've got rehearsals and performances to deal with between parenting and shuttling the babysitter back and forth.
Previous Fat Pipe series posts:
Original Post that provided the seed from Xiphias on 8/23/00:
My response - RE: Top 5 in Broadband to Xiphias
Pevey's "Strike Up the Band" Post:
Response to the "Do ya wanna play?" question:
Fat Pipe Plan of Action:
Fat Pipe Game #1 - core
Fat Pipe #1 - Core*
Fat Pipe #2 - Edge*
Fat Pipe #3 - Data Storage/Movement*
Fat Pipe #4 - Fiber
Fat Pipe #5 - Optical
The +1 portion will be skipped in this series - Software
*Denotes already posted
Read More Posts by This Author
Go To This Post
More Recommended Posts