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Dot Hill Systems Corp. Message Board

  • noambenhaim1 noambenhaim1 Mar 9, 2011 9:45 PM Flag

    NetApp buys Engenio - $480M

    Engenio has been generating $750M a year in revenue for LSI. NetApp must know something, yes?

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    • NetApp management wanted to buy some revenues to make their topline look better.
      LSI wanted to divest itself of a delcining revenue and margin, commodity type business.
      LSI's Engenio business is better than Hill's business, so Engenio deserves a higher multiple than HILL. Considering that Hill's annual revenues will decline, due to lack of NetApp business, I believe reasonable market cap for HILL is about $1.50 per share.

      • 1 Reply to becarefulwhatyoupay
      • Your comments clearly show that you know very LITTLE about storage. Engenio sells commodity hardware and has NO software. They have much less gross margin than Hill and Engenio has NOT won a new partner in over 3 yers. Plus IBM is moving away from Engenio (all in the storage industry know this) and this would cut the Engenio revs by about 60%.

        So Hill's Margins increasing, Sales (even without the ntap revs) are increasing, lots more software business, increasing channel business, and have won over 100 new partners in the last 1 year. THAT IS WHY HILL REVS ARE UP EVEN AFTER THEY DECIDED TO WALK AWAY FROM $20M PER Q NTAP (LOW MARGINS) BUSINESS. SO REVS INCREASING BIG TIME AT THE CURRENT AND NEW PARTNERS.

        ORACLE, CISCO, BROCADE, QLOGIC, EMULEX, AMAZON, DELL, HP,..... many have lots of interest in Hill's Heterogen Storage Virtualization/CLOUD and Managemnt ****SOFTWARE****. Similar to what VMware has and does - but for Storage !!! Watch and learn junior as Hill moves to over $5 in the coming months or bought out at the $7 range.

    • My mistake. The 2010 revenue generated from the external storage business sold to NetApp was $705M. This according to the 8-K released by LSI. Here is a link to the 8-K:

      http://sec.gov/Archives/edgar/data/703360/000070336011000009/exhibit99-1.htm

      It will be interesting to here what Dot Hill has to say about this sale during the analyst presentation today.

    • So what could that mean for HILL? If Oracle and IBM were buyers of Engenio products, are they going to buy from the competition NTAP? Is Engenio loosing a customer that prompted the sale? Who is left out there besides HILL and XTRX? Is HILL going to be scooped up?

      I don't know the answers. Anyone?

 
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