Silicom Makes Its Quantum Leap

WAN Optimization appliance means tools that compress information streams and regulate information traffic flow on networks. Such tools can be found in remote data centers and large offices where faults and delays could occur, and this is a growing niche that is suited to small companies with a lot of technological know-how and hands-on experience.

Silicom Ltd. (Nasdaq: SILC) is one such company, and its specialty is the bypass switch technology that it has been developing in recent years. The bypass automatically regulates information flow before it can be interrupted by a fault, in the same manner as a bypass in heart surgery.

In recent years Silicom has installed switches like these at many companies, but the big breakthrough came on Monday with the company's announcement that one of the leading communications infrastructure companies, probably Cisco Systems Inc. (Nasdaq: CSCO), is to purchase switches worth $1.2 million. After a string of nominal sales, the company has now made the quantum leap, or as the man who brought Silicom back to life, president and CEO Shaike Orbach, puts it, "the potential in this niche is explosive."

As one who took note of this manager as soon he as took up his post, I have to say that the company has a leading product in a booming niche, and a talented manager at the helm. And just think that not one analyst has bothered to cover Silicom since it was traded at $0.20. That's the real problem with the analysts.

Published originally by Globes [online], Israel business news - www.globes.co.il
© Copyright of Globes Publisher Itonut (1983) Ltd. 2006. Republished on Seeking Alpha with full permission.

Comments

[ThomasGarrity]

It is always nice to drop name recognition. My question is what conviction do you have that the recent deal for 1.3 mil was with Cisco?