Isilon® Systems the leader (don't you love that - "leader") in clustered storage, today announced preliminary results for the third quarter of 2007 ended September 30, 2007. Based on preliminary estimates, total revenue is expected to be in the range of $23.2 million to $23.7 million, down approximately 6 percent to 8 percent sequentially... the company stated it expected total revenue in the range of $25 million to $27.5 million for the third quarter.

BBND expects revenues to be in the range of $35-$39m vs. expectations of $56m. The company gave a list of excuses for the miss (obviously you can enjoy reading the list in the release).

The chart I have produced below shows the "old guard" companies trending even further in this direction, 15 months after my original post, with service revenue growth significantly outpacing product revenue growth.

There have been plenty of naysayers out there blabbering about how a majority of NETL revenues are dervied from CSCO and how that is a bad thing. I agree there are risks when you have a large portion of revenue from one customer -- think of PortalPlayer (PLAY). What I disagree with is the premise that NETL lives or dies with CSCO. NETL delivered a staggering 50% growth sequentially from customers other than CSCO. The company was also able to deliver strong gross margins even after giving CSCO some price discounts.

The reason CSCO sticks with NETL is not because there is a inside connection; CSCO is as entrepreneurial as they come and the reason CSCO is sticking with NETL is because NETL has superior products at price points that make them the only choice. Yeah, one day Integrated Device Technology (IDTI) will be able to get few more sockets with its IBM-bought products, but that day NETL will be on the next chapter -- like the partnership with AMD or Broadcom (BRCM). And we know CSCO keeps trying to make these chips in-house, so there is always risk.

Mike wants Nortel to exit every business where it holds less than 20% market share. In telecom that is a tough task, which most likely will lead to Nortel exiting a bunch of businesses. By some estimates, 65% of Nortel revenues come from businesses where Nortel has less than 20% market share.

Like I said few days back, I would stay away from EXTR. The company has been in internal ups and downs, and from what I can gather it is not smooth sailing yet. I believe the weakness in U.S. and Japan was due to these internal issues -- not due to any broad market weakness.

The money call from one of Wall St. Finest -- Stanley Kovler -- was made on Friday; he published that he expects company to miss due to sales team transition in U.S -- exactly the same reason given by RDWR in its press release. Was Stanley typing the press release for the company? Whatever his source was, he made a slam dunk call and his clients made (or saved) money because of it.

This could be the last nail in coffin for the non-QCOM CDMA chipset consortium. NOK will most probably end up utilizing QCOM parts, as is the case with Sanyo currently. What it means that the Royalty King -- aka QCOM -- will continue its reign over CDMA profilieration, making nice healthy margins on every CDMA handset sold in the world.

The board does not plan to do anything specific for the ordinary shareholders except for "maximizing shareholder value" by attaining the highest possible value in a change of control. Which for a lot of shareholders will mean a fraction of what they paid to become proud owners of the company.

The really interesting educational lesson coming out of this pre-announcement was the importance of leverage. BCSI had originally guided to $38.2 million to $39.3 million in revenues and EPS between $0.32 and $0.36. Company now expects revenues in the range of $34.5 million to $35.1 million and EPS between $0.15 and $0.19. With a mere $4 million miss on the top line the company expects EPS to be cut in HALF!

From what I can gather it seems as though the quarter did have a decent close, as decent as you can get in January given that most customers are not running to order a bunch of stuff early in the year. I do not think the quarter was off the charts for all product groups, but selective groups did have a good showing. The area to focus on remains the advanced technologies group, as this is where growth should come from longer-term.

F5 Networks (FFIV), a competitor of Redline, saw its traffic management business grow 13% in the December quarter. The security business had the most dismal quarter since acquisition in what was the strongest quarter historically for NSCN. Clearly, there is a serious flaw in Juniper's strategy when it comes to playing in the enterprise market. These acquisitions have resulted in a bloated operating structure on top of the additional heads hired for the "J-Series" platform. With all the additional operating expenses and missing revenue contribution, the operating leverage has disappeared.

Yesterday EXTR reported revenues that missed its own guidance. EXTR has been struggling to attain revenues above the $100M/qtr mark- same issue that bogged its competitor FDRY for sometime.

But does this signal that tech (or INTC) is not a growth story any more? Most probably. Cisco (ticker: CSCO) also recently announced that its SFA acquisition will be partly paid for by debt. Seems like large tech bellwethers are becoming more involved in debt- clearly a sign of changing times. All this debt issuing does signal that the notion of no debt, no dividends, no cyclicality for tech is now old.

If EMEA is better than expected given the rise in USD then its all upside for tech. Overall, TECD makes me comfortable that most of tech out there is doing well and end market demand is steady -- at least from corporations and small businesses.