Network Engines (NENG) Expands Partnership with Microsoft
Posted on January 23, 2007
Back in August 2006, we alerted subscribers to the potential of an expanded Network Engines/Microsoft partnership, following Microsoft’s acquisition of Whale Communications. Today, much to our delight, but not surprise, Network Engines (NENG), released an important PR that actually details an expanded business partnership between the two companies.
According to Microsoft:
“Our expanded relationship with Network Engines ensures that our current IAG customer base will have solid support and service as well as a resource for purchasing and upgrading the IAG-based solutions,” said Mike Schutz, group product manager of the security and access products group for Microsoft. “Network Engines has an established track record of providing appliance solutions and support for Microsoft applications, that when coupled with their advanced manufacturing facilities, Network Engines emerges as a strong choice to support current and future IAG customers.”
We view this news as extremely positive for NENG and we hope to get further clarity on the exact financial impact of this deal when NENG announces quarterly earnings on February 1st. Nevertheless, given NENG’s still depressed valuation, we would still expect the stock to react very favorably to this important new strategic partnership with Microsoft, especially since it provides further evidence on how Network Engine’s (NENG) is slowly, but successfully, growing the Non-EMC business. As we have stated in the past, NENG’s stock should receive a valuation in line with industry-wide multiples, once investors feel comfortable that the company has a more diversified revenue stream. We expect that throughout 2007, the company will establish this broader, and profitable, revenue stream.
Please Note: We first recommended Network Engines (NENG) at $1.88, and still hold a position in the stock. All ideas, opinions, and/or forecasts, expressed or implied herein, are for informational purposes only and should not be construed as a recommendation to invest, trade, and/or speculate in the markets. Any investments, trades, and/or speculations made in light of the ideas, opinions, and/or forecasts, expressed or implied herein, are committed at your own risk, financial or otherwise.
Subscribe for FREE
RSS Feeds:
Disclaimer:
This site may include market analysis and we may own shares in the stocks mentioned in our reports. All ideas, opinions, and/or forecasts, expressed or implied herein, are for informational purposes only and should not be construed as a recommendation to invest, trade, and/or speculate in the markets. Any investments, trades, and/or speculations made in light of the ideas, opinions, and/or forecasts, expressed or implied herein, are committed at your own risk, financial or otherwise.
Comments
Leave a Comment
If you would like to make a comment, please fill out the form below. Please note that we only require an email for editing purposes. We will NEVER publish your email or use it in any way.