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SAN FRANCISCO -- Never go out of your way to pick a fight with the schoolyard bully. That seems to be



approach to its new competitor,


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Last Thursday, Intel said its data centers would be the key to the chip giant's new Internet strategy. Concern about Exodus having to compete with Intel had pushed EXDS down nearly 20% by the time of the company's presentation Wednesday.

Money managers were hoping that Exodus CEO Ellen Hancock would address the Intel issue here at the

Hambrecht & Quist Technology Conference

. But Hancock disappointed. Neither she nor CFO Dick Stoltz's mentioned the I-issue.

Still, Exodus made a compelling presentation to investors. The company -- which offers Internet connectivity, server hosting and a range of managed services such as security and monitoring -- has achieved 10 straight quarters of sequential revenue growth of at least 40%. And the outsourcing model only seems to be picking up more steam as companies realize that it's six times cheaper than doing it in-house.

By year's end, revenue from managed services will exceed the company's target of 20% of total revenues, says Hancock. And Exodus plans to focus even more on customer service, with Hancock estimating that 60% of its 1,000 employees will be working to satisfy the demands of its more than 1,000 customers.

Observers aren't freaking out over the Intel threat. Exodus rebounded 6.8% to 96 in the two hours following the presentation. One networking company executive who attended said he's "skeptical" about Intel's chances in Exodus' market.

"It's not core business," said the executive, who asked not to be named. "They're not a service company. And if it's not their core, it's going to be tough." The main reason he wanted to hide his identity: Intel is an investor in his company.

-- Spencer E. Ante

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Dialogic Broadens Scope



, which built its business selling software that handles voice messages for corporations, is moving into new markets.

CEO Howard Bubb said at the H&Q conference that the market has been "saturated," and now his company is broadening into software that unifies voicemail, fax services and other messaging systems on a single computer server.

-- Kevin Petrie

RF Micro's Sudden Emergence

David Norbury exudes confidence. And no wonder, since the stock of

RF Micro Devices


, the chip company he heads, has risen nearly 600% since Oct. 8. RF Micro has

a lock on the market for power amplifiers, a device that increases the life of a cell-phone battery. Its amps go into all


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Here's a company that until last summer was sleepy and small. In September it opened a new manufacturing plant, helping it to address huge demand from the booming cell-phone market. New orders helped push revenues for the fourth quarter ended March 31 to $56.5 million, more than the $45.4 million the company generated for all of fiscal 1998.

Demand is so strong, Norbury said, that the new manufacturing plant wasn't expected to reach full capacity of 30,000 silicon wafers a year until next year, but he now knows that 30,000 won't cut it. The company is already moving some equipment out of the plant to create more manufacturing space and produce 20,000 more wafers a year.

Meanwhile, costs are coming down and profits are going up, said CFO Dean Priddy. Margins improved by 7 points over the last two quarters to 37.9%. "The outlook for further margin expansion is very good," he said.

The only dark cloud on the horizon is the emergence of a



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, which recently spun off of

Rockwell International

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Norbury said he didn't see Conexant much when it was under Rockwell's wings, but he expects the new spinoff to be more limber. "We expect them to be a strong competitor," he said.

-- Marcy Burstiner