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THE DAY AHEAD: Infrastructure IPO smorgasbord on deck

The market just can't get enough of those Internet infrastructure IPOs, but investors could be feeling bloated after the latest IPO action.

On deck today: Vixel (Nasdaq: VIXL), priced at $18, and Daleen Technologies (Nasdaq: DALN), priced at $12.

In addition, Williams Communications (NYSE: WCG) priced a whopping 29.6 million shares Thursday at $23, the top of its projected price range. Williams is a fiber optic communications company similar to Qwest Communications (Nasdaq: QWST) and Level 3 (Nasdaq: LVLT).

Calico Commerce (Nasdaq: CLIC), which has been put off again, is expected to price Monday night for trading Tuesday.

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No .coms for these Internet building block companies. Calico, which we highlighted earlier this week, is an e-customer software vendor. Vixel makes fibre channel products for storage area networks (SANs). How will Vixel do? Just look at the returns of similar companies such as Brocade Communications (Nasdaq: BRCD), up more than 1,000 percent from its May offering price of $19. Vixel also upped its price range to $14 to $16 from $10 to $12 Thursday.

Daleen creates billing software and is similar to Portal Software (Nasdaq: PRSF), no slouch in the IPO aftermarket.

Given the rush of infrastructure companies going public, you have to wonder when this bubble will burst. It isn't happening yet -- just look at the gains Foundry Networks (Nasdaq: FDRY) had this week. But there could be a .com-like backlash as all these companies begin to look alike. Ever notice how the market tends to forget a lot of these infrastructure companies will bump heads with Cisco Systems (Nasdaq: CSCO) at some point?

"The risk here is that the markets begin to view more and more of these as stocks that are no different," said David Menlow, analyst with the IPO Financial Network.

Until then, however, the market will go gaga over infrastructure firms.

Here's a look at today's lineup in order of our guesstimate of market reaction:

1. Vixel is offering 3.7 million shares and hoping for Brocade-like returns. The offering priced at $18 above its upwardly revised range of $14 to $16. In regulatory filings, Vixel boasts it is a leading provider of SANs based on revenue and number of ports shipped. The company competes with Brocade, Gadzoox Networks (Nasdaq: ZOOX) and Emulex Corp. (Nasdaq: EMLX).

According to International Data Corporation report, worldwide sales for SAN products should grow from $2.5 billion in 1998 to over $13.3 billion in 2002.

For the fiscal year ending Jan. 3, the company reported sales of $39.4 million and a loss of $21 million. For the six months ending July 4, Vixel had sales of $22 million and a loss of $9.8 million.

But there are a few problems. Vixel disclosed that one of its components has a high failure rate, which doesn't bode well for customer satisfaction. Vixel said Sun Microsystems cut back on purchases of the component, but company smoothed things over by issuing Sun 150,000 shares. For the fiscal year, Sun represented 54.4 percent of Vixel's sales and for the six months ending July 4 Sun accounted for 34 percent of sales.

2. Daleen Technologies, which makes billing software, is offering 4.1 million shares. The offering priced at $12, the top of its range. Revenue for Daleen is a bit light, but growing quickly.

For 1998, the company had sales of $5.2 million and a loss of $12.1 million. For the six months ending June 30, the company had sales of $7.1 million and a loss of $4.5 million.

The company sees losses" for at least the next several quarters." The company also has a limited history as a software company. Before 1996, Daleen was primarily a consulting firm.

Five customers accounted for 99 percent of Daleen's revenue in 1998 and 64 percent for the first six months of 1999.

3. Williams Communications, which is building its massive fiber optic network, has analysts bullish on the long-term prospects and the it comes from a strong parent company. So why is it third? For starters, Williams is offering more than 29 million shares. There's plenty of supply to limit a first day run. Over the long haul, however, Williams may be the best of the bunch. Qwest and Level 3 certainly have done just fine on the public markets.

4. Calico Commerce: This will be quick since we told you about Calico earlier this week. It's got big backers, an impressive customer list and good revenue growth. It also bumped up its price range to $16 to $18 from $12 to $14 for Friday's debut. Primary competition includes Broadvision (Nasdaq: BVSN) among others.

One caveat: Calico's offering has been put off every day this week.