Monday July 26 10:46 AM ET
IBM Takes On EMC With New Storage Systems
By Eric Auchard
NEW YORK (Reuters) - IBM Corp. Monday said it is introducing a new generation of high-volume data storage systems as part of a bid to recapture momentum
from EMC Corp. (NYSE:EMC - news), the dominant storage systems provider -- in a business IBM pioneered decades ago.
IBM said the new Enterprise Storage Server (ESS) -- code-named ''Shark'' -- is designed to provide large organizations a means of handling their exploding data
storage requirements which are being fueled by spiraling Internet use.
IBM said the new product line can handle from 420 gigabytes, or billions of bytes of data, up to 11 terabytes, or trillions of bytes, the highest capacity in the industry.
The new storage systems, together with a refreshed line of storage tape backup products, help some of the world's largest organizations record and track the
massive volumes of information they create daily.
IBM said the Enterprise Storage Server is designed to grow with customer requirements and to incorporate the latest storage innovations with a modular, ''snap-in''
design that allows users to add additional storage capacity over time.
Ron Kilpatrick, IBM Storage Systems Division general manager, said, ''With the Enterprise Storage Server, IBM is delivering a clear vision and technology road
map that customers can count on as they continue to implement data-intensive applications.''
The products compete with those of EMC, in recent years the leader in developing so-called ''open'' storage systems that are designed to work with all major
computer systems. EMC owns a 35 percent share of the market, while IBM has around 20 percent.
Most corporate data storage systems are built by computer makers to work mainly with their own computer systems, IBM's new product included.
Hewlett-Packard Co. (NYSE:HWP - news) and Sun Microsystems Inc. (Nasdaq:SUNW - news), for example, also offer specialized storage systems to work with
their own machines.
But IBM's new storage products can work with computers and high-speed network delivery systems across IBM's product line-up, including mainframe,
workstation, minicomputer and PC servers that manage networks of other computers.
Rivals have been quick to attack the new IBM storage line. EMC has said that IBM's products remain focused on providing storage for IBM-based computers,
rather than working across a range of rival computer systems, as EMC's products do.
''They are going to go out and eat their own children,'' Bob Dutkowsky, EMC executive vice president of markets and channels, said last week during a conference
call with analysts following his company's quarterly earnings report.
He was referring to how the new ''Shark'' products could cannibalize IBM's existing storage products business.
In introducing the new products, IBM is once again competing against its technical partner of recent years, Storage Technology Corp. (NYSE:STK - news) ''Unlike
'Jaws,' we knew this was coming,'' a StorageTek spokesman said Monday.
In response, StorageTek introduced a campaign to encourage its 6,000 customers who use IBM and StorageTek products in creating instant ''snapshots'' of
computer data to stick with StorageTek, which will continue to support these existing products while IBM prods customers to adopt its ''Shark'' storage designs.
With the introduction of the Enterprise Storage Server, IBM said it is reasserting its position as the most comprehensive and innovative supplier of storage solutions
in the industry.
IBM, which invented computer disk storage in the 1950s, was behind many of the innovations in data storage since then, as the computer maker sought more
efficient methods for handling the vast amount of customer data stored on IBM mainframes.
To stoke support for the new products, IBM said Monday it is also announcing a worldwide deferred payment program for 1999 from IBM's Global Financing unit
for qualified customers who finance their installation of Enterprise Storage Servers.
The offer gives customers a payment deferral until at least Jan. 1, 2000, so they can install and use the new storage technology without affecting their 1999 budgets.
In early trading Monday, shares of IBM sank $1.50 to $123.25, while EMC traded $2 lower at $59.75 and StorageTek drooped $1.44 to $21.69, all on the New
York Stock Exchange. |
