Informationweek article on IBM Storage Sales (January 24th issue):
Businesses Profit From Competition In Storage Market
New IBM storage system gives companies a bargaining chip in search for best deals
By Martin J. Garvey
Family Dollar Stores Inc., the latest customer for IBM's new Enterprise Storage Server, is taking advantage of the trend. The product is IBM's first to house data from mainframes, Unix servers, and Windows NT systems, a capability long provided by leading independent storage vendor EMC Corp. but few others. For Family Dollar--which needed to replace four aging EMC Symmetrix systems in support of its mainframes--performance, service, and price were top priorities. When the decision came down to EMC's Symmetrix system and IBM's Enterprise Storage Server, both vendors were willing to raise the stakes to get the account.
Allan Davis, director of technical support at the Charlotte, N.C., retailer, says that when he informed EMC its bid came in at four times the price submitted by IBM, EMC offered to cut its proposed price in half and boost its warranty to four years. IBM had been offering only a three-year warranty, but said it would match EMC's four-year offer. "Once IBM said OK to four years, we were done," says Davis.
IBM will aggressively target businesses with a focus on tailored storage, software, and services offerings, says Linda Sanford, who this month was named general manager of IBM's storage subsystem division, now part of the enterprise systems group. Sanford says that IBM's Global Services and Software groups, as well as each of its server divisions, will work closely with her group to implement storage architectures that meet customers' specific needs. "We're marshaling our resources to go after the market," she says. Most recently, Sanford oversaw relationships with large IBM customers transforming themselves into E-businesses.
IBM is poised to compete both on price and technical innovation in storage, Sanford says. "Competitive architectures are 10 years old," she says. "Ours is modular and able to change quickly in response to the market."
Analysts say IBM's presence is making it easier for users to bargain for the best storage deals. But Steve Duplessie, a senior analyst with the Enterprise Storage Group, says IBM's new offering has some shortcomings compared with Symmetrix, particularly in its support for NT and Sun Solaris servers. He says IBM is almost giving away its system in some instances to gain market share, and he expects the vendor to raise its prices as it upgrades Enterprise Storage Server and establishes a presence at the high end.
For now, Duplessie says, EMC still has the edge in terms of quickly getting storage systems up and running across multiple server platforms, because it's been doing that for years. "Customers are under the gun today and don't have time for implementation hassles," he says. "Only EMC can walk in and install a 10-terabyte system in two weeks."
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