Sun Microsystems Inc.
, facing slowing growth in its core server market, is
turning itself into a data storage shop, a senior executive
said on Friday, confronting skepticism that the network
computer maker could successfully shift into a new area.
Denise Shiffman, vice president of storage marketing, said
in an interview that the company was having some success with
its T3 storage system, which has been out for less than a year.
"We are winning a lot of big deals," she said. "It is an
extremely profitable, fast growing product line for Sun."
Sun has been one of the fastest growing companies in
America in recent years, cashing in on the drive by companies
to network their companies and hook up to the Internet, but the
demise of the high-flying dot-com sector and corporate caution
on spending due to the U.S. economy have hit demand for
servers.
Once a second thought, storage has become the new hope for
fat profits in the technology sector as the corporate world
invests in equipment to keep tabs on every customer and partner
and spur growth by moving business and management to the Web.
While there's plenty of skepticism that Sun can challenge
storage leader EMC Corp. , Shiffman says Sun learned to
play a new game in the early 1990s, when it switched from
powerful workstation desktops to Internet-building servers and
championed its message: The Network is the Computer.
"I was here when we were a work station vendor and we had
to change to a server vendor," Shiffman said. "We are doing
that again around storage, and we've been doing it for a while.
"It (the T3) is a core element of our strategy and vision
of open storage networks that are modular, highly scalable and
highly managed."
SUN A TARGET OF COMPETITORS
Sun traditionally sold storage to its server customers, and
the easy pickings has helped make it a target of competitors.
About half of Sun's storage sales are disks attached to
computers, but such systems can create network bottlenecks as
the central server computer with unique access to data does
double duty sending information and keeping the network
humming.
Many say the solution is to hand over storage management
duties to purpose-built machines or storage networks, an
elegant response which turns out to be a technical challenge.
Critics say Sun doesn't get it yet.
"They (at Sun) think of storage as a peripheral," Dan
Warmenhoven, the chief executive of Network Appliance Inc.
, which makes stand-alone products, said recently.
Merrill Lynch financial analyst Thomas Kraemer said Sun's
T3 was not good enough. "We continue to like Sun's server
position, but storage matters more," he said in a Feb. 21
report. "The increasing demand for storage, and Sun's weakness
in this area, is really coming back to bite them now."
But Sun's share of global storage sales grew last year to
10.4 percent of the market from 8.7 percent and the T3 has been
purchased for use with non-Sun servers, Shiffman responded,
declining to give T3 sales figures or examples of wins.
Customers want "one throat to choke" when they have a
problem to fix, she says, and Sun can provide that without
taking over the entire computer center.
Systems specialists rather than storage specialists can
link all the equipment behind a particular program, she said.
"We are not trying to say that customer environments are
going to be homogenous, because they are not," she said.
But if a single database or program runs on a system that
is all from one vendor -- for example Sun -- theoretically it
is all bound to work together. "They need to know end to end
that thing is going to work, and when it doesn't they want to
make one phone call," she said.
Sun also works with a service companies that resell Sun
products to users, who can also become the "throat", she said.
Much of the value, and profits, in storage has moved to
software which manages these information beasts, and Sun
appears to be heading for the throat of top storage software
vendor Veritas Software Corp. .
"Sun's been trying to engineer Veritas out," Gary Bloom,
chief executive at Veritas said at an investment conference
recently.
In particular, Sun has bought two data management software
companies in the last half year, LSC Inc. and HighGround
Systems, Inc., although Bloom said they were not enough: "I
just don't think it is going to help them."
Sun competes and cooperates with Veritas in various areas
now, and Shiffman said Sun wanted to continue the relationship.
But she also envisions stand-alone Sun storage management
software that could run on non-Sun systems.
"This is a software revenue business," she said.
((Peter Henderson, San Francisco Bureau 415 677-2578
peter.henderson@reuters.com))
(Reuters 08:57 PM ET 03/16/2001) |
