Cisco using VRTS software in its storage networks:
By Ben Klayman
CHICAGO, Jan 7 (Reuters) - International Business Machines
Corp. (NYSE:IBM) will sell data storage switches just introduced
by Cisco Systems Inc. (NASDAQ:CSCO) in a move to strengthen its
product lineup in a rapidly growing market, the companies said
on Tuesday.
IBM, a computer services, hardware and software company,
said the multiyear deal is nonexclusive, allowing it to
continue selling storage networking switches made by Cisco's
established rivals, Brocade Communications Systems Inc.
(NASDAQ:BRCD), McData Corp. (NASDAQ:MCDT) and Inrange Technologies Corp.
(NASDAQ:INRG).
"We think Cisco will be a significant entrant and
competitor in this area," Roland Hagan, vice president of
marketing for IBM Storage Group, told Reuters in a telephone
interview. "Our strategy in this space has been to partner with
leading companies as part of our portfolio to deliver total,
integrated solutions, from disk arrays to storage networking to
servers."
Financial terms and volume requirements of the deal were
not disclosed, but IBM said it expects to begin selling the
first Cisco storage switches by the end of March. Cisco, which
can use other resellers, said the storage network switches
became available for customer testing last month.
Storage networking switches route information, allowing
companies to access data from different servers and locations
in their storage networks.
Cisco has said that within two to three years it wants to
be one of the two largest players in a market Gartner expects
to grow from about $1.2 billion last year to $4.3 billion in
2006. In 2001, Brocade had the biggest market share at 59
percent, followed by McData at 29 percent, according to
Gartner.
CISCO A SERIOUS RIVAL
"They're serious," Gartner analyst James Opfer said of
Cisco's efforts. "Their product offering is good. I don't think
that they're up against any huge resistance."
He pointed to Cisco's $21 billion cash pile, strong sales
force and large presence with big corporate customers as
advantages. Opfer expects such companies as EMC Corp. (NYSE:EMC)
and Hewlett-Packard Co. (NYSE:HPQ) to follow IBM in selling
Cisco's storage networking products.
Based in San Jose, California, Cisco said last October it
would probably partner with Veritas Software Corp. (NASDAQ:VRTS) and
two or three other companies on data storage software.
Cisco entered the storage switch market last August when it
announced it would buy privately held start-up Andiamo Systems.
Cisco said then that the deal would not close until July 2004
at the latest as it waited to see how Andiamo's products sold.
Cisco also said then that the price could be as much as
$2.5 billion, based on product sales and Cisco's stock price,
but that would not be determined until the deal closed. One
analyst valued the deal at between $300 million and $1
billion.
IBM, which sells Cisco routers, switches and other
products, accounts for more than $1 billion of Cisco's annual
sales.
Cisco has almost two dozen customers testing its storage
switches, and expects at least one third of those to deploy the
products within the next two months, said Soni Jiandani, vice
president of marketing for Cisco Storage Tech Group.
Copyright 2003, Reuters News Service |
