The Rivals Looking to Eat EMC's Lunch
Business Week Online
Advice to Mike Ruettgers: Keep your eye on that rearview mirror. Although EMC Corp. is speeding along for now, the race is on for a piece of the fast-growing storage business. Spurred on by EMC's success, competitors from Sun Microsystems to Compaq to Dell are launching their own products in an effort to catch up. ''We're going after EMC,'' says Thomas Meredith, Dell Computer Corp.'s chief financial officer.
Simply put, these companies are trying to do to EMC what it once did to former industry leader IBM: Eat its lunch. And as corporate clients move to a new generation of networked computers, EMC's rivals see an opportunity to provide the best combination of hardware, software, and services to meet those customers' storage needs. A new technology called fiber channel is making it possible to string together many data-crunching servers that operate over a wide geographic
area with storage units from a mix of suppliers.
The idea is to ease the burden on existing networks by off-loading much of the task of filing and retrieving data to a dedicated storage network of its own. That frees up a company's existing data network to speedily handle such chores as zapping E-mail and navigating the Internet.
On March 1, EMC came out with what industry experts say is the first comprehensive package allowing customers to build extensive fiber-channel networks. The National Association of Securities Dealers will be among the first to install EMC's new network to better track the billion stock trades a day on its exchange. Other EMC customers, including Citigroup, are also making the upgrade.
Still, it wont be easy for EMC to maintain its lead. Sun Microsystems Inc., for one, has EMC in its sights with a network storage project of its own, called StoreX. Although still embryonic, StoreX is already creating industry buzz. And Sun executives are confident that their strong position in networking will make StoreX a hit with corporate clients. Says Janpieter Scheerder, president of Sun Microsystems' network storage unit: ''Ruettgers is very smart. But he's not a Web and networking kind of person. He's a mainframe guy.''
DOING WINDOWS. Sun isn't the only new entrant Ruettgers needs to keep his eye on. IBM is attempting a comeback. And Compaq Computer Corp. and Dell are using their market leverage as leading providers of machines that run Microsoft Corp.'s Windows NT operating system to sell their own storage networks. With NT's growing popularity for
handling major corporate computing chores, Compaq and Dell figure they can break EMC's hold on the market for storage inside big companies.
They could be right. ''EMC may be an excellent partner,'' says John Gerdelman, executive vice-president for technology ventures at MCI WorldCom. ''But we never stop looking.'' With the storage market expected to double, to $35 billion, by 2001 and competitors storming in, EMC customers will have far more choices. That's why Ruettgers is stepping on the gas to stay ahead of the pack.
By Paul C. Judge in Boston |
