Upside on storage......
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The Annual Upside Downside
Page 16: Computer Storage
In late 1998, the storage industry resembled New
England weather--if you didn't like it, all you had to do
was wait a minute for it to change! New features and
enhancements are being built into storage devices with
dizzying speed. Even as we go to print, traditional
stand-alone functions--such as disaster recovery
duplicate imaging and backup systems that work
across diverse form factors--are being engineered into
storage solutions. In addition, storage requirements are
exploding--we believe the average IT group's
requirements will increase 35 percent to 50 percent in
1999.
We can foresee a time in the near future when data
storage will outweigh any other computing, processing
or networking issue. We're urging a storage-centric
view of the IT landscape.
EMC Corp. No wonder EMC seems to be on a
continuous roll: The company is well-run,
well-positioned and aggressive. A superb attacker, it
wrested the market from IBM Corp., Storage
Technology Corp. and its Japanese competitors.
However, the wolf is always at the door for storage
hardware suppliers. EMC needs to get into software
and services in a big way--and quickly.
Market
Share
Innovator
Overseas
Alliances
Management
Overall Score: 4.4
Quantum Corp. This computer storage company
made money in a tough market in 1998. Although it has
been a strong technology leader in the tape business,
Quantum has suffered big losses in the PC disk drive
segment. Having trimmed its workforce this year,
management is projecting more than $6 billion in
revenue for '99.
Market
Share
Innovator
Overseas
Alliances
Management
Overall Score: 3.2
Iomega Corp. This removable-drive maker is having
a rough time. But while it may be losing money now, it
should be in the green later in the year. Good products,
and although management turnover is a concern, recent
acquisitions make sense.
Market
Share
Innovator
Overseas
Alliances
Management
Overall Score: 3.0
Seagate Technology Inc. Faces an uncertain future
after jettisoning company co-founder and former CEO
Al Shugart. Seagate lost money in '98; now it's hoping
new products will help it turn the corner. We think PC
disk drives represent the ultimate commodity market
(after motherboards). Fierce fight with Quantum and
Western Digital Corp.; the barracuda had better eat
some of the competition.
Market
Share
Innovator
Overseas
Alliances
Management
Overall Score: 2.6
Storage Technology Corp. This company's Virtual
Storage Manager system for linking multiple large
storage devices is a hit--it could even be a blockbuster.
With great management and excellent technology,
Storage Technology is coming back from the walking
dead. It may be courting Data General Corp.
Market
Share
Innovator
Overseas
Alliances
Management
Overall Score: 2.4
Western Digital Corp. This disk-drive maker is
shaping up as an also-ran. It lost money in '98, and the
outlook for '99 doesn't look much better. Its lack of
new strategic products has hurt.
Market
Share
Innovator
Overseas
Alliances
Management
Overall Score: 2.0
Howard Anderson is president of The Yankee
Group, a Boston-based firm he founded in 1970 to
analyze high-technology companies. Anderson also
co-founded Battery Ventures, a Wellesley,
Mass.-based venture capital firm.
The Yankee Group and Battery Ventures may provide
financial backing, research information and other
consulting services to companies mentioned in this
feature.
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