How will this impact emc??
Tuesday June 22 1:28 AM ET
IBM To Unveil Storage Network Products
By Eric Auchard
NEW YORK (Reuters) - IBM said Tuesday it would unveil plans for a new generation of data storage
products that analysts forecast could represent the biggest chunk of new corporate technology spending
in three years.
International Business Machines Corp. (NYSE:IBM - news), the No. 2 supplier of data storage systems connected to
corporate computer systems, behind market leader EMC Corp. (NYSE:EMC - news), laid out a multiyear strategy for its new
Storage Area Network products.
SAN products allow companies to store centrally, manage and give office workers access to key business information, which is
proliferating amid exploding Internet use and cheaper disk drive technology that allows organizations to store more information
online.
In a strategy sure to confuse industry outsiders, IBM will not only make its new systems compatible with computers built by
rivals but will also sell them key technology building blocks on which its own storage products will be based.
''No other company can bring together a combination of storage, services, and servers and software to take advantage of this
important trend,'' James Vanderslice, group executive of IBM's technology business unit, said in an interview Monday.
Across the industry, computer makers are overcoming a traditional focus on selling storage systems that work only with their
own computers.
Instead, IBM and rivals like EMC, Sun Microsystems Inc. (Nasdaq:SUNW - news) and Hewlett-Packard Co. (NYSE:HWP
- news) are eying the far bigger potential market for SAN systems that work on both their own and rival computer systems.
''We are competitors and partners and customers,'' Vanderslice said of the side-by-side competition and cooperation that, at
least in the emerging stages of the market, has begun to characterize the data storage market.
The market for external data storage (equipment not built directly into computers themselves) is expected to grow to $21 billion
in 2003, up from $10.5 billion in 1998, according to a forecast by market research group Dataquest.
Within four years, SANs are expected to make up 80 percent, or $16 billion a year, of the sales of such storage equipment,
said Roger Cox, a Dataquest storage market analyst.
''Spending on data storage is going to make up such a huge portion of corporate (information technology) hardware budgets in
the future,'' Cox said. ''Upwards of 75 percent all new hardware dollars could go to storage systems within four to five years,''
he said.
In contrast to traditional computer layouts, in which centralized data storage is managed inside server computers or closely
connected to them, SANs are separate storage systems linked directly to office computer users, freeing office networks and
server computers to handle other tasks.
Earlier in the decade, IBM in effect pioneered development of SAN storage systems with ESCON, a system designed to
speed the storage of data on its S/390 line of mainframe computers.
IBM's proposed component supply arrangement builds on recent multibillion-dollar deals it struck with rivals like computer
maker Dell Computer Corp. (Nasdaq:DELL - news), storage supplier EMC Corp. and video game maker Nintendo Co.
More component supply pacts could be inked in coming weeks, Vanderslice said, declining to provide specifics.
By 2002, IBM estimates, 70 percent of all medium-size and large organizations will be using SANs to manage and share the
volumes of data created as they transform themselves into e-businesses.
At a news conference to be held at the PC Expo trade show in New York Tuesday, IBM will showcase its strategy to provide
customers with end-to-end SAN and storage systems -- providing not only the hardware but the software and services
necessary to install SANs, whether on IBM computers or other systems.
In addition to the strategy road map, IBM said it would offer SAN systems running on its line of Netfinity PC servers and other
Windows NT-based computers.
IBM said it would offer a means of offloading the process of making duplicate copies of key business data from overloaded
office networks by creating direct links between storage systems and its Tivoli system management software.
As part of its push to boost its role as a supplier of key components and not just whole computer systems, IBM will make
available SAN technology components, such as hard disks, network switching computer chips and faster microprocessors, to
other storage equipment vendors, even potential rivals.
Later this year, IBM said, it will unveil a new SAN-ready storage server system based on Seascape, the computer maker's
new open design that will underlie all future IBM storage products.
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