I think an IBM executive read your post,
(Now all they need to do is put there money where there mouth is and issue a buy back and this stock will rise again):
IBM sees momentum with new high-capacity storage
By Eric Auchard
NEW YORK, Nov 4 (Reuters) - International Business Machines Corp. (NYSE: IBM) has made unexpectedly strong
progress in the first month of shipping its new high-volume Shark data storage systems, staunching years of decline in the
market, the top executive overseeing IBM's storage business said on Thursday.
"I think we have a very strong momentum in this storage subsystem business which will only get better," James Vanderslice,
senior vice president and group executive of IBM Technology Group, told Reuters in a phone interview.
So-called "storage subsystems" are made up of strings of disk drives housed in refrigerator-sized cabinets that are used to store
the vast databases of the world's largest companies, or by Web sites to handle millions of visitors or customers.
The market for large storage systems is forecast to rise about 20 percent a year to $45 billion by 2002, IBM officials said,
citing industry data.
"It's our intention to be a major, major player in this industry. Our investments have been in place.... and the results of those
investments are starting to show," he said.
Shark, IBM's new line of disk systems used to store data on mainframe and other powerful business computers, marks a bid
by the world's largest computer maker to reenter and eventually retake the lead in the fast-growing high-volume storage
market, having ceded it to rival EMC Corp. (NYSE: EMC) years ago.
The new systems only became available at the end of September, but have been sold already to 30 of world's 100 largest
companies, Vanderslice said. To date, IBM has shipped several hundred Shark systems, he added.
In addition, the IBM official said Shark systems, some of them capable of storing several trillion bytes of data, are competing
for use at all of the top 20 Web sites -- an area where IBM storage has been largely absent. One such major "dot.com" site,
not an existing customer, has purchased Shark.
Storage sales are a bright spot for IBM. Analysts predict no spending pause heading into the Year 2000 due to a continued
explosion of demand for equipment need to hold the vast amount of data being generated by growing Internet use.
By contrast, IBM last month warned of a financial shortfall for the next two quarters due to lower spending on its most
powerful computers by its biggest customers as they gird against Year 2000 software glitches heading into the New Year.
IBM stock lost nearly 20 percent of its value on Oct. 21, falling to $91 on the New York Stock Exchange. On Thursday,
shares closed off $2.50 at $91.54.
"We're finding that there's hardly a blip in the storage deployment," said disk storage analyst Robert Gray of market research
firm International Data Corp. "We are expecting for all of the suppliers Year 2000 will be a banner year," he said, adding:
"E-commerce is just an incredible storage consumer."
The disk storage hardware equipment business is expected to grow 14.5 percent in 2000, to $34.3 billion, compared with $30
billion, or 10 percent growth in 1999, according to IDC.
IBM is targeting rival EMC, which usurped it as the No. 1 maker of storage systems several years ago.
Vanderslice said the Shark systems are 15-20 percent cheaper than EMC. The IBM products are three to four times faster
than any rival mainframe data storage system and substantially faster than storage for non-mainframe computers, he boasted.
"We have cost advantages, we have performance, and now we can add function faster than our competitors," he said.
But Gray said while IBM appears to making progress holding its own in the market and stemming market share losses, EMC
may prove hard to dislodge. "We expect IBM to maintain share not lose share to EMC," he said of his 1999 revenue estimates.
For while IBM is installing more terabytes, or trillions of bytes of storage, these systems are sold at lower cost than EMC. As a
result, IBM's revenues will stay roughly flat, while EMC's are expected to grow slightly this year, Gray said.
"Evidently, price and the IBM brand name are not sufficient to edge out EMC here," the analyst said.
In the storage systems market, Gray said he expected EMC to grow slightly this year in mainframe storage to 50.2 percent
from 48.9 percent in 1998. IBM will hold essentially steady in 1999 at 28 percent versus its 27.8 percent share in 1998.
The data is contained in IDC's just published "1999 Worldwide Disk Storage Systems Market Forecast and Review."
Gray believes EMC's revenue gains are coming largely at the expense of Hitachi Ltd.'s Hitachi Data Systems unit.
In a curious twist, IBM has positioned itself as a major supplier of hard disk drive components to EMC, having signed a $3
billion long-term supply contract with EMC in the spring, so IBM also stands to benefit from the sale of EMC storage.
"Some people mistakenly believe that they are in a 100-yard sprint...when they are competing against IBM," Vanderslice said.
"That's a mistake. We are in a 440-yard (dash) as opposed to a sprint." |
