Interesting story in the June 26, 2000 issue of BusinessWeek regarding SUNW's entry into the storage market, specifically citing EMC, with focus on price differential between SUNW and EMC products. Surprisingly, no reference to NTAP.
businessweek.com@@xBnlc2UQSqU*wwQA/premium/00_26/b3687146.htm
Sun Takes Another Shot at Storage
It's targeting startups that want a cheaper product than EMC's
Sun Microsystems Inc. (SUNW) would seem to be on top of the world. The dominant maker of the big server computers used by Internet companies, it grew by 35% last quarter, leaving rivals such as IBM (IBM), Hewlett-Packard (HWP), and Compaq (CPQ) in the dust. There's one big nut, though, that Sun can't seem to crack: the market for computer storage systems that hold all the corporate data, Web pages, and songs zapped over the Internet. Rather than look to Sun to keep their data, many customers choose gear from rivals, especially storage king EMC Corp. (EMC)
Sun isn't giving up. On June 14, in what it calls its most important initiative since it introduced Java software in 1995, Sun unveiled a purple, VCR-size machine called StorEdge T3. The advantage of this product over what EMC offers? For starters, price. A Sun machine holding 1 terabyte of data--roughly the info in 3,000 encyclopedias--will set customers back $155,000. EMC's cabinet-size Symmetrix machine, holding a terabyte of data, costs around $400,000.
Better still, Sun's storage system can grow with customers' needs. Users can stack Sun's storage devices together to add capacity in affordable pieces rather than in pricey, EMC-style chunks. And by using new Sun software, customers will be able to back up their data over the Web to any kind of storage device--which is hard to do with EMC gear. ''EMC is formidable, but it's living in the past,'' says Sun President Edward J. Zander.
For Sun, the stakes are huge. Computers may still get the headlines, but storage is the hotter market. Sales are expected to increase 12% a year through 2003, to $46 billion, while the server business is pegged to grow only 6% yearly, to $83 billion, over the same period, according to researcher IDC. While storage has long been an afterthought in computer purchases, it could become the dominant piece of hardware as companies move their most sensitive data to the Net. ''Storage has been seen as the peripheral in the past, but that could soon go the other way,'' says Merrill Lynch & Co. analyst Steven M. Milunovich.
PAY AS YOU GROW. Can Sun unseat EMC? The odds are long--especially since the company made similarly brash announcements in 1997 and 1998. Some of those products suffered quality problems and failed to catch on. Now Sun must prove it can match EMC's trademark round-the-clock hand-holding. And though Sun won't say how much it's investing in its storage thrust, analysts say it's far less than the $2 billion EMC will spend on research and development in the next two years. Sun is ''vastly underestimating what it takes to succeed,'' says Don Swatik, EMC's vice-president for strategic planning.
Still, if Sun doesn't triumph in the storage wars, it might win a few battles--if only by luring its server customers back into the fold. Says analyst Jack Scott of market researcher Evaluator Group: ''This will probably stanch the flow'' of sales to rivals. Upstarts, in particular, may like Sun's pay-as-you-grow approach. ''We're constantly adding more storage, and EMC is too pricey,'' says Randal Jew, an engineer at Sunnyvale (Calif.) software maker Wind River Systems Inc. Analyst Milunovich says Sun could add $500 million in sales if it gained back even some of its customers. That may not quite match Sun's top-of-the-world performance in servers, but it would be a welcome change of pace in its glaring weak spot.
By Peter Burrows in San Mateo, Calif. |
