Tim L.,
Nice day for us today, now if only we can build from here. Compaq/IBM can't handle EMC without ganging up?
Odd IBM-Compaq Pairing Seeks To Displace EMC
(07/06/00, 2:24 p.m. ET) By Barbara Darrow, TechWeb News
The Internet has made for another set of strange bedfellows.
Compaq (stock: CPQ) and IBM (stock: IBM) have cast their lot together, pledging to make their storage offerings interoperable and open.
Toward that end, Compaq will OEM and resell IBM's "Shark" enterprise storage server, and IBM will OEM and resell Compaq's midrange Unix- and Windows NT-based storage systems equipped with IBM's 10,000-rpm hard drives, the companies said.
The move is clearly aimed at storage giant EMC, Hopkinton, Mass. But that name was barely uttered in a press conference featuring five top IBM and Compaq executives.
"I'm not going to comment on EMC. I suggest you call them," said IBM senior vice president Nick Donofrio in response to a question.
Some said the pairing of two large companies on storage will no doubt get the attention of EMC.
"This announcement must have really puckered some butts in Hopkinton," quipped Ron Johnson, senior partner with Evaluator Group, a researcher in Englewood, Colo.
Observers said the industry is moving, in fits and starts, towards an open, and less expensive, storage solution.
"You need two things for SANs to become real: centralized management and storage abstraction/virtualization, and this [deal] will hasten both," noted Johnson.
Both camps pledge allegiance to so-called open systems that use standard hardware and software, but Johnson said EMC solutions are "built around exploitation of its Symmetrics product ... a very expensive subsystem."
IBM and Compaq are driving towards the commoditization of storage, meaning that price points should fall, observers said. The lucrative mainframe arena will not be as affected by these activities, they said.
EMC, which likewise claims to support open standards, has another take on the pairing.
"These are two server vendors who have been losing market share in storage for better part of a decade. And they're the two weakest server vendors among all the computer makers. They're both losing marketshare in their core server business left and right to HP (stock: HWP), Sun (stock: SUNW), Dell (stock: DELL)," said EMC spokesman Mark Fredrickson. "Obviously, there is some urgency to this move."
Fredrickson also maintained that the announcement mentioned no new features or functions.
"There is not a thing you can buy now that you couldn't buy last week," he said.
The pairing of two longtime hardware rivals shows "the profound effect of the Internet ... which brings leaders ... even competitors together," said Compaq CEO Mike Cappellas.
By all accounts, the storage market is growing by leaps and bounds. Researcher IDC predicts it will hit $49 billion by 2003.
"Frankly, I think those numbers are low," Capellas said.
The companies will begin reselling each other's products immediately and will work together over the next year to build greater levels of standards-based interoperabiltiy, they said.
"You'll see base-level connectivity and interoperability right away, and over time -- a fairly short period, 12 months or so -- you'll see higher levels of interoperability, allowing a storage pool to be managed across the SAN," said Howard Elias, general manager of Compaq's Storage Products Group.
Earlier this year, IDC, Framingham, Mass., said Compaq, which bought Digital Equipment and its storage business, remains first in worldwide revenue for disk storage systems with 20.6 percent. EMC follows with 14.4 percent, and IBM ranks third with 12.8 percent.
Rounding out the top five are Hewlett-Packard with 8.1 percent and Sun Microsystems with 7.5 percent.
IBM and Compaq characterized the deal as long-term and said they would together invest up to $1 billion in the effort. They declined to elaborate.
As part of the arrangement, Compaq also will be able to resell Tivoli's enterprise management suite, specifically the storage management, Donofrio said. Tivoli is an IBM subsidiary specializing in network and systems management.
Observers said IBM has turned up the heat on its storage business of late, trumpeting account wins, especially when they came at the expense of EMC.
"With Shark, IBM is trying to reclaim some lost glory and share that EMC has taken away," Mike Kahn, CEO of The Clipper Group, a Wellesley, Mass., researcher, said earlier this year.
Good for SANs and fabric and Q/A? WHo will be the fist to say that they will use a BIG director?? Come on ANCR sign those folks up now! |
