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Technology Stocks : Son of SAN - Storage Networking Technologies -- Ignore unavailable to you. Want to Upgrade?

To: D. K. G. who wrote (3253)	5/15/2001 12:10:31 PM
From: D. K. G.	Read Replies (1) \| Respond to of 4808

StorageNetworks To Help Firms Build Storage Networks By Brian Deagon Investor's Business Daily investors.com StorageNetworks Inc. Monday took the wraps off a new strategy that could put the company in competition with its best customers. The young data management firm unveiled STORfusion. It’s a service to teach StorageNetworks’ corporate customers how to manage and sell data management services, much as StorageNetworks itself does. Storage management consists of storing, managing and monitoring data. Sales of storage hardware, software and services top $100 billion a year. The emergence of services such as STORfusion shows how the complexity of data storage and services is rapidly overwhelming even the most technically sophisticated companies. StorageNetworks says tech companies could benefit from the growing need for storage services. That’s what STORfusion was formed to do, the company says. "A lot of organizations want to get into this game (of selling data services), but don’t know how," said John Clavin, executive vice president of marketing at StorageNetworks. "They’re starting to see what we recognized three to four years ago." StorageNetworks calls itself a pioneer storage service provider, or storage "utility." Such utilities set up facilities that house servers to store data and that provide the software and services needed to access and use the data. Storage utilities sell this capacity to companies with rapidly growing data storage needs. Customers typically pay a monthly fee. Storage utility services revenue worldwide is expected to top $10 billion in 2004, up from $153 million in 2000, says market tracker International Data Corp. Fujitsu Signs Up STORfusion is moving beyond the storage utility world. It will help corporate customers design and set up their own data centers. StorageNetworks will sell its software used to run such centers. The first customer to sign up for STORfusion is Japan’s Fujitsu Ltd. Fujitsu says the service will make it easier for its customers to gain access to its large storage-area networks. The deal also will give StorageNetworks a toehold in Japan, where it doesn’t yet have a presence. In a press conference Monday, StorageNetworks officials wouldn’t estimate the potential value of its contract with Fujitsu. Nor would they say when they expect STORfusion to start having a big impact on sales or earnings. Executives say their No. 1 target for the new service is telecommunications companies. Next come information technology companies and Internet service providers. Such companies have many customers, tons of data and information technology capabilities, "but they’re not into storage management," said Adam Coture, an analyst at market research firm Gartner Group Inc. "It takes a lot of skill and technology to manage storage." StorageNetworks executives say their new service would let phone companies increase revenue by enabling them to offer storage management as an extra service for their own customers. STORfusion also will help companies lower their overall cost of managing storage, StorageNetworks says. "We’ll succeed when the telcos succeed," Clavin said. IBM, EDS In Same Game StorageNetworks faces competition, though. The global services unit of IBM Corp. offers similar services. EDS Corp., like IBM a large provider of computer services, also is gearing up to enter this market. Besides IBM and EDS, StorageNetworks will be challenged by a number of smaller players that have targeted this market over the last year. StorageNetworks executives, though, say their company has the lead. Moreover, the company has a unique twist in that it’s focusing on helping its customers get into storage management, says IDC analyst Doug Chandler. Phone companies, ISPs, application service providers and many others are struggling to get their arms around the explosion of data that the global economy is producing every second of every day. As a result, StorageNetworks and others in the storage field are grappling to develop services for corporate customers. Finding the right products and services is tough. StorageNetworks has gone from being a traditional provider of storage services – storing customers’ data on its own servers housed in facilities called data farms – to concentrating on selling its storage management software. In the March quarter, it reported a loss of 33 cents a share vs. a loss of $1.04 in the year-ago quarter. The company went public in June 2000. Its stock soon set its all-time closing high of 137. It now trades near 20. "Storage is much more complicated today," Calvin said. "Companies are struggling under the inefficiencies and the ineffectiveness of some storage solutions." He says the sheer size of the market gives his company room to maneuver. "We’re in a relatively new space that is a subset of the large and exciting data storage market," he said.