Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

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

To: J Fieb who wrote (3353)	5/31/2001 4:19:30 PM
From: Gus	Read Replies (1) \| Respond to of 4808

As solid as HDS is at the high end of the storage market, it is missing some key pieces, the biggest of which is homegrown storage management software. HDS and its parent company are currently negotiating to buy such a company, Roberson says. HDS is probably the most likely buyer for DataCore, IMO. Here's a little fable on storage software acquisitions. StorageTek and Encore Computer started working on making storage systems that would support both mainframe and open systems in 1990. Amdahl joined the effort a few years later as EMC came out of nowhere to grab the lead in mainframe storage, from less than 1% of an $8B mainframe storage market in 1990 to 41% of a $4B mainframe storage market in 1995. By 1995 much of the development work on the data-sharing consortium had been completed and the collaborative result, the Iceberg, was being extensively tested by StorageTek. By 1995 also, IBM's market share of a shrinking mainframe storage market had collapsed from around 75% in 1990 to 31% in 1995. An IDC report at that time pegged EMC as the performance leader with IBM and Hitachi tied for leadership in terms of reliability. As a result, IBM decided to launch a massive counteroffensive against EMC, but IBM couldn't scale its RAMAC controller technology to keep up with Symmetrix so IBM did the unthinkable and entered an alliance with StorageTek 1997 to resell the Iceberg, which by then had been delayed by about 2 years. That 2 year delay was more than enough for EMC to come out of nowhere, AGAIN, to grab the lead in open systems storage. EMC's market share went from 0% in 1994 to 16% in 1996 and it has been gaining market share every year since then. As many here know, EMC entered the open systems market with alliances with NCR and HWP. HWP was then the dominant Unix vendor; although, Sun was in the process of exploiting the way HWP, IBM and other Unix vendors were starting to underinvest in Unix in anticipation of Itanium (formerly Merced due in 1999). As I recall, in terms of units, Wintel servers nosed ahead of Unix servers in 1996; although, in terms of revenues, Unix servers still had a commanding 6 to 1 advantage. While StorageTek was testing Iceberg, Encore had decided to put itself up for sale in 1995 but found no interest from its former parters, StorageTek and Amdahl. Sun ended up buying Encore for around $200-300M in 1997 and Encore's data-sharing technology became the foundation for the ill-fated A7000 which, as I recall, had more than 100 beta sites up and running before Sun finally pulled the plug in 2000. Despite close to 10 years in the hands of the best engineers from Storagetek, Amdahl and Sun, Encore's technology proved too difficult to integrate with Solaris. So Sun, which had acquired Maxstrat in early 1999, started working on Plan B - Purple. The StorageTek and IBM reseller agreement ran for 2 years. By 1999, IBM rushed Shark to market even though it did not yet have the complete feature set to compete with EMC. Curiously, before IBM could even deliver on the Shark features that it promised over an 18-month period, it had already decided to talk up their Storage Tank virtualization technology, again due over an 18-month period. WitSoundview estimated that Shark revenue (hardware and software) was around $300M in IBM's most recent quarter. This a remarkably anemic run rate considering the persistent field reports and statements from IBM that they were pricing the toothless Shark as much as 90% below Symmetrix! The point of this walk through the recent past is to point out that storage acquisitions based on technology are very difficult endeavors and more often fail than not. Hitachi seems determined to compete directly against EMC which it publicly declared as its main archrival earlier this year. I think that's a mistake because Hitachi is not only competing against EMC and its $1B laser-focused R&D budget, it is competing against EMC's partners in its Open API program which will produce twice the number of products next year (70+) that it produced this year (30+). Fujitsu's approach is probably more interesting. Fujitsu's storage software subsidiary -- Fujitsu Softek -- is expected to gross $90M in sales in its full year of operations and there are indications that Fujitsu may join EMC's open API progam rather than compete head-on. EMC and Fujitsu already have mutliple alliances in different parts of the world. One reason I think that this is the smarter move is that one uncharted area for storage software is wireless data. NTT Docomo is leading the charge to 3G with over 22 million subscribers.

To: J Fieb who wrote (3353)	6/1/2001 3:00:55 AM
From: Gus	Read Replies (1) \| Respond to of 4808

It looks like Fujitsu beat Hitachi to DataCore. When Amdahl (Fujitsu) pulled out of the mainframe market last year, it promptly declared a two year period of renewal or turnaround. Time will tell if DataCore will end up like another Florida-based storage software company, Encore Computer. Fujitsu, DataCore Establish Storage Agreement Wednesday, May 30, 2001 Fujitsu Softek and DataCore Software are pooling their resources to help global businesses meet their exploding software storage requirements through the introduction of Fujitsu Softek's new storage networking and virtualization product. Fujitsu Softek is targeting the $16.7 billion global storage management market, which is forecasted to grow at a compounded annual growth rate of 26.1 percent through 2005, according to Dataquest. Under terms of the arrangement, DataCore will act as the OEM to Fujitsu Softek which will brand the new storage solution “Softek Storage Virtualization.” The new solution, which will include a series of newly developed application modules, will be based on DataCore's leading storage networking and virtualization technology. "The joint venture with DataCore enables us to immediately provide a vendor-independent storage provisioning solution to our customers who are struggling with the complexity of having to manage critical application availability needs while cost effectively managing an expanded storage infrastructure. This solution allows customers to achieve higher utilization of existing resources by speeding the provisioning of their SAN storage on demand," said Steven F.X. Murphy, president and CEO of Fujitsu Softek, in a statement. "It simplifies the provisioning of storage resources by removing the legacy boundaries of direct connections between storage hardware and servers." For more information, visit softek.fujitsu.com (new window) or www.datacore.com (new window). midrangesystems.com