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

To: J Fieb who wrote (3992)	9/9/2001 3:45:41 PM
From: J Fieb	Read Replies (1) \| Respond to of 4808

Friday September 07 06:15 PM EDT HP-Compaq could rival EMC By Evan Koblentz, eWEEK High-end storage giant EMC could, for the first time, be in for some stiff competition with HP-Compaq's $60 billion combined storage divisions posing a threat. The proposed merger between Hewlett-Packard Co. (HWP - news) and Compaq Computer Corp. (CPQ - news) could more clearly define the battle lines in the storage market, but whether that means more or fewer product choices for users is unclear. The two companies were among several high-tech giants chasing EMC Corp. (EMC - news) for a greater share of the coveted high-end storage market. For those chasing EMC, the merger could prove a boon because it basically aligns everyone against the Hopkinton, Mass., company, analysts said. The recent history is complicated and comes down to storage equipment and server computers. This summer, Hitachi Ltd., of Tokyo, partnered with Sun Microsystems Inc. (SUNW - news), of Palo Alto, Calif., in a deal designed to pair Hitachi's high-end storage boxes with Sun's high-end servers and enterprise business inroads. But Hitachi already had a similar deal with HP's server group, and Houston-based Compaq, a leader in both midrange storage systems and high-end servers, had a deal to resell IBM's high-end storage. All the competitive maneuvering builds a two-pronged attack on EMC, with IBM, of Armonk, N.Y., and the Hitachi-Sun alliance on the high end and the merged HP-Compaq--which includes HP's recent acquisition of management software maker StorageApps Inc.--in the midrange. The current HP-Hitachi and Compaq-IBM deals likely will fade out, analysts said, as neither was especially successful. EMC has never had a single direct competitor--and still doesn't--but now it must contend with fewer, bigger and more clearly defined rivals, even though none is as all-encompassing as EMC. Just counting HP's and Compaq's storage divisions, "you roll these two together, that's a $6 billion enterprise," said Steve Duplessie, an analyst with Enterprise Storage Group Inc., in Milford, Mass. "You're talking a large-scale storage company all of a sudden that begins to rival EMC. From a technology perspective it's great." How great won't be known until HP, of Palo Alto, Calif., determines which products stay and which are tossed aside during the merger. Users of Compaq's storage products are taking a wait-and-see approach. "I don't think it's going to make any difference for us. Who's going to be merging next week?" said Patricia Pettite, director of academic technology at Millikin University, in Decatur, Ill. "I think it's too early to tell. It's going to be the same number of options, just maybe a different look," said Doug Roberts, manager of system services for Hannaford Bros. Co., in Scarborough, Maine. Another obstacle for the merged company could be personality and culture conflicts between HP's Nora Denzel, vice president and general manager of network storage solutions, and Compaq's Mark Lewis, vice president and general manager of enterprise storage group, said Duplessie. "There's got to be some ego play here. Someone's got to own it," Lewis said. "Maybe it'll all just be fine, but I doubt it. Something's going to give. The question is when." \