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 : Compaq -- Ignore unavailable to you. Want to Upgrade?

To: Steven N who wrote (93546)	11/1/2001 9:09:40 PM
From: Night Writer	Read Replies (1) \| Respond to of 97611

I can't relate the article to the General.

To: Steven N who wrote (93546)	11/1/2001 11:08:28 PM
From: Night Writer	Respond to of 97611

Data storage free-for-all shaping up for 2002 (Adds comment from EMC in paragraphs 7-8) By Tim McLaughlin BOSTON, Oct 31 (Reuters) - The high-flying data-storage industry has come back to earth, but competition has never been keener as rivals of industry giant EMC Corp. <EMC.N> circle the company that dominated them for nearly a decade. As revenue expectations for Hopkinton, Massachusetts-based EMC shrink, rivals such as IBM Corp. <IBM.N>, Hitachi Data Systems and Compaq Computer Corp. <CPQ.N> say they have the tools to break EMC's lock on the high-end data-storage market. "The story that people are missing is what we're doing to (EMC) on the enterprise side," said Mark Lewis, vice president of Compaq's enterprise storage group, which sells hardware and software to large corporations. Lewis said it is a mistake to view Compaq as just a server company that sells mid-priced storage systems. EMC recently struck a sales pact with Dell Computer Corp. <DELL.O> aimed at upending Compaq's leading market share in that mid-range segment. Lewis, however, said Compaq is winning lucrative business in the enterprise market, where EMC is No. 1, at EMC's expense. "(EMC) should be more worried about us coming into their market and taking them out," Lewis said. Ken Steinhardt, EMC's director of technology analysis, said competitors are getting more aggressive in their marketing efforts, but ultimately those efforts are not affecting the decisions made by customers. "It's an exciting place and they want to be there," Steinhardt said. "But they're not there with the fundamentals, the products, the technology and the service and support." DIFFERENT STORY LAST YEAR At this time last year, Wall Street would have paid little attention to the boasts of EMC's rivals. After all, EMC would unveil plans to generate $12 billion in revenue in 2001, a 35 percent increase over 2000. EMC's rivals now have Wall Street's full attention after EMC posted a $945 million net loss in the third quarter and conceded it sales force failed to recognize key market shifts. Wall Street analysts expect EMC's revenue to be $6.9 billion to $7 billion this year, and as low as $6.1 billion next year, according to research firm Thomson Financial/First Call. As EMC built a company based on rapid growth, it failed to respond quickly enough to the gains made by rivals and to the customer shift toward smaller, less expensive machines that store e-mail, credit card transactions and other vital corporate information. As late as August, EMC Chief Executive Joe Tucci compared IBM's Shark storage device with the toy that comes with a McDonald's Happy Meal. He said IBM was able to ship a growing number of Shark machines because they're thrown in with IBM's booming mainframe business. Tucci got a laugh with that comment at an EMC storage conference for industry analysts and reporters. But no one at EMC was smiling when two months later IBM announced that Wal-Mart Stores Inc. would use 20 Shark machines to run its industry-leading inventory and supply system. "We got tremendous momentum from that deal. And I remember reading that Happy Meal remark somewhere in the newspaper," said Bob Samson, IBM's vice president of worldwide storage sales and operations. "You know why they say that? Because they're a one cheeseburger play. We don't mind being called a Happy Meal because we offer our customers a little of everything." LOCKED UP EMC secured a lock on the high-end data storage market in the early 1990s with its refrigerator-sized Symmetrix device. While IBM squandered its lead with a number of failed iterations of its own machine, EMC racked up gross margins in the 50-percent range selling the pricey Symmetrix. But with hardware prices falling fast, thanks to renewed competition amid a global spending slowdown for information technology, EMC is recasting itself as a software company whose products will run on the hardware of rivals. "Many in the industry had pegged them as a proprietary closed play," Samson said. EMC unveiled new and repackaged software products on Monday to address that perception and to move further away from its hardware-centered business plan. "I agree with the EMC software business model that says you have to sell software decoupled from hardware," Compaq's Lewis said. "They are awful late to market. We've been doing this for three years." EMC's software sales accounted for 20 percent of its overall revenue in the third quarter. Tucci said he wants software to account for 30 percent of EMC's revenue, which could take several quarters after the industry rebounds. Meanwhile, Hitachi Data Systems, a unit of Japanese electronics giant Hitachi Ltd. <6501.T>, plans to spend up to $1 billion next year to acquire start-up software firms. EMC is hunting for those firms, too, and holds about $5 billion in cash and equivalents. What's more, Hitachi has sales pacts with Hewlett-Packard Co., a former EMC ally, and most recently with Sun Microsystems Inc. to sell its hardware. And with the pending merger between HP and Compaq, Hitachi's presence in the data-storage market could be felt that much more. ((--Boston newsroom 617-367-4106; fax 617-248-9563; e-mail boston.newsroom@reuters.com)) REUTERS

To: Steven N who wrote (93546)	11/1/2001 11:10:08 PM
From: Night Writer	Read Replies (1) \| Respond to of 97611

Competitors question cooperating with EMC software In NEW YORK story headlined, "Competitors question cooperating with EMC software," please read name in paragraphs 9, 10, and 11 "Lonchar" instead of "Lonchard." (Corrects spelling) A corrected version follows: NEW YORK, Oct 31 (Reuters) - Executives at companies that compete with storage industry leader EMC Corp. on Wednesday said they doubt EMC's new automated storage software will be supported by other storage equipment providers. Speaking to investors at a Prudential technology conference, executives from storage software maker Veritas Software Corp. <VRTS.O> and data storage system maker Network Appliance Inc. <NTAP.O> said they doubt EMC will get the cooperation from its competitors that they said it needs to make its new storage management software work. EMC, which on Monday announced plans for a software product that will enable customers to see and manage their storage across the data center, said however that it doesn't necessarily need cooperation from vendors. EMC's new software aims to work with storage equipment made by competitors, which include Compaq Computer Corp. <CPQ.N> and International Business Machines Corp. <IBM.N>, within 90 days, EMC has said. But Network Appliance Chief Executive Dan Warmenhoven has his doubts. Network Appliance makes low-cost to mid-range storage computers that compete with EMC. "I think EMC's strategy now is saying, we're going to move now to managing everybody's else's storage. I'd like to see it happen. I don't think it's going to happen. I just don't think it's going to happen," Warmenhoven said. He said, "I don't think anyone is going to cooperate plugging into EMC's APIs." An API, or an application program interface, is a language and message format used by an application to communicate with a computer's operating system. Meanwhile, Veritas Chief Financial Officer Ken Lonchar said that based on conversations he'd had with competitors, he believes EMC doesn't have the support of competing vendors for what EMC is calling an open system. "They're talking about heterogenous support of different devices with their software, yet there were no partners in that announcement," Lonchar said. "There's nothing emanating from them." In the end, Lonchar said, the technology could be a bit of a double-edged sword for EMC, which is looking to diversify its revenues away from hardware sales. Hardware sales have been hurt this year by declining technology spending. "It's a cool technology, although what happens when people use that and they go out and see their storage utilization is real low? They probably buy less hardware," Lonchar said. EMC says it doesn't need vendor cooperation to make its software work and that industry players will pressure vendors to cooperate. "We've already proven we don't necessarily need the vendor cooperation," said Ken Steinhardt, EMC's director of technology analysis. "It would just make life easier." He said EMC's competitors will be pressured by data-storage customers to cooperate with EMC and the rest of the industry. As an example, he pointed out how customers pressured IBM in the early 1990s to allow EMC to plug its Symmetrix storage device into IBM mainframes. That move eventually allowed EMC to overtake IBM as the world's top data-storage firm. EMC's infrastructure program boasts cooperation from 87 companies, including some of its keenest rivals such as Veritas Software and Hewlett-Packard Co. <HWP.N> He said EMC spends about $250 million a year on its interoperability program, which works to ensure compatibility between servers, mainframes and storage hardware and software. In all, EMC has invested $2 billion into this effort. ((Caroline Humer, New York Technology Desk, 1 646 223-6181, caroline.humer@reuters.com)) REUTERS