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To: Galirayo who wrote (17203)	4/5/2006 7:29:05 AM
From: Galirayo	Read Replies (1) \| Respond to of 23958

UPDATE 2-EMC, NEC step up ties in storage business Wed Apr 5, 2006 7:17 AM ET (Adds EMC chief executive comments, details, share price) TOKYO, April 5 (Reuters) - U.S. data storage company EMC Corp. (EMC.N: Quote, Profile, Research) and Japanese electronics maker NEC Corp. (6701.T: Quote, Profile, Research) said on Wednesday they have agreed to co-develop entry-level storage products, an area where strong demand growth is expected. yahoo.reuters.com The two companies, already in cooperation for sales of EMC's storage devices, said their expanded ties also include mutual supply of each other's storage-related software and stepped-up sales drives in Japan for EMC products. The existing ties generate combined sales of about 40 billion yen ($342 million) a year for the two companies, and the expanded cooperation is expected to boost the figure to 100 billion yen in three years, NEC said. EMC is the world's biggest supplier of computer storage products while NEC is Japan's third-largest electronics conglomerate. EMC held a 20.7 percent share in the $16 billion global external disk storage systems market in 2005, followed by Hewlett-Packard Co. (HPQ.N: Quote, Profile, Research), International Business Machines Corp. (IBM.N: Quote, Profile, Research) and Dell Inc. (DELL.O: Quote, Profile, Research), according to research firm IDC. But in Japan, it came in fifth behind Hitachi Ltd. (6501.T: Quote, Profile, Research), Fujitsu Ltd. (6702.T: Quote, Profile, Research), IBM and HP. EMC was number one everywhere in the world, except in Japan, EMC Chief Executive Joe Tucci told a joint news conference with NEC. "Between two of us we can get much better traction and hopefully much more market share here in Japan." Under the agreement, NEC will manufacture new entry-level storage products that will be developed jointly for its own sales as well as for EMC. "Traditionally, storage products vendors have not put much effort into entry level models. This is a relatively new field and strong growth can be expected," said Masaaki Moriyama, director at IDC Japan's storage/server group. "For NEC, the alliance will likely help pave the way for its storage business to go abroad." Companies' spending on data storage is climbing faster than overall information-technology budgets amid growing demand by businesses to back up data. U.S. firms in particular are boosting storage capabilities to help comply with regulations like the Sarbanes-Oxley Act, which was designed to make accounting procedures at companies more transparent and which requires the retention of data. Companies are also looking to upgrade systems that allow them to restore data destroyed in the event of a disaster. Shares in NEC fell 0.8 percent to close at 837 yen, underperforming the Tokyo stock market's electrical machinery index (.IELEC.T: Quote, Profile, Research), which rose 0.19 percent. © Reuters 2006. All Rights Reserved. NYSE and AMEX quotes delayed by at least 20 minutes. Nasdaq and all other quotes delayed by at least 15 minutes. Reuters does not endorse the views or opinions given by any third party content provider.