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To: Mohan Marette who wrote (107131)	3/4/1999 2:16:00 PM
From: Jill	Read Replies (1) \| Respond to of 176387

From EMC Board re IBM, CPQ and provisionally DELL to aLL, rE EMC COMPETITION. i received this private message from Rudedog in which he contends EMC is at a disadvantage to IBM, CPQ [and now Dell] because it does not sell the computer systems as well as storage. Please read and post any thoughts. <<EMC has made its mark by providing systems which support a number of different server platforms. Their initial efforts were all SCSI based and simply allowed a single (or multiple) storage systems to serve as a stand alone datastore for multiple hosts. IBM finally noticed that EMC was eating into not only their mainframe business but their general high end storage sales as well, and responded with several well thought out initiatives, including development of the SAN concept - a storage 'network' which was independent of system networks and could do many routine tasks without involving a host CPU. CPQ developed a slightly different concept based around fibre channel. IBM and CPQ began working together on solidifying the concept, while fielding a number of network and fibre based systems. Both have an interest in taking the business from EMC. They are of course also competitors with each other but they have worked out an uneasy truce much like the future I/O work which allows them to create standards together but compete in the marketplace. The market for multivendor storage in 1995 was about $3B. EMC had the biggest piece of that business, IBM was 2nd and DG / Clariion (and the rebranded HP nike which is Clariion OEM) had most of the rest. Last year that market was about $18B, with IBM taking $7.5B, CPQ about $5B and EMC around $3B.Sun is also in the game at about $1B, and Clariion still has a small share. So EMC has shown good growth but still has lost to both IBM and CPQ. Systems are important because storage components exist within a framework, and that framework is controlled by the systems vendors. IBM, CPQ and HP are setting most of the rules in this space. They will make it increasingly difficult to have an effective stand alone SAN which performs as well as one with tighter integration. Here again, there has been little noise in this space although CPQ's ENSA architecture gives some hints. In 1999 there will be increasing solidification of the SAN standards, with IBM and CPQ taking the lead. The trade press has noticed and endorsed the shift of multi-vendor storage to SANs, for example there was a piece on this in last week's computerworld highlighting CPQ's wins in this space. CPQ and IBM intend to bring out systems which integrate best in a family (i.e. CPQ storage products will work better than anyone else's with CPQ and will work well with IBM and SUN) and which have performance and manageability which equals EMC, SUN or any other storage vendor in the general space. This will make it very hard for EMC to compete on anything but price, and they have not traditionally been a low-price choice. >> jhg