Compaq and IBM Alliance for Storage

  • Written By: R. Krause
  • Published: August 3 2000

Compaq and IBM Alliance for Storage
R. Krause - August 3, 2000

Event Summary

[Source: IBM Press Release]

In July, Compaq Computer Corporation and IBM announced a strategic agreement to accelerate customer acceptance of open storage networking solutions. Both companies are committed to interoperability of each company's storage hardware and software, and will also sell significant products from each other's storage portfolios. The total of investments currently planned by the companies could exceed $1 billion.

Compaq and IBM will cooperate to help ensure their storage products work seamlessly together. Further, the companies will share their knowledge with the industry to help create standards for open storage networking solutions such as Storage Area Networks (SANs), making storage networks more flexible and easier to deploy and manage.

"With the explosion of e-business and consumer demand for anytime-anywhere products and services, storage plays an increasingly vital role in our customers' Internet infrastructure," said Howard Elias, vice president and general manager of Compaq's Storage Global Business Unit. "This agreement assures both companies' customers a complete portfolio of critical storage technologies that will work seamlessly with future Compaq and IBM products."

Both companies commit to driving interoperability with their respective software and hardware. Under terms of the deal, Compaq will augment its portfolio with IBM's "Shark" Enterprise Storage Servers and select Tivoli systems management software. IBM will augment its portfolio with Compaq StorageWorks Modular Array storage systems and software, which will include IBM 10,000 RPM hard disk drives. IBM will support Compaq's VersaStor technology for storage SAN-wide virtualization.

Each company plans to provide equipment, software, and staffing to support each other's open storage networking/SAN customer centers. At these centers, customers can see for themselves the interoperability of both companies' technologies and products where real-world testing demonstrates the value of open storage networking solutions.

Market Impact

As with most agreements of this nature, this has many areas for discussion: Which of these companies is the "winner"? We believe Compaq comes out slightly ahead. We believe there is a bigger sales potential for Compaq's storage sold through IBM, than for the converse. (Compaq is providing the higher-volume components.) In addition, they have access to Shark, thus rounding out their very-high-end offerings.

Will customers benefit? Yes, by eliminating (or at least reducing) the need to choose between IBM and Compaq for their storage needs. (This does not obviate the choice between EMC and IBM/CPQ, however.) Both companies have strong product offerings, one-stop shopping for both is a consumer plus.

How will the companies benefit? Relatively easy access to products they might not otherwise have, thus reducing development costs - although a $1 Billion investment is certainly not "chump change".

Should EMC and Sun be concerned? Not really from a product standpoint. Sure, any combination of two large, strong competitors is not good news for the others. However, EMC need not panic - at least not until they start losing bids to the IBM/CPQ duo. The greater potential problem for EMC is IBM and Compaq creating a de facto SAN (or SAN-like) standard. If the "standard" doesn't quite line up with EMC's wishes/strengths, but the market accepts it as a standard, then EMC could come out the loser.

Does this mean IBM and Compaq think they can't beat EMC by themselves? We think that's more likely than not. Alliances like this don't normally spring up because Company A really really really wants to work with Company B.

Did the word "synergy" appear in the press release? Thankfully, no.

User Recommendations

In the short term, Compaq storage users gain access to IBM systems, and vice versa. This is (potentially) very good for them.

In the medium and longer terms, the potential of the VersaStor technology is intriguing, and may be the biggest gain for users. Although it may take a couple of years to realize the potential fully, it's certainly something all enterprise storage users will find valuable.

Potential customers should not overlook EMC, Sun, or any of the other serious storage vendors. Although the IBM/Compaq promise is alluring, customers still need product today, and EMC is still a leader.

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