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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