IBM and Compaq unite

Posted on August 01, 2000

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Analysis

By Richard R. Lee

In a potential threat to EMC, IBM and Compaq last month announced an agreement to resell each other's storage software and devices (including IBM's "Shark" Enterprise Storage Servers and Compaq's StorageWorks arrays) on an OEM basis. The two companies also established a commitment to work closely together to ensure interoperability between their products, while jointly cooperating on the development of standards for the storage area network (SAN) market.

"IBM and Compaq have a shared vision in how to solve the problems that our customers are bringing to us," says Linda Sanford, general manager of IBM's Storage Subsystems Division. "We would certainly welcome others to join our efforts to define and promote industry standards."

The agreement is designed to eliminate many end-user concerns about SAN standards and vendor interoperability. Accord-ing to International Data Corp. and other research firms, some 80% of end-users surveyed rank the requirement for SAN standards as the number-one criterion that must be satisfied in order to ensure the rapid growth of SANs.

"The most strategic value of the joint venture is the fact that as a team Compaq and IBM can act as the facilitators of interoperability for SANs," says Darren Thomas, vice president of multivendor storage at Compaq.

In an effort to maintain their leadership positions in the enterprise storage market (EMC, Compaq, and IBM hold the top three market shares), Compaq and IBM have decided to collaborate on the planning and development of SAN standards in the areas of virtualization, security, and other critical areas. On the software front, Compaq will resell products from IBM's Tivoli division, while IBM will resell Compaq's VersaStor storage virtualization technology. And the two companies will cooperate to ensure interoperability between their SAN management products.

Analysis

This level of cooperation may bode well for end users, because the flow of industry-generated SAN standards has virtually dried up. At the same time, many vendors have taken the path of trying to create de facto standards around their proprietary technology, doing an end run around industry associations.

Dismissed as a marketing ploy and "a sign of dual desperation" by EMC and others, the IBM-Compaq agreement may have significant implications for the future direction of the SAN market and the major obstacles to widespread adoption of SANs. The IT analyst community stepped forward in force to endorse the agreement. For example, Gartner Group's Nick Allen called it "a winning combination for all parties" and said "IBM and Compaq are working to build the necessary bridges for their SAN solutions to be successful."

Both companies are investing heavily in the partnership, with joint investments expected to top $1 billion. Storage and SANs are at the top of the priority list for both IBM chairman Lou Gerstner and Compaq CEO Michael Cappellas. This gives both IBM's Linda Sanford and Howard Elias (vice president and general manager of Compaq's storage division) the support that they need to accomplish the heavy lifting required to bring this deal off.

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Linda Sanford
General manager of Storage Subsystems Division, IBM

Originally published on .

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