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Strategic Vendor Series: HP

Hewlett-Packard Co. (HP) has had a lot to say about its leading market share in certain parts of the storage market in the past year, but noticeably less to say about how it plans to keep this spot. In recent weeks, however, the company has begun to address this problem.

According to International Data Corp.'s market share stats released in September, HP held the No. 1 position in worldwide disk storage systems factory revenue with a 23% share. But just a month earlier, the computer giant reported that its online storage revenue, which includes the midrange Enterprise Virtual Array (EVA) product line and XP high-end arrays, was down 23% year over year. The tape business was down 16% over the same period.

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HP fired a handful of customer-facing sales execs responsible for this business, and in an effort to rekindle enthusiasm for its products among its installed base, unveiled its grid storage strategy at its recent user show in Houston. The "vision" received mix responses from users who seemed to be more interested in what HP has planned for its current EVA product line. There's still no word on that.

Still, there is a light at the end of the tunnel in the form of the company's new RISS archiving system, which gets a big thumbs up from most analysts. This product competes with EMC's Centera product and IBM's Retention 450 system.

The HP StorageWorks Grid Architecture, which RISS is based on, is a set of commodity "cells" (processor, cache, storage) that can take on different personalities (NAS, block, archival, backup target) based on software services that can be loaded onto each cell. Each cell is aware of the others so they can share I/O and load balance across domains, and they can be reconfigured on the fly. "While it's slightly complicated," said Nancy Hurley, senior analyst with the Enterprise Strategy Group, "the bottom line is the grid architecture provides a flexible, dynamic, intelligent architecture that easily, and cost effectively, scales."

Hurley adds, "The question is how well HP executes on this -- that will be the difference moving ahead. No other storage vendor has a solution like this, and although IBM has talked of it, and Sun has also made some hints, this is not something that is easy to copy -- HP will have an edge. Again, it's about execution." But by all accounts, that hasn't been HP's forte of late.

The success of RISS might also help HP cast off the niggling doubt in many users' minds that HP is really a server company that also sells storage. The recent rebranding of its NAS product line to include the Proliant server name adds more fuel to that fire.

For a more detailed look at HP's strengths and weaknesses, check out what Enterprise Strategy Group's senior analyst Tony Asaro and The Evaluator Group's Randy Kerns have to say below.

In which areas is HP strongest?

Tony Asaro: HP now has a strong story from the low end to the high end. The HP MSA is a leading low-end storage solution that offers excellent price/performance. The HP XP 12000 is built on Hitachi technology offering an extremely scalable, feature-rich storage system for Enterprise-class customers. HP also has done well in the market with its midrange solution, the EVA. The EVA is easy to use and manage. Additionally, the EVA is one of the few storage systems that offer switched connectivity to its disks, which offers greater performance.

Randy Kerns: HP is strongest with the low-end storage solution packages they have with Proliant servers that include the MSA family. They are also strong with their loyal customer base by carefully paying attention to their requirements.

In which areas is HP weakest?

Asaro: NAS and storage management. HP now has an object-based solution with RISS but it is fairly new, and HP's ability to sell this product is to be decided. While the EVA is doing well, it still has limited Fibre Channel connectivity and cache memory support. The customer's perception may be that competitive products are more scalable and provide higher performance for certain applications.

For HP, it is really an execution issue. It is quite public that HP's storage division has been struggling. In spite of this, it does still have a rich storage business, but I believe the market expects more from them.

Kerns: HP has not taken advantage of opportunities in the mid-tier and higher market with the EVA, and solutions that would include integrated management software, advanced storage system features and continued improvements on the EVA. This is a competitive area and a market segment that is expanding quickly.

What is HP's strategic direction?

Asaro: HP is focused on its grid vision. This is an exciting idea and could really change the storage landscape.

Kerns: The RISS system is really a preview of what the future holds for HP storage systems.

Where does HP have an edge over its competitors?

Asaro: HP is a total solutions provider with loyal customers. It has a good brand name with the small and medium-sized businesses market as well.

Kerns: HP has a loyal customer base, which is of great value. They are well known and have a long-term vision.

In which markets is HP most challenged in terms of growing or maintaining its market share?

Asaro: HP has struggled in the last few years and given its size, brand and customer base, it should be doing better. An advantage HP has over its competition (with the exception of IBM) is it is a total solutions provider. However, this can be a disadvantage as well -- HP may not have the focus or core competency to sell and market its storage solutions as well or as aggressively as it could and should. In the end, it is all about execution out in the field.

Kerns: The challenge is in the mid-tier and above in the area served by the EVA today. It will be a challenge to expand the market there with the fierce competition.

HP in the news

Five questions with HP's storage chief
Storage Clips: HP offers low-cost NAS iSCSI device
SNW '04: SAN-in-a-box for under $10K
Storage Clips: Hitachi and HP offer 300 GB drives; NetApp issues security advisory
HP 'grid vision' has users scratching their heads
Banks put HP archiving appliance to the test
HP storage sales tank
HP drops midrange prices

This was first published in November 2004

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