Article

IBM slashes price to win EMC customer

Beth Pariseau
IBM announced today that ShopKo Stores Inc., a chain of drugstores based in Green Bay, Wis., and a former EMC Corp. customer, had become the 2,000th customer for its SAN Volume Controller (SVC) virtualization

    Requires Free Membership to View

product, with a large order that also included disk array and tape products. But while ShopKo cited some technical reasons for going with IBM's product over EMC's, the fact that IBM sweetened the deal with a "more than competitive discount" didn't hurt, either.

Ray Petersen, vice president of operations and technologies for ShopKo, declined to divulge the terms of the deal but said it had been offered by IBM "because it was a large deal, it was replacing a competitor, and it also occurred at the right time of the fiscal year from IBM's standpoint."

The company had also had some IBM disk in its environment and used Tivoli Storage Manager as its backup software, but "in terms of terabytes on the floor, we were a mainly EMC shop," Petersen said.

EMC plots appliance strategy

EMC users iron out software bugs

EMC Clariion users make wish list

User connects EMC Clariions over Cisco for DR

ShopKo originally began to look for new disk arrays to replace old equipment, including three IBM F20 arrays and EMC Symmetrix 5700 and 3930 arrays. The maintenance costs for the aging products were rising by the year -- Petersen estimated that replacing older products with newer ones would save him some $2 million over the next four years.

Initially, Petersen became interested in IBM's equipment because of the relative maturity of SVC, which has been on the market for three years. —Petersen said he watched it for two before deciding it was "ready for prime time." EMC's Invista virtualization product, meanwhile, shipped in Dec. 2005.

He also said he liked the way SVC would let him license certain storage services, like replication and snapshots, on a per terabyte basis rather than having to buy the service for an entire frame.

Petersen said ShopKo purchased a DS8100 and DS4800 array, and an IBM 3484 tape library with a high-availability option. ShopKo also bought Tivoli Productivity Center Version 3 management software, which will be installed this quarter. The disk arrays replaced the older disks in a pool of storage between his 250 production servers and tape library backup. He estimated the newer disks improved his backup about 60% -- from one hour for a particular application to around 14 minutes.

Still, Petersen said, it had been a struggle to get some in his shop to accept the SVC.

"We had a debate for quite a while of in-band vs. out-of-band virtualization," he said. "It's a religious war that continues today. But we haven't seen a performance impact from running the virtualization in-band."

He said now that it has been installed, most of his technicians have grown more comfortable with it. He added, "We move data around between classes of storage all day with no pain" -- a remark that's enough to make any EMC sales representative wince. Creating tiers or classes of storage are key EMC messages.

EMC and IBM: Two can play at this game

ShopKo will probably not be the last customer to benefit from new product and pricing wars emerging between the two industry titans. EMC has made no secret of the fact that it wants to be more like IBM, continually striving to be (and, more recently, boasting that it is) a software and services company. EMC said at its EMC World yearly conference last week that it now gets 54% of its revenues from those business units, rather than storage hardware. And the week before that, EMC launched a managed services unit.

For its part, IBM acknowledged that EMC was edging into its markets but more recently, has vowed to push back with the recent release of the Venom storage compression feature for its new DB2 launch this month. In a statement sent to press, IBM wrote that venom was specifically meant to "attack …a new target -- storage hardware competitor EMC."

The letter added that in general, "IBM's information management software business is going after EMC, which, due to its recent acquisition of software companies like Documentum, is increasingly competing against IBM in software, not just storage hardware."

"There is always that lever all companies can try to pull and that's to drop prices to the floor," said EMC's director of public relations Michael Gallant. "But from an overall business perspective, we've never actually been positioned better to compete broadly, not just with IBM but other companies as well."

IBM, at last count, still had multiple times the size and revenue stream of EMC. But there are signs EMC is growing; among them a recently revived plan to build a 2.2 million square-foot office and 445-acre research campus on the Southborough-Westborough border in Massachusetts, a plan EMC put on the back burner six years ago after its sales declined.

Related Topics: Storage vendors, VIEW ALL TOPICS

There are Comments. Add yours.

 
TIP: Want to include a code block in your comment? Use <pre> or <code> tags around the desired text. Ex: <code>insert code</code>

REGISTER or login:

Forgot Password?
By submitting you agree to receive email from TechTarget and its partners. If you reside outside of the United States, you consent to having your personal data transferred to and processed in the United States. Privacy
Sort by: OldestNewest

Forgot Password?

No problem! Submit your e-mail address below. We'll send you an email containing your password.

Your password has been sent to: