Article

HP storage systems gain ground on competitors

Dave Raffo

Hewlett-Packard Co.'s earnings report from last quarter showed companies are still spending money on storage, and more so on HP's storage systems than those of its major competitors.

HP Monday night reported its storage revenue increased 13% since last year, with its midrange EVA array revenue up 16% and its high-end XPS system up 9%. HP's storage revenue for the quarter totaled $1.147 billion.

"We did very strong in the storage business," said HP CEO Mark Hurd on the earnings conference call with analysts.

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Financial analyst Aaron Rakers of Wachovia Capital Markets pointed out that HP gained market share on EMC in the midrange and high end last quarter, although HP's quarters start and begin a month later than EMC's. EMC's latest results showed its midrange Clariion revenue growing 12% and its high-end Symmetrix about the same as last year.

"We believe HP's results continue to provide comfort that the storage space remains a more resilient piece of the overall enterprise IT hardware spending," Rakers wrote in a note to clients on Monday.

HP's results also compare favorably to its other major storage competitors IBM and NetApp.

Hurd also pointed to new storage products coming, including its 9100 Extreme Data Storage System (ExDS9100) NAS box for Web 2.0 companies and iSCSI SAN systems from LeftHand Networks. HP expects to close its $360 million acquisition of LeftHand next month.

Hurd referred to LeftHand and Extreme storage when he talked about a "radical move we're trying to make in storage, bringing a more industry-standard approach to storage."

The call left questions unanswered about HP storage, though. HP gave no results for its storage software, tape or its fledgling data deduplication-based virtual tape library (VTL) products, and the call made no mention about its storage roadmap.

EMC has already increased the stakes in the midrange, launching its Clariion CX4 in August with features HP's EVA lacks, such as support for solid-state drives, thin provisioning and disk spin-down.

Despite a good quarter for storage and its overall business, Hurd says HP hopes to trim $1 billion in spending next year. "The market is getting tougher and less predictable," Hurd said. He said HP will reduce travel and hiring, and shut down some sites during the holiday. "We are eliminating all costs that are not core to the company's success," he said.

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