EMC says it's still major storage provider to Wal-Mart

EMC is saying that reports claiming IBM has displaced them at Wal-Mart is greatly exaggerated.

EMC said reports that retailer Wal-Mart will replace EMC storage systems with IBM's Shark storage system are greatly exaggerated. In fact, EMC said that even after this contract is in place, Wal-Mart will still store more than three times as much data using EMC systems than IBM.

"Wal-Mart is an important customer and continues to invest in EMC systems," said EMC spokesperson Greg Eden. "A few of our older systems were replaced, but on a whole, EMC is still Wal-Mart's primary storage provider. We definitely have not been displaced."

According to reports from Reuters and the Wall Street Journal on Monday, Wal-Mart will deploy Shark storage arrays and z900 mainframes to handle its data processing, debit and credit transactions, reconciliation and product replenishments. The agreement is part of a larger mainframe and services deal IBM secured with Wal-Mart last March.

Wal-Mart's data-center operations serve more than 4,000 Wal-Mart stores, including Sam's Club wholesale stores.

The contract, said to be worth an estimated tens of millions of dollars by analysts, will supplant some of Wal-Mart's previous deals with EMC and Hitachi Data Systems.

"This agreement does replace both EMC and Hitachi products," said IBM spokesperson Chris Andrews. He pointed out, however, that while this deal is an indication of the growing dominance of the company's Shark storage system, there was never a claim made by IBM or Wal-Mart "that any competitor was outright removed."

"On the other hand," Andrews said, "it's a big step for us -- having our technology a more critical part of Wal-Mart's data center."

However, EMC argues that the storage segment of that deal is just a small part of Wal-Mart's overall storage infrastructure. According to EMC, IBM bundled the storage into what was primarily a mainframe and services deal enabling it to sell the storage at a deep discount and that it was a decision based on acquisition cost, not total cost of ownership.

Evaluator Group analyst Randy Kerns said that this back and forth between IBM and EMC is a marketing-hype game. "Every time an agreement [of this magnitude] is made companies make a big deal about it. And, if it's at the expense of a major competitor, even better. When there's a counter claim, it's just to mitigate. This is really common among fierce competitors."

"IBM had to do this because EMC has been the incumbent. EMC is now showing they are still the incumbent," he said.

For more information:

EMC chief defends sales force

Webcast: Follow the leader (Joe Tucci, EMC)

Webcast: IBM's storage plans (Linda Sanford, IBM)

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