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IBM and Compaq join forces in $1 billion storage networking initiative

Two of the storage industry's biggest storage players have paired up in a deal that could exceed $1 billion. Compaq Computer Corp. and IBM today outlined a strategic agreement that they claim will ensure seamless interoperability between their storage products while simultaneously advancing storage networking standards across the industry.

Compaq and IBM say that they will work together toward driving interoperability between their respective software and hardware products and will share their combined know-how with the other storage vendors to try and speed the acceptance of industry standards for storage networking. The ultimate goal of which, they say, is to accelerate customer acceptance of open storage networking solutions and to sell significant products from each other's storage portfolios.

Under terms of the deal, Compaq will augment its portfolio with IBM's Shark Enterprise Storage Servers and select Tivoli systems management software. In turn, IBM will incorporate Compaq StorageWorks Modular Array storage systems and software into its portfolio, which will include IBM 10,000 RPM hard disk drives.

But according to an industry analyst, the sheer magnitude of this deal between the storage giants may cause some to conveniently forget the past and present friction between Big Blue and Compaq.

"My first look tells me that IBM wins," said Steve Duplessie, analyst for the Enterprise Storage Group, Milford, Mass. "Shark has no share in NT or Solaris environments, but StorageWorks does. StorageWorks will never be a contender in large-scale IBM shops, so I'm not sure what real benefit Compaq has." Duplessie speculated that Compaq might get to see opportunities from IBM's open operating system AIX, but doubts that IBM will stop pushing SSA (Serial Storage Architecture) in the mid-market.

Duplessie also said "I see IBM winning again as Compaq dumps Veritas and Legato in order to take on ADSM (Tivoli). IBM also gets Compaq VersaSor virtualization technology."

Duplessie contends that there is a lot of potential for future friction between the newly allied companies. "At first pass, it seems both these guys were better on their own. When does the IBM rep sell SSA versus Compaq, or the Compaq guy sell Shark versus StorageWorks?" he said. "Now both have to compete with Legato and Veritas."

Doug Chandler, storage analyst for International Data Corp., Framingham, Mass., sees the main message of this announcement being IBM's continued aggressive strategy that views services as a business, as opposed to Compaq, that views services as something to "wrap around" their product offerings. "IBM will be doing most of the servicing. There's no defined role for Compaq Services that they could articulate," said Chandler.

Chandler also said that this partnership will have an effect, one way or another, on the storage utility market and companies like StorageNetworks, Inc. Chandler said, "If Compaq and IBM can improve interoperability, it may have some incremental benefit for storage utility companies like StorageNetworks. On the other hand, if it gets noticeably easier to install and integrate SANs at customer sites, part of the positioning of the storage utility alternative taking the complexities of storage integration and management off of customers' hands goes away." He said that the difficulty of installing SANs is one of the primary marketing pitches from storage utility firms.

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