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HDS Moves to Broader Base With Channel for Storage, NT, Unix.

Hitachi Data Systems Ltd in the US is broadening out its distribution strategy as it shifts from a mainframe shop into a Windows NT and Unix systems house and storage company. Earlier this week the company signed up the first distributors in its history, in the shape of Arrow Electronics Inc's Gates/Arrow Distributing arm, Tech Data Corp and Wyle Systems Inc. It says more partnerships will be announced later this year across the world. Hitachi also launched its ChannelOne marketing program for VARs.

Santa Clara, California-based HDS was originally set up by Hitachi Ltd and Electronic Data Systems Corp to sell and service Hitachi mainframe and storage product lines, and almost immediately acquired National Advanced Systems Inc from National Semiconductor Corp. Back in February, Hitachi bought out EDS's share of the venture on undisclosed terms, and also transferred its 90-strong Hitachi PC Corp division into HDS (CI No 3,587, 3,593). The parent company provided $300m in cash to help transform HDS into a full-blown desktop to mainframe services and systems house at the same time. In April, the company announced partnerships around which it plans to build a storage area network strategy for its 7700E disk arrays. And in May, Hitachi won Hewlett-Packard Co as a customer after HP's alliance with EMC Corp fell apart (CI No 3,655).

Gates Arrow has HP-UX and AIX experience and Wiley Systems has been successful with Digital/Compaq Alpha systems, Hitachi said. TechData, best known for its PC sales, was chosen "after months of discussion" after it said it planned to move beyond the volume model to sell into Hitachi strategic markets such as storage area networks and ERP. Additionally, HDS has appointed seven "direct VARs" to concentrate on storage systems for Fortune 1000 companies using Unix systems. HDS named only one of the direct VARs - Datalink Corp - but said they were selling to HP, Sun, AIX and Unisys customers. It plans to appoint around ten direct VARs in total.

Hitachi says the new channels will complement its direct mainframe sales operation and OEM business with high-end NT and Unix sales, and expand its customer base from the Fortune 500 to Fortune 2500 companies. It will sell its VisionBase 888OR PC servers and Freedom Storage 5800 products through the channel initially, with SANs and other offerings introduced later. Within three years it expects channel-based sales to account for 70% of total HDS revenue. Some 90% of non-mainframe sales will go through the channel, and with storage sales currently outpacing server sales by three to one, it expects between 60% and 70% of sales to be of storage systems.

Only a limited number of distributors, direct VARs and tiered VARs will be appointed, said Hitachi. The ChannelOne VAR program is intended to provide support for VARs looking to do business with HDS and its distributors, and for end users to do business with the channel, and includes a set of marketing programs, a partner extranet, demos, evaluation units, training and an account team. Meanwhile, Hitachi is in the process of re-working its OEM deals - it currently has relationships in place with Sequent Computer Systems Ltd and Groupe Bull.
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Publication:Computergram International
Geographic Code:1USA
Date:Jul 23, 1999
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