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HP forges alliances to boost storage clout.

Company: Hewlett-Packard

Products: XP/SureStore series (hardware), FSAM, OpenView, XP CommandView (software), and DLT and LTO Ultrium (tape drives).

Top executive: Nora Denzil, VP and general manager, HP Network Storage Solutions Organisation

Key financials: HP does not break out storage revenue, but in 2000 the company as a whole recorded net income of $3.6 million, on revenue up 15% at $48.8 billion.

Infoconomy opinion: HP's decision to continue to buy-in its high-end storage was prescient given the intense competition engulfing the sector. However, CEO Carly Fiorina's avowed strategy of concentrating on services may preclude further expansion in storage.

When Hewlett-Packard's (HP) acquisition of rival Compaq is finally completed, the company will be just a fraction smaller than IBM, the world's biggest hardware vendor. Yet, unlike IBM, HP relies heavily on reseller agreements to fill out some of the most valuable sections of its storage line-up.

This is especially the case in the lucrative area of high-end disk storage systems, a sector characterised by intense competition from only a handful of vendors. Here, HP resells Hitachi Data Systems (HDS) Lightning systems through an agreement that was set up in May 1999 and extended, for a further three years, in July 2001. But in the mid-range disk system sector, HP has chosen to develop its own in-house range, SureStore XP.

HP is also heavily reliant on third-party suppliers in its tape storage business, licensing digital linear tape (DLT) drives from Quantum in the mid range, and a company called Benchmark at the low end. HP offers drives that comply with two of the main standards - or 'flavours' - of tape, including Linear Tape Open (LTO) Ultrium-based drives - a technology it helped to develop and now builds in-house.

On the software side, HP has developed proprietary code to ensure that its own SureStore series machines, as well as systems from other vendors, conform to its Federated Storage Area Management (FSAM) plan. FSAM focuses heavily on storage virtualisation, a technique that allows managers to view and manage storage units as one heterogeneous pool. Central to this strategy was HP's $350 million acquisition of virtualisation software vendor StorageApps in July 2001.

This strategy ties in neatly with HP's existing storage and systems management software business, which is sold as XP CommandView - a specific management console for HP's own storage systems - and OpenView, which offers modules to handle more general functions, such as back-up and hierarchical storage management (HSM).

HP's product line-up in storage is strong, but its reliance on partnerships, as well as CEO Carly Fiorina's heavy focus on services, may preclude further investment in this area for the merged company.
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Article Details
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Publication:Information Age (London, UK)
Article Type:Brief Article
Geographic Code:4EUUK
Date:Oct 10, 2001
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