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SCMP Reporter

Hitachi Data Systems (HDS) is turning up the heat on rival EMC, claiming it has been spurned by Sun Microsystems as partner for a global distribution alliance of enterprise storage systems.

EMC denied the claim, indicating HDS might be dumped by Sun.

These latest broadsides from HDS and EMC come two weeks after Sun and HDS announced a three-year joint distribution agreement involving high-end storage systems.

EMC has since picked apart the deal in a move that could sow confusion among potential Sun and HDS customers in the US$50 billion global storage-systems market.

However, HDS vice-president Greg Cornfield alleged EMC's posturing against the alliance as plain 'sour grapes'. Mr Cornfield said he had to ask Sun's permission to divulge the story behind its partnership with Sun.

'There was competition involving Hitachi, EMC and some other enterprise storage vendors for the Sun alliance. Our Lightning system bested the other vendors' products in comparisons and Hitachi was selected by Sun as its partner,' he said.

He claimed Sun's inability to offer, on its own, a high-end storage system made it rethink its storage strategy several months ago and draw up plans to resell another vendor's product.

'If EMC had won the Sun deal, the company would surely tell a different story,' Mr Cornfield said.

EMC criticised the Sun-HDS alliance as a non-event and questioned the interoperability of the two companies' storage systems.

Sun will resell HDS' Lightning Freedom Storage 9900 system under its StorEdge 9900 brand.

The two companies will still compete in the mid-range storage arena, with Sun's StorEdge T3 Array going against HDS' Thunder series. They also will cross-licence and distribute each other's storage software.

A recent report from Wall Street financial adviser AG Edwards & Sons said the Sun-HDS deal threatened EMC's 40 per cent share of the worldwide market for external storage systems attached to Sun's Solaris servers.

Tom Zack, EMC's vice-president product marketing and management in the Asia-Pacific, Latin America and Canada, said the threat stemmed from the larger sales force that would sell HDS' high-end storage systems against those from main competitors EMC and IBM.

HDS' 700 sales people worldwide would be backed by Sun's 11,000-strong global sales team.

Rivalry between EMC and HDS in the high-end storage systems arena increased in 1999, when Hewlett-Packard dumped its re-seller agreement with EMC and tapped HDS to supply it with its high-end products.

Donald Swatik, EMC's vice-president for global alliances, initially said he had no knowledge of the competition for the Sun alliance that Mr Cornfield claimed took place.

He then denied the story altogether, claiming EMC did not entertain deals similar to that which Sun forged with HDS.

Using figures released by Dataquest, Mr Swatik said EMC had distanced itself from its competitors by a wide margin.

Last year, EMC bolstered its lead in the information systems storage market with a 34.6 per cent market share. Dataquest said for the second consecutive year, EMC's revenue share of the external storage systems market exceeded the combined shares of Compaq Computer, IBM, HP and Sun - the next four largest storage systems vendors and four largest server vendors.

'The perception that Hitachi has been trying to make over the past few years is it was gaining market share from EMC, but market figures show it has not done so,' Mr Swatik said.

He warned HDS about being too confident in the stability of its relationship with Sun, citing an incident when IBM dumped its re-seller deal for high-end storage systems with StorageTek a few years ago.

'IBM was developing its own high-end storage systems, while it was re-selling StorageTek's machines. We see Sun's deal with HDS as a stop-gap measure before it launches its own high-end storage systems,' he said.

He said Sun chief executive Scott McNealy was quoted saying about storage acquisitions last May that Sun 'was not going to be a re-seller'.

'We are a products company. We do not take commissions on somebody else's R&D,' Mr McNealy was quoted as saying.



Hitachi claims EMC attack is 'sour grapes'