Merger Musings

With the merger of Hewlett-Packard and Compaq all but a done deal, it's going to be very interesting to see the combined company's approach to storage.

Both companies are major storage vendors, because it's traditional for customers to buy their storage from their server vendors unless there's a good reason not to. While both companies have significant installed bases for their storage products, HP mostly re-sells Hitachi gear, while most of Compaq's is homegrown technology. It will be enlightening to find out what they feel is their most significant value proposition for customers in the storage realm.

Keep in mind that HP CEO Carly Fiorina will be the CEO of the new company, which is being called the "new HP." Compaq CEO Michael Capellas will be president. Also, existing HP shareholders will get almost two-thirds of the stock of the new company, while Compaq shareholders get the rest. Interestingly, the person tapped to lead the combined company's $23 billion IT infrastructure business - including servers, storage and software - is Peter Blackmore, currently Compaq's executive vice president of sales and services. Recently named as one of Blackmore's direct reports is Howard Elias, who will head up the network storage group. Elias previously was senior vice president in Compaq's business-critical server group.

Of course, some of their product lines will crossover so the company will need to discuss an integration strategy for their respective products and then deliver on this strategy ASAP. I've heard from one customer who considers HP and Compaq to be off his storage preferred-vendor list until he knows more about what's going on, and I'm sure he's not alone. The companies have had a large team working on these issues, across all their product lines -- not just storage -- from the time the merger was announced in September 2001.

They have already offered a few hints. From a FAQ on Compaq's site about the merger, they say some things specifically about storage:

"Compaq and HP both view storage as a strategic growth opportunity.

We believe in the future of networked storage, and we have invested in virtualization software to make it a reality. We also have some of the best storage engineering capabilities in the industry. Strategically and technically, our programs are highly complementary. We will continue to accelerate growth of this segment."

Further, Compaq promises a "continuing commitment" to its Enterprise Network Storage Architecture (ENSA), and "minimum" of three years of maintenance support for products that are nixed because of the merger.

In some cases, that will extend up to seven years. You can read the FAQ, which touches on general information as well as all product lines, at: http://www.compaq.com/newsroom/presspaq/090401/qa_customer.htmlIn the meantime, HP has enhanced its StorageApps virtualization device with what it says is better hardware redundancy, replication features and support for Linux, the EMC Symmetrix and Compaq StorageWorks arrays. Called the SV3000, it also supports iSCSI and sports a price tag of $125,500.

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