Increased competition from vendors such as EMC Corp., Network Appliance Inc. and Compaq Computer Corp., as well as demand from customers for better storage management software and services instead of hardware, is pushing IBM to rethink its strategy in the months and years ahead. Linda Sanford, senior vice president and group executive at IBM's Storage Systems Group, spoke this week with Computerworld about future products and rumors that Big Blue may be looking to purchase EMC.
Q: What are customers telling you they want?I spend 50 percent of my time with customers. ... It doesn't matter what customer I speak to, in whatever far place of the world or whatever industry. I consistently hear these same top two business issues. The first one is obviously cost, cost, cost. Everyone is focused on, "How do I reduce costs? My budgets are being slashed. I need to show significant savings and efficiency here." The second one is all around, "How do I make available and ensure the availability of and accessibility to my information?" And further, I think -- heightened by the events of Sept. 11 -- disaster recovery solutions and the like are very high on the customer's minds.
Q: So what is IBM's strategy to address that?There are two major shifts going on in the industry. The first one is a shift of storage to the network. This is driven a lot by the customer issues I've talked about. Customers are trying to get their arms around all this data. They're trying to manage it in a more cost-efficient way.
"Now that I have got it all on the Net, how am I going to manage all of that? I hope I don't have to have 15 different monitors to manage it." And, that's where storage software comes into play.
The two cornerstones of our strategy are built on, No. 1, continuing to build world-class products, be that disk, tape, software, services, financing offerings; and No. 2 is the fundamental principle that the world of storage networking must be built on open industry standards.
With that shift, though, the second major trend is the value proposition. We're shifting into the software and service management mode.
Q: So what's going to differentiate you from the other storage players?The sheer number of patents we have in this space. We have nearly 3,000 in total. We added another 35-plus this past year. A lot of it is around the storage software space that we announced and talked about last week. That's one key differentiater.
The second differentiater is the fact that we do go to market with integrated solutions -- integrated not just across storage, and that's one form of integration, but across the breadth and depth of IT elements. So servers and middleware and our services, everything from consulting to outsourcing.
Q: Is there any interest by IBM in buying EMC?We never comment on rumors. But just think about this: First of all, you know we are fierce competitors. And No. 2, philosophically, we have a very different approach to the storage business.
We started out Day 1 with our re-entry into storage, back two, two and a half years ago, with a very open approach. I know IBM hasn't always been open, but I tell you, the worst sinners are the best repenters. We clearly have been on, for many years now, an open path across IBM, whether that's Linux or what we're doing with storage. It's all been in the name of openness. And, EMC has been down a very proprietary path. Still are today. Widesky is still very proprietary.
Officially, we have no comment on rumors, but I can't even fathom something like this.
Q: What effect is the merger between Hewlett-Packard Co. and Compaq going to have on the storage marketplace? Does this bring a stronger player, or a company without immediate direction?}There is going to be a period of time where they have to sort through their current product portfolio. Each of them [has] unique ways of addressing storage. I think that will take time to sort that out. In the meantime, it leaves things up in the air, and that's distracting from the customer's point of view.
Customers can't wait, unfortunately. Fortunately for us, we're here to help them out during that period of time.
Q: Are you focusing more attention on services?I think that's something we've been in the process of doing for the last several years. I don't think it's a change. It's a natural evolution where we see the market and the customer pulling us....
So it's different from saying we're moving to a services-only business and products go away. It's a services-lead business [that] understands business issues of customers and can bring products ... ours and our competitors, together to solve those business problems.
It's different from saying we're moving away from products to service market. It's a service-lead model.