Wal-Mart taps IBM for mainframe/storage project

Wal-Mart Stores Inc. will be rolling out a multimillion-dollar mainframe consolidation and storage expansion project using IBM Corp. systems that analysts say is a boon in Big Blue's struggle against storage market leader EMC Corp. and others.

The project, which industry experts estimate will cost US$30 million to $50 million, will use IBM's newest z900 mainframes to replace an existing IBM S390 architecture related to Wal-Mart's core business systems, which deals with the creation of invoices, items and payrolls. The Bentonville, Ark.-based retail giant is installing an IBM Shark server with 50TB of data storage capacity.

Wal-Mart spokesman Tom Williams said the company "hasn't named any suppliers [it's] replacing."

"We've had a storage area network [SAN]. This just upgrades and consolidates it considerably," he said, adding that the project is expected to begin soon.

Even so, an IBM spokesman, Glenn Hintz, said IBM is replacing EMC and Hitachi in the central data center operations.

The contract comes at a time of extraordinarily fierce competition between IBM and storage competitors EMC, Hitachi Data Systems Corp. and Sun Microsystems Inc. It is also a turnaround of sorts for IBM's Shark Enterprise Storage Server, which until recently had performance problems, analysts said. IBM touted the deal in an announcement on its Web site.

Wal-Mart's worldwide data center serves more than 4,000 Wal-Mart stores, including Supercenters and Sam's Clubs. EMC spokesman Greg Eaton said Wal-Mart is still a big user of the Hopkinton, Mass storage vendor's Symmetrix, Clariion and Celera storage systems for its SAN.

Arun Taneja, an analyst at The Enterprise Storage Group Inc. in Milford, Mass., said the win for IBM is indicative of a turnaround for its Shark server.

"Early information we were getting from the field was that Shark's performance was horrible and it couldn't grow capacity beyond a certain point," he said. Those problems have apparently been ironed out, Taneja said.

"The IBM Shark and eServer z900 have given us a significant improvement in our processing time, in some cases allowing us to cut our processing time for some jobs by more than half," said Dan Phillips, vice president of technology support and operations at Wal-Mart.

Mike Kahn, chairman of The Clipper Group Inc. in Wellesley, Mass., said the Wal-Mart contract significantly turns up the heat on storage market leader EMC. "Pricing has got to be an issue. Whenever you're spending this much money, you're always looking for the best price available," Kahn said.

"IBM and Hitachi in particular are fighting back very hard," Taneja said. "Our information is that EMC is selling products at a price-per-gigabyte rate that is almost unheard of for the class of systems they are."

Sun announced today that it too had landed a big contract with a retailer, Ross Stores Inc. The Newark, Calif.-based company, which has 438 retail stores, will use Sun Fire 6800 servers to manage corporate accounts, supplies and human resources.

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