IBM, Compaq form network storage alliance

Compaq Computer and IBM today announced a long-term, $US1 billion agreement to sell each other's storage software and hardware.

Compaq CEO Michael Capellas predicted the deal would improve the interoperability of storage networking technology, to make such networks easier for enterprises to deploy and manage.

Under the terms of the deal, Compaq will sell IBM's high-end Shark storage servers and some Tivoli Systems systems-management software. In turn, IBM will sell Compaq's StorageWorks Modular Array 8000 systems and software, which use IBM high-speed hard-disk drives.

In addition, IBM will support Compaq's VersaStor software, which guides various platforms to help users find files in a single store of data.

Analysts said the deal, which would help Compaq and IBM take on kingpin EMC, might also complicate things for customers. The two companies will cooperate on selling storage technology, but compete in every other realm, especially Windows NT servers.

"I think the whole deal will confuse the life out of the poor IBM and Compaq sales guys," as well as the end users, said Steve Duplessie, an analyst at Enterprise Storage Group in Massachusetts. For example, he said, a Compaq sales rep might try to sell the IBM Shark product, only to have an IBM rep try to sell it direct to the same customer. In the midst of that battle, EMC could "walk in and take the deal", Duplessie said.

However, in the long term, an IBM and Compaq partnership could create problems for the dominant high-end EMC Symmetrix storage platform, said Bob Zimmerman, an analyst at Giga Information Group in California.

Market researcher International Data Corp estimates the storage systems and storage management market will grow to about $US48 billion in 2003.

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