Hitachi moves into data storage outsourcing

Japan's Hitachi is moving into the business of data storage outsourcing services.

Japanese electronics giant Hitachi, which acquired IBM's disk drive manufacturing arm more than two years ago, is now quietly expanding into the business of providing storage services for multinational companies.

"We are moving into this business because our customers want us to do so," said Mituso Yamaguchi, chief strategy officer for information and telecommunication systems at Hitachi, in a telephone interview ahead of the Cebit trade show. "They want to take advantage of our research and development capability and our in-depth understanding of storage technology."

Initially, Hitachi will provide data storage services to companies in its domestic Japanese market as well as Japanese multinational companies, according to Yamaguchi. "For the global market, we don't have any plans yet," he said. "But multinational companies are global, so we will see how business with them develops first."

As part of its storage outsourcing services, Hitachi will provide storage capabilities either remotely through its data centers or directly by installing its own equipment in customers' facilities, according to Yamaguchi.

Asked whether Hitachi's move into the storage services market might upset its service provider customers already operating in this sector, Yamaguchi said no, "the outsourcing market is expanding."

At the Cebit trade show in Hanover, Germany, which opens on Thursday, Hitachi will show a range of consumer electronics products, including plasma TVs, in addition to an assortment of storage systems.

Yamaguchi said its subsidiary Hitachi Global Storage Technologies is moving ahead with the development of two micro disks for use in handheld devices, announced earlier this year.

The 1-inch Mikey microdrive with a capacity of between 8G bytes and 10G bytes will be commercially available in the first half of this year, he said. The 1.8-inch Slim microdrive, with a capacity of 30G bytes to 40G bytes will come to the market in the second half.

Demand for these products, Yamaguchi said, will depend to a large extent on the "content players." The Slim microdrive, for instance, would be able to store video but it is up to content providers to develop business cases for such a service, he said.

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