Yesterday the world's largest computer company and the largest maker of PCs announced that they will spend $1 billion working together on data storage systems, sometimes called storage area networks, or SANs. They will resell each other's products and work with industry groups toward interoperability for all SANs, no matter who supplies them. The announcement was widely covered, but analysis was slim.
Most outlets identified storage giant EMC (EMC) as the target of the IBM-Compaq move. Those offering the most extensive coverage - the Wall Street Journal, Boston Globe and TechWeb - all called the same EMC spokesman, Mark Fredrickson. For the Journal, Fredrickson called the IBM-Compaq deal "a statement of desperation by two companies that have holes in their product lines."
The Internet economy is putting air into the ballooning market for SANs. Outlets covering the IBM-Compaq announcement quoted various estimates of the size of this market ranging around $50 billion. However, they were all over the map as to how the field stands at the moment.
The Wall Street Journal put EMC at 35 percent, IBM at 18 percent and Compaq at 10 percent of the market for "large corporate data-storage systems and services" (figures from Steven Milunovich of Merrill Lynch). TechWeb said Compaq has 20.6 percent, EMC 14.4 percent and IBM 12.8 percent of "worldwide revenue for disk storage systems" (figures from IDC). The Boston Globe put EMC at 27 percent and IBM plus Compaq at 25 percent of the market for "high-end data storage products" (IDC again). You figure it out.
For a final word on the alliance's prospects, the Boston Globe turned to John McArthur at IDC: "We started with the big group hug, and now they've got to execute." - Keith Dawson
IBM, Compaq Computer Set Data-Storage Alliance
Wall Street Journal
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Compaq, IBM Aim at EMC
Odd IBM-Compaq Pairing Seeks to Displace EMC
IBM and Compaq in Pact
IBM, Compaq Computer Form Storage Network Venture (Reuters)
Compaq, IBM Team Up (AP)