By William Fellows
Hewlett-Packard Co is in the process of signing up the rest of its application service provider partners for the same outsourced storage-on-demand deal it struck with Qwest Communications last week. HP is supplying application service providers with storage servers under revenue- sharing deals modeled on partnerships it has with other companies such as Eonline, USA.net and StarMedia for application hosting. ASPs are renting storage space for customer data plus additional backup, recovery, replication and management services. HP says it will supply won 95% of the Windows NT servers and 75% of the Unix servers and storage in Qwest’s 14 data centers, each of which has from a few thousand to 25,000 servers.
HP has split its enterprise storage unit into three separate divisions in the reorganization announced last Friday by CEO Carly Fiorina. The move reflects the company’s recognition that customer spending on storage is a fast-growing part of overall system sales, and demonstrates HP’s commitment to build a storage business in all market sectors to best take advantage of the opportunity.
David Scott will run the XP storage organization as general manager, which will be responsible for the high-end XP256 disk arrays sourced from Hitachi Data Systems Ltd, plus all of the associated enterprise storage applications. Neal Clapper gets the modular storage group which owns the mid-range AutoRAID, SCSI and Jbod products while Larry Hemmerick gets the software and storage area network management operation.
HP expects to beat the target of one year it had set to recover revenue lost as a result of the end of its storage reseller agreement with EMC Corp, now its bitter rival in the storage business. On the back of XP256, HP says that in its third quarter to the end of July it booked 55% of the amount system sales that it did on EMC kit the second quarter when the deal was still in place. It claims to have installed 350 XPS256 systems since it began sales of the subsystems.
Scott denies EMC’s claim that HP is effectively giving away storage under its new outsourcing models. He says that if customers are prepared to use the company’s HP-UX Unix servers, they get the cheapest storage around. HP is also offering XPS256 for use with other Unixes as well as Windows NT. Scott also says that EMC’s claim to have turned down a deal from Qwest is nonsense. EMC was desperate for the contract, he said.
Competition between the two companies is likely to intensify as the two battle for sales to new HP accounts and the opportunity to upgrade existing customers. One unsubstantiated claim we heard is that EMC sales people are under at risk of losing their jobs should they lose accounts to HP. EMC could not be contacted by press time.
