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November 3, 1999

HP Switches SAN Fabric Program to Focus on Apps

By CBR Staff Writer

By Jo Maitland

In an effort to better compete with EMC Corp and other storage area network (SAN) vendors and to focus on high-margin application software Hewlett-Packard Co has decided to revert to OEMing third party fabric equipment branded with the manufacturer’s own label rather than the HP logo.

However HP will only market hubs, routers and switches for the SAN market bearing the maker’s own brand so long as they agree to use HP’s SAN management software API’s and to interoperate with HP’s future partners in this space. It claims the market for equipment from which customers can build ‘fabric’ or SAN infrastructure is significant but clearly believes it will be able to do much better selling its own software on the devices, which it sources from a whole range of vendors. We are changing the program to make money on applications rather than hardware, said Larry Hemmerich, a general manager at HP.

Hemmerich acknowledged that SANs still have an image problem which has hindered their acceptance. There are also technical problems to resolve. Hemmerich said: Sometimes the switches in the middle of a SAN work and sometimes they don’t and this isn’t good enough. He added that dual switches with failover capabilities will soon be on the market to take care of this problem. The market is still very small and Compaq, IBM, EMC and Dell are all doing there own thing, he said. SANs need to be a generic utility and our software will work in all products to ensure this.

The company will sasy it will also launch a partner program to include vendors in all areas of the storage arena. Hemmerich said that so far host-bus adapter firms Q-Logic and Emulux have signed up to the program. These companies will put our APIs and SAN Manager software in their devices. Hemmerich would not say when this will be officially launched.

Currently HP’s SAN Manager software is derived from the company’s Transoft acquisition. It only manages fabric devices running on Windows NT but this will soon be ported to all platforms including HP-UX, AIX and Solaris. HP claims it is ahead of the pack in SAN management. The company said it would never support Sun Microsystems Inc’s Java-based Jiro storage management APIs because it says they have no management capability.

The move is also part of HP’s plan to position itself as an ‘open’ SAN vendor supporting multi-vendor devices versus EMC which HP characterizes as selling closed solutions. EMC is driving an industry coalition of vendors called the FibreAlliance which support EMC storage APIs, and it recently launched ControlCenter applications designed primarily to manage EMC storage equipment.

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HP’s enterprise computing and storage businesses are under considerable pressure to perform better, having taken much of the blame for HP’s recent revenue warning. HP says that until now the high-end XP256 storage subsystem it sources from Hitachi Data Systems Ltd (which will continue to carry the HP logo), has been a strong business. It has sold 1,000 terabytes or one petabyte of XP256 disk to date but declined to say whether strong sales would continue in view of the downtick which seemed to strike IBM out of the blue in its last quarter. It doesn’t want to get caught on the hop in the same fashion.

In June HP scrapped its reseller relationship with EMC Corp as its preferred enterprise storage supplier and instead began OEMing the HDS disks under the HP brand. HP wasn’t picking up revenue from sell-through maintenance and other support services. Instead it was going directly to EMC.

Hemmerich claimed he knew nothing of the news yesterday that the Dii Group, a provider of design and production services to the electronics industry, would be buying the manufacturing assets of HP’s storage systems unit. Reports claim that the Dii-Dovatron unit will also supply tape and optical data-storage systems to HP. The deal is expected to add $200m to Dii’s revenues in the first year and more than $500m in the next five years. á

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