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December 21, 1997updated 03 Sep 2016 12:44pm


By CBR Staff Writer

The Department of Justice has lifted the cloud hanging over IBM Corp and Storage Technology Corp (CI No 2,931) after the two companies agreed what a spokesperson described minimal changes to the OEM storage agreement they signed back in June 1996 (CI No 2,931) and inked a revised version of the deal. The move ends an eighteen-month investigation by the DOJ’s antitrust division into suspected anti-competitive practices in the direct access storage devices industry. The agreement as originally signed saw IBM hand over design and manufacturing of its high-end mainframe storage products; specifically the Ramac Virtual Array Storage line, to StorageTek with the Armok New Jersey-based giant handling all marketing. However the DOJ had expressed concerns that the deal did not provide incentives for StorageTek to sell its products through other channels. An IBM spokesperson said the key amendment saw the company agreeing to scrub a volume commitment to buy a certain number of StorageTek devices each year. However IBM stressed that it is still allowed to purchase, enhance and sell enterprise disk storage products from StorageTek, saying that it had also now extended the agreement beyond the Year 2000. We’re glad to have this uncertainty cleared up. Some of our competitors have been spreading uncertainty, suggesting that the deal might be going sour?e’d just like to tell our customers it’s business as usual, an IBM spokesperson commented. Tom Lahive, a senior consultant for analysts Dataquest says the move resolves what could have been a question mark over the deal and will help underline confidence in users looking to buy into the next generation of mainframe storage devices from IBM. Early indications suggest that IBM should maintain a narrow lead over its closest rivals in the worldwide mainframe storage market with sales totalling $1.1bn compared to between $800m and $900m for EMC Corp and Hitachi Data Corp in third place but rapidly closing the gap with sales of around $500m.

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