By William Fellows

Something wonderful is the how Sun Microsystems Inc describes Hewlett-Packard Co’s decision to move from a proprietary storage strategy with EMC Corp to a slightly less proprietary solution with Hitachi Data Systems Ltd (see separate story). VP marketing Jeff Allen expects a margin war to erupt between HP and EMC as they both try to sell to HP customers – EMC with better margins now that its systems will be going in direct, rather than resold by HP. Merrill Lynch & Co reckons HP’s gross margin on EMC to be in the high 30%s. HP has made lots of money and won deals versus Sun using EMC, so making a change is a risk to HP’s server business, it says, and that from what it can gather, it sounds like EMC will give sales people higher commissions on HP-attached direct sales going forward given that EMC’s gross margin will be better than when the system is resold.

The HP storage line-up now includes so many third party products that Allen says it reminds him of Compaq Computer Corp’s Tandem and DEC acquisitions: what exactly is the customer going to buy then? And can it trust its storage to HP which has been in and out and in the storage market. Moreover Allen doesn’t believe there’s much vision to the announcement. He says HP/HDS, EMC and other storage suppliers are still typically addressing the traditional OLTP market, not the multi-platform internet and e- commerce opportunities it has in its sights. HP is just the first of many re-positionings in the storage market, Allen believes.

But what of Sun’s own high-end storage offering, the Encore- derived A7000 Intelligent Storage Server? Sun has been talking about the plan to move A7000’s advanced data sharing, mirroring and remote replication functions on to Sparc/Solaris servers for at least a year. As recently as February, Sun was saying that it would begin rolling out these services in the summer. It’s now saying they are in beta and it will deliver them by year-end. Sun plans to host the A7000 services on its Ultra Enterprise servers – which can be fitted as application or storage servers. A microcode-based controller will manage the array itself.