Compaq Computer is likely to take the lead in storage following its pending merger with Hewlett-Packard, solution providers and industry watchers say.
While the two vendors have complementary technologies that should blend well in a combined company, Compaq is the stronger player in the storage market. Compaq sold about $2.7 billion worth of external storage arrays in 2001, more than double the $1.2 billion recorded by HP, according to research firm IDC.
"Time will tell if we officially merge," said Tom Rallens, worldwide marketing manager for HP's Network Storage Solutions Organization. "But our two companies are largely complementary in terms of storage. It should be easy to merge. . . . Our strength is in the high-end enterprise, but we have publicly announced that Compaq's strength is in the Windows space."
At the high end of the storage market, HP is expected to continue to OEM its XP series of arrays from Hitachi Data Systems for the foreseeable future.
Compaq just recently introduced its Enterprise Virtual Array (EVA) into this space, said Mark Lewis, vice president and general manager of Compaq's Enterprise Storage Group.
The EVA, after four years of development, is a fully native 2-Gbps Fibre Channel array. It also provides storage virtualization, including the ability to dynamically grow and change RAID sets, do instantaneous snapshots and replications and to do data cloning in the background, Lewis said.
In the midrange area, the overlap is more pronounced. HP's VA series of arrays and Compaq's MA 8000 and EMA 12000 target similar markets, although both HP and Compaq officials agree that the bulk of the HP arrays end up in HP environments, and vice-versa.
"While there are things we would need to work on, our lines are complementary," Rallens said. "We attach mainly to HP servers, and Compaq attaches mainly to Compaq servers. In the midrange space, HP just recently announced heterogeneous support. Compaq does more in terms of heterogeneous attachments."
In the entry-level space, Compaq recently introduced the MSA 1000, aimed at cutting the cost of SANs, said Lewis. The most unique capability is direct-attached storage (DAS)-to-SAN, in which hard drives embedded in a server or other array can be placed in the MSA 1000, which will automatically migrate the data to the SAN and configure the RAID, he said.
"This will allow more and more customers to migrate from DAS environments into SAN environments for what we believe will be a very, very low hardware cost," Lewis said.
Also on the hardware front, HP currently produces tape drives and automation products, while Compaq relies on outside sources for such products. However, Lewis said Compaq is committed to attaching nearline and backup solutions to a SAN as part of being a one-stop supplier.
On the software side, HP's OpenView software suite manages storage as part of a complete network management offering. However, most observers agree it will be managing software made by Compaq.
Compaq was the No. 5 storage management software vendor in 2001, with new license sales exceeding $198 million, according to Gartner Dataquest. HP did not show up in the top 10. "We're very pleased about the growth and continued success we've had there, taking that from what was zero business for us three years ago," Lewis said.
OpenView has the ability to support a number of non-HP environments, and support for Compaq environments is coming, said Rallens. OmniBack, part of the OpenView suite, is now being enhanced for fast data recovery by allowing the system to go to online copies of data instead of tape in the event of an unplanned shutdown, he said.
Software has been a major emphasis for Compaq, Lewis said. More and more value comes from software as time passes, which explains why Compaq emphasizes this space in the market. "We think we're giving great value on the software side to our customers," he said.
The keys to software development include business continuity software and the need for data replication across sites, and capabilities that ensure high degrees of utilization, as well as virtualization, where Compaq is the leader, Lewis said. Compaq offers host-based and embedded virtualization capability and by the middle of this year expects to launch its VersaStor SAN-wide virtualization products, he said.
In head-to-head competition between the two, there are many areas where the two have different offerings.
Both Rallens and Lewis said that most of HP's midrange storage is attached to HP environments, while Compaq's attach to Compaq environments. Rallens said that Compaq's midrange storage products are more able to attach to heterogeneous environments, while HP has already publicly acknowledged Compaq's storage strength in the Windows space.
Compaq's StorageWorks offerings have been heavily focused on heterogeneous, server-agnostic environments, Lewis said. "We believe really, other than EMC and to some degree Hitachi Data Systems, we're the only company to really do that," he said. "And we're definitely the only server company. . . to focus on storage as both an important part of our solutions [but as an independent solution that is purchased separately."
Lewis did not directly say that he expects Compaq's modular storage solutions will displace HP's XP series of high-end arrays, which are made by Hitachi. However, he said the modular arrays compete quite well against monolithic storage devices such as Hitachi's Freedom Storage, EMC's Symmetrix and IBM's Shark, except in the mainframe space.
Don Swatik, vice president of alliances and information sciences at EMC, said there is a lot of overlap in the product offerings of HP and Compaq, which will lead to confusion.
Swatik said both companies' midrange hardware and management software offerings target the same markets, and so something has to go. "Customers want to make investments in storage," he said. "They don't want to buy something that won't be supported in the future."
Hu Yoshida, CTO of Hitachi Data Systems, on the other hand, sees much opportunity from the merger. "HP is an OEM of ours," Yoshida said. "So there's more opportunity for us. Last year, HP signed up for another three years. So we expect the relationship to continue."
Don Richie, president of Sequel Data, an Austin, Texas-based Compaq solution provider that just signed up with HP, said he expects Compaq to dominate HP in storage.
Richie expects HP will keep its Hitachi OEM relationship until the Compaq arrays have scaled to the point where they can take over. "We were thrilled with the newest Compaq arrays," he said.
Rich Baldwin, president of Nth Generation Computing, a San Diego-based Compaq partner, said Compaq's StorageWorks brand is No. 1 or No. 2 for nearly every product. "You just can't kill that kind of name," he said.
Virtualization will be an interesting part of the merger, Baldwin said. Compaq's VersaStor technology, which is now in early beta, will allow virtualization of any vendor's arrays, including Hitachi and EMC, with no bottlenecks in performance. HP's StorageApps virtualization technology is currently available, but because it is an in-band solution, it could be a performance bottleneck. So Baldwin expects VersaStor to be the combined company's high-end solution, with StorageApps being a good low-end solution.