META trend: Through 2003/04, infrastructure consolidation (e.g., storage, server, OS, DBMS) will increase, but remain impaired by immature tools, time to implementation/service-level priorities, chargeback, and organizational politics. Physical co-location and multihost storage consolidation will be widespread during 2001/02. Partitioning and workload management tool immaturity will hinder higher-level OS, DBMS, and application server consolidation for Unix (until 2002/03) and Win2000 (until 2004/05).

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Many relationships were established, as well as ended, during 2001 (EMC/Dell, Sun/Hitachi Data Systems [HDS], IBM/DataCore, while both IBM/Compaq, Dell/Quantum were terminated). We believe many of these are overall positive, yet IT organizations (ITOs) must evaluate relationships based on commitments and vendor core competencies. We caution against relationships that will be tactical or public-relations-based. Furthermore, through 2003/04, we believe established storage vendors will continue developing key relationships (either development or distribution), striving to deliver storage software functionality that attempts to solve business and application issues. Of the recently established relationships, we believe the Sun/Hitachi and EMC/Dell will be the two most fruitful to ITOs.

Sun rises on Hitachi
Sun made yet another tactical storage strategy shift with its three-year reseller agreement with HDS for multifaceted storage management (the HDS StoreEdge 9900, primarily) in August 2001. The key difference between the Sun/Hitachi agreement and the HP/Hitachi agreement is that Sun will be utilizing Hitachi's storage hardware and software (completely unmodified) and simply rebranding it while Hewlett-Packard (HP) modifies the microcode of the Lightning architecture. The two key differentiators with HP (which we believe will continue to be the case) are MCServiceguard certification and the ability to address an additional number of logical unit numbers for HP-UX servers (both features are also fully supported by EMC Symmetrix). These become design issues with storage consolidation plans for HP-UX.

In addition, with Sun's fourth storage strategy shift in four years, we are concerned because it has not yet shown a coherent path, despite many efforts, that ITOs can plan and look forward to future capabilities for Sun as a strategic enterprise storage provider. Sun will maintain its T3 product line (as well as A/D1000 and A5X00 families), and what storage functionality Sun will develop (as opposed to reselling HDS technology) has yet to be finalized (we believe it will be competitive going forward). While Sun has been trying to use its own software (clustered file system, Sun Cluster 3.0, and replication), it continues to be problematic and places uncertainty between various divisions within Sun (e.g., server, storage) on Veritas cooperation (clients should note the VOS [Veritas, Oracle, Sun] initiative). Moreover, Veritas is a strategic partner of HDS, and we believe this will be contentious with Sun storage (e.g., LSC and HighGround acquisitions). We believe Sun will be more reliant on Veritas through 2004, despite the storage division's attempt to engineer Veritas out, given the timing of the market and Veritas's capabilities.

We believe this will have a minor impact on the total enterprise storage market, and Sun will have difficulty addressing storage requirements outside its installed base for the next 12 months. However, this is overall goodness for Sun because this should stanch some of the losses it was incurring to HDS and EMC in its own base, which we estimate to be about 60%-65% of high-end Solaris deployments.

ITOs should pay close attention to storage proposals, including the 9960 from Sun, because we believe it will be mid-2002 before the worldwide sales and support staff at Sun are properly trained on the dramatically different storage architecture. Sun's professional services are also a weak point, compared with competitors such as EMC, particularly in larger, more complex, fiber channel (FC) storage consolidation projects. ITOs should ensure HDS pre-sales, engineering, and support are involved from the beginning to ensure minimal complications as Sun increases its competency in the FC and high-end storage market. Moreover, support will be multifaceted. Sun will provide first-level support and, longer term, assume (based on country presence) second-level support, but HDS/Hitachi Ltd. will ultimately retain all third-level support functions. This is particularly important, because HDS currently does not have local presence in approximately 120 countries that Sun does. However, Sun's reseller announcement with Hitachi is a positive move to salvage its sinking storage strategy, but Sun has numerous obstacles to overcome before it is regarded as a credible enterprise storage player.

Dell trumpets EMC's Clariion
Dell and EMC recently announced a broad-reaching, five-year, multibillion-dollar agreement whereby, initially, Dell will begin reselling the EMC Clariion storage-area network and network-attached storage (NAS) product line (both hardware and software), but there are no stipulations that the agreement will cease there longer term. Although we recognize Dell has struggled during the past three years in building its storage business with failed acquisitions (e.g., ConvergeNet) and partnerships (IBM Mylex, StorageApps), we believe this agreement will enable Dell to become increasingly competitive (primarily with Compaq and HP) in the low and midrange storage market. This is an area EMC has not successfully penetrated (nor focused much attention on). Furthermore, we believe Dell's supply chain expertise will benefit EMC as it looks to maintain and increase its margins. We note the possibility of Dell controlling overall Clariion manufacturing has sound economic credentials, but many hurdles must be overcome before that occurs.

Despite many of the positive aspects to this (re-established) relationship, Dell must also continue to articulate its transition plans and road map for the Dell/EMC product lines (as it has done since announcement). Dell continuing with its low-end direct-attached storage product line, its recently announced Microsoft Windows 2000 NAS appliance (ending the Quantum NAS reselling agreement), taking n-2 generation Clariion products (the 5500, which Dell was reselling when EMC acquired Data General in 1999) will be quite confusing and cumbersome for the sales force to articulate and ITOs to gain business value from. Similar to Sun, Dell can benefit greatly from EMC's professional services, R&D, and vast storage experience. Dell has been focused on small, simple, packaged, and repeatable FC storage and FC backup/recovery implementations. Although we believe Dell will continue to focus on the low and midmarket storage segment, it will take nine to 12 months before Dell can effectively compete in the broad midrange (top-tier Unix, NT, Win2000) storage market.

Business impact: Robust storage infrastructures will be the foundation for successful business application deployments.

Bottom line: ITOs should look past many of the press release storage partnerships and evaluate storage vendors on core competency and clearly identify where growth/maturity is needed compared to tactical and strategic storage infrastructure requirements.

		ARTICLES  Compaq optimistic with or without HP deal  Start-up Storability wins Compaq contract  Hitachi Data Systems taps new CEO  EMC gives more space to software  Storage industry split over connections
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