IBM Denies Slipped Ship Date

Many customers will have to wait until the end of March for the new IBM Corp. (NYSE: IBM)high-end storage systems -- more than three months after the general availability date.

Big Blue says that was its plan all along, while one financial analyst says the delay is a sign of trouble.

When IBM announced the TotalStorage DS8000 enterprise and TotalStorage DS6000 midrange systems in October, it gave December 3 as the general availability date (see IBM's New Shark Tale). But IBMs Website now says orders for the DS8000 are scheduled to ship March 30, 2005.

“According to our checks, IBM has encountered problems with its TotalStorage DS8000,” analyst Kaushik Roy of Susquehanna Financial Group wrote today in a research note. “Such a product delay is highly unusual for IBM, especially considering the importance of the December quarter... The expectation was that it [DSS8000] would ramp in December -- the most important month for high-end storage sales."

The IBM Website apparently distinguishes "availability" from "shipping." The site still says the general availability date for the DS8000 is December 3 -- but it also states all orders worldwide will be initially scheduled to ship March 30, 2005. The site makes no mention of the DS6000.So what gives? IBM denies any problems, manufacturing or otherwise, are holding up its new systems. An IBM spokeswoman says the company originally claimed the DS8000 and DS6000 would begin shipping December 3 with volume shipments in the first quarter next year. She says IBM only expected to ship a modest number of systems in December, and “we’re on schedule with what we said in October.”

As for the Website message, she says March 30 is a worst-case scenario, and shipments are prioritized based on the size of the order and other factors.

Indeed, IBM’s original press release on October 12 said the DS8000 and DS6000 “will be available beginning on December 3, 2004, with normal volume ramp up in the first quarter of 2005.” However, a product announcement sheet for the DS8000 issued the same day listed December 3 as the planned availability date, with no mention of March. The DS6000 announcement sheet listed December 3 as the planned availability date, with March 30 as the date for systems with four or more Fibre Channel drives.

The gap between cup and lip could affect IBM's figures, whether it's actually slipped a date or not. A March ship date puts IBM in a product transition during the fourth quarter, which is historically strong for enterprise sales. The question is: Will customers buy IBM's previous Shark systems today if a replacement is due in three months?

IBM also faces tough competition in the high-end segment from EMC Corp.'s (NYSE: EMC) Symmetrix and the Hitachi Data Systems (HDS) Tagmastore system (see Hitachi Struts Mr. Universal).— Dave Raffo, Senior Editor, Byte and Switch