The SAN That Wasn't There

A month ago, Hitachi Ltd. (NYSE: HIT; Paris: PHA) and IBM Corp. (NYSE: IBM) announced a two-part deal, under which they will (a) combine their hard disk drive businesses and (b) jointly develop "technologies for next-generation storage networks" (see IBM and Hitachi Gang Up on EMC).

It seems like it should be a big deal. After all, these are two Very Big Technology Firms dancing with each other. But only half of it is really substantial.

The first part is logical. The price of magnetic disk drives continues to fall faster than the batting average of Chicago Cubs first baseman Fred McGriff (he's hitting .214!). Consolidation is the way commodity markets evolve.

It's the second part of their arrangement that looks suspiciously like a low-calorie snack. The lack of substantive details about IBM and Hitachi's supposed joint development on next-generation SANs is making it look like cheap talk -- designed primarily to portray their common enemy, EMC Corp. (NYSE: EMC), as locking customers into its proprietary platform.

Officials from Hitachi and IBM insist that more details are coming on their storage networking alliance. "At this point, not everything is defined," says Marlene Woodworth, VP of marketing at Hitachi Data Systems (HDS), the company's global sales and marketing unit for storage.That's an understatement. IBM and Hitachi have defined nothing. They haven't disclosed how much each is investing into the joint development effort in terms of staff or dollars. My guess is either they don't know at this point, or it's too insignificant to talk about.

Furthermore, IBM is now playing down this supposed partnership. IBM's development on next-generation storage networking software "doesn't really relate to the Hitachi partnership at all, except to say that some of the work we do with Hitachi is going to include working on open standards for storage management software," said Chris Saul, storage systems product manager with IBM.

These are the most definitive details we have been able to extract about the IBM-Hitachi parntership:

There's one undeniably positive effect of the growing industry support for the standards-driven CIM initiative: It has given EMC no choice but to support it. Or, at least, give it lip service. As Jim Rothnie, EMC's CTO, said recently, "If we wait for standards, they'll be ready... in 20 years' time." If EMC had its way, maybe it would (see Standards Battle Still a Hot Potato).

But until we hear otherwise, the IBM-Hitachi partnership on storage networking boils down to this: They plan to cooperatively develop CIM-based management interfaces. That's a fine goal. But isn't that what happens during a standards-setting process anyway? Since when has collaborating on standards amounted to a strategic partnership?It may, in fact, be a smokescreen to buy IBM and Hitachi more time for each to develop its own multivendor storage management initiative. IBM is now officially at least two years behind in delivering Storage Tank, its SAN-based file system, and has a virtualization engine in the works that's probably at least a year off. HDS only recently woke up, shook out the cobwebs, and realized it needs a comprehensive software strategy to remain competitive (see IBM Software Slides to 2003 and Can HDS's TrueNorth Take On EMC?).

Anyway, it was obviously the hard disk side of the house that drove the deal in the first place. The Hitachi-IBM HDD venture will be a multibillion-dollar player that should attain nice economies of scale in manufacturing and R&D. It will slug it out as the No. 3 provider in the HDD market behind Maxtor Corp. (NYSE: MXO) and Seagate Technology Inc.

The stuff about "next-generation storage networks" almost seems like it was thrown into the press release as an afterthought.

Imagine this scenario: IBM and Hitachi execs are gathered around a conference table toasting each other (with whatever it is they use on such occasions) after sealing the HDD deal. Then one of them slaps the table in a eureka! moment: Maybe they can get a little more mileage out of this. "Hey, we both already decided we're going to support SAN management standards anyway, since everybody hates EMC's story with WideSky. Let's say we're doing joint R&D!" High fives all around.

Industry standards and interoperable storage systems are good things, and customers should demand them. The fact that IBM and Hitachi are planning to work toward this goal together is praiseworthy. But trying to pump it up to sound bigger than it is... well, it's a bit pathetic.Todd Spangler, Senior Editor, Byte and Switch
http://www.byteandswitch.com