Amdahl Enters A Staggering Storage Market

Amdahl plans to roll out new storage integration services and resell the storage systems of its parent company, Fujitsu - entering the highly competitive sector just as leading storage vendors are getting battered by a dramatic drop-off in demand.

Amdahl, a wholly owned subsidiary of Japanese IT giant Fujitsu, will begin reselling Fujitsus midrange and high-end storage systems in North America and Europe. The two systems, the GR 730 and the GR 740, were introduced in the Japanese and Asian markets in February 2000.

The GR 730 will be positioned against midrange systems, such as EMCs Clariion family, and the GR 740 stacks up against high-end units such as EMCs Symmetrix, Hitachi Data Systems Lightning and IBMs Shark, said Wayne Giroux, director of marketing of Amdahls storage division.

The timing of Amdahls move could not have been worse, as spending on storage hardware has plummeted following the Sept. 11 attacks and the general economic slowdown. For the quarter ended Sept. 30, market leader EMC reported $1.21 billion in revenue - 47 percent lower than the same period in 2000 - and a loss of $945 million.

"Storage is really taking it on the chin," said Arun Taneja, senior analyst at Enterprise Storage Group, a storage industry consulting firm.

Taneja added, however, that the fundamental drivers behind the storage boom havent disappeared, and he expects the market to rebound next year. The storage needs of enterprises are roughly doubling every 12 months, Taneja said, and that trend will continue as companies start implementing new backup and disaster-recovery plans spurred by the terrorist attacks.

"Theres a huge opportunity for Amdahl, but storage hardware in general is moving toward commoditization. The product will really have to outshine the current EMC and Hitachi boxes to catch somebodys eye," Taneja said. "The competition for them at the midrange and high end is nontrivial competition."

Amdahls Giroux conceded that its a "tough market" for storage right now, but he said that the companys storage push isnt solely focused on selling hardware - instead, Amdahl will lead with its multivendor systems integration services to differentiate its offerings from suppliers such as EMC. Giroux said that Amdahl will continue to be a major reseller of Sun Microsystems storage products, as well as those of other storage technology companies such as Veritas Software.

"Were focused on what the customer is trying to do - not what boxes were trying to sell," Giroux said.