IBM-Net App Alliance Could Steal EMCs Thunder

The recently announced pairing of IBM and Network Appliance might just be the one-two punch needed to square off against market leader EMC Corp., analysts believe.

In an effort to take on storage behemoth EMC, IBM, of Armonk, N.Y., and Network Appliance, of Sunnyvale, Calif., announced Wednesday that they would band together to create storage and information-on-demand solutions that combine the two companies technologies.

To do so, IBM will now sell solutions based on Network Appliance unified and open NAS (network-attached storage) and iSCSI/IP SAN solutions including NearStore and NetApp V-Series systems.

NetApp applications also will be more integrated with IBM Tivoli Storage Manager, while IBM Tivoli Storage Manager will become the preferred backup and recovery solution for NetApp products, and NetApp will use IBMs tape systems in its solutions.

Its a smart move for both companies, said Randy Kerns, senior partner at Evaluator Group of Greenwood Village, Colo.

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By virtue of gaining access to NetApps market-leading NAS solutions, IBM gains a better complement of products with which to compete, he said.

Read more here about NetApps agreement with IBM.

"They are acknowledging that there are some places where they dont have a full set of products," he said. "Now they can provide a complete suite and have more account control and compete in areas EMC cant, but also in every place EMC does. It closes the gaps."

The most important part of the deal for IBM may be its access to NetApps market-leading NAS solutions, said Tony Asaro, senior analyst for Enterprise Strategy Group of Milford, Mass.

"IBM now has a product that has been successful in dominating the market even against a competitor as formidable as EMC," he said. "EMC used to be able to get its foot in the door at IBM accounts through its NAS offerings and once there, could try to sell them SAN solutions as well."

NetApp gets plenty out of the deal as well, Kerns said.

"There are a significant number of enterprise accounts where NetApp probably would never have had a chance," he said. "Now they have an opportunity to get their products into a much larger set of accounts."

The combination of NetApp and IBM may be just whats needed to make a dent in EMCs lead, Asaro said.

Click here to read more about how a hotel management company chose storage offerings from IBM partner NetApp for a project.

"It has the potential to hurt EMC a bit. I dont think its a knock-out punch, but it certainly makes EMCs job somewhat harder," he said.

Kerns said the combined team definitely has the opportunity to take market share from EMC because of IBMs presence in so many accounts.

"They can have more influence at those accounts by allowing them to buy all of the products they need as a package," he said. "A lot of companies want to deal with as few vendors as possible."

Although its too soon to gauge EMCs reaction to the news, Asaro expects the company to acknowledge the relationship as something that could be competitive, but to remain somewhat skeptical about its execution.

EMC does have a chance to fight back, Kerns said, if it concentrates on price.

"If you are OEMing some other product, you have to pay for your overhead as well as paying the margins the other companies have," he said. "EMC can probably do a good job of competing in the price area versus an OEMd product."

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