IBM, Hitachi Link Their Storage Units

IBM and Hitachi are taking on the soon-to-be combined HP/Compaq storage division and industry leader EMC through a plan to co-design and build storage hardware and software.

IBM and Hitachi Ltd. are teaming up to bring out new data storage hardware and software.

The two companies late yesterday said they are starting a new company to develop hard drives. In addition, they will co-develop storage virtualization software and use the CIM (Common Information Model) specification to develop storage management products.

The new company, for which a name hasnt yet been announced, will be located in San Jose, Calif. and will conduct research and manufacturing. It also will house sales and marketing employees and will be 70 percent owned by Tokyo-based Hitachi, which will make an undisclosed payment to IBM for its current hard drive assets, officials said.

"Both Hitachi and IBM expect to source a major portion of their [hard disk drive] supply from the joint venture… The new companys management team is expected to include executives from both companies," according to a joint release issued last night.

Essentially this announcement means IBM is exiting the drive business, except for a minor stake in the new company.

As for the day-to-day details of how the new company will be organized and what its product cycle will be like, "the details are still being worked out," said Chris Andrews, a spokesman for IBM, of Armonk, N.Y.

IBMs virtualization technology, which is the concept of managing disparate storage systems as one pool, will also be available to Hitachi. As early as 2000, IBM planned StorageTank to be that virtualization application, but that was delayed several times as Big Blues strategy shifted. The latest strategy will debut later this month as an in-band virtualization appliance, and IBM will let StorageTank primarily evolve as a storage resource management product, sources close to IBM said.

How that will be reconcile with Hitachis own plan to add virtualization in Version 2.0 of its HiCommand software is unclear, especially since neither company has had much success versus incumbent leaders like EMC Corp., Veritas Software Corp., industry watchers note.

Meanwhile, IBM and Hitachi will co-develop CIM applications, officials said, without elaboration. CIM, in theory, would solve most of the current storage management and interoperability problems, but vendor self-interests have notoriously plagued it.

The announcement leaves many important questions unanswered. The move could be indicative of IBMs and Hitachis answer to the imminently merging of the storage divisions of Hewlett-Packard Co. and Compaq Computer Corp., especially because storage hardware is becoming a commodity and storage software is growing in importance, experts note. The IBM-Hitachi alliances also could rival the dominance of Hopkinton, Mass.-based EMC, which first acknowledged the management software trend late in 2001.

"It certainly provides some opportunities to increase what already is a fierce competition with some of our rivals in the industry," IBMs Andrews said.

Hitachi and IBM officials said they will announce more details at a later date, according to the release.