Sales of data storage devices bring HP many billions of dollars in revenue each year, but "it's a secret inside of HP," said Duane Zitzner, head of the HP division that includes low-end storage and PCs in an interview. "We're trying to ratchet up the communication."
Data storage, for years a necessary but somewhat drab part of corporate computer networks, has been coming out of the closet as computer companies realize just how much money it earns. Some analysts estimate that when a computer company sells a storage system along with a higher-profile server computer, the storage system still accounts for half the revenue.
"I personally think that storage will become more of an entity to be considered in and of itself than it has before," said Illuminata analyst John Webster. "It's part of the evolution of storage moving out from behind the server."
However, that profit margin may not stay as fat now that companies such as HP, IBM, Compaq Computer, Sun Microsystems, EMC, and Dell all move to sell more storage and competition gets fiercer.
But with the Internet and the spread of computers in general, there's room for a lot of growth. "The world is becoming more and more digital," Zitzner said.
A new storage appliance from HP
Among HP's new products are drives that can create DVD disks, new tape libraries for backing up data, and a bigger magneto-optical disk system for customers who need to archive data on disks that last decades. But an interesting new direction for HP is a special-purpose file server that HP says is cheaper than general-purpose servers.
The HD Server 4000 holds as many as 90 gigabytes of data and costs about $8,000 in its most expensive configuration, said Todd Owens, a marketing manager for HP's information storage group.
The devices, as previously reported by CNET News.com, aren't as fast or as specialized as the much more expensive products from Network Appliance, but they are designed to be more powerful than the low-priced storage servers Quantum obtained with its Meridian Data acquisition in May.
"This might be a little more forward-thinking a product than it appears to be," Webster said of the new HP storage server. "Little products like this have a funny habit of growing up."
The file server fits into a category called "network-attached storage," or NAS, the small-scale devices that plug into a network to easily expand file storage capacity. Market research firm International Data Corporation projects that storage market will explode to $5.1 billion in 2003.
However, unlike the servers from Quantum and Network Appliance, HP's products only can fit into Window NT networks, Owens said. Quantum's servers can plug straight into Windows, Unix, Novell, or Apple networks, said Quantum marketing vice president Jeff Hill. Network Appliance's products are well-adapted for Unix networks.
HP will add support for Unix and Novell environments in the spring, Owens said.
Some analysts believe that special-purpose "server appliances" threaten the revenues computer makers earn from general-purpose servers, but Owens said he doesn't think that's likely in the case of the HD Server.
"Why pay for the license [of general-purpose server software] just to get an electronic file cabinet?" he asked.
Internally, the HD Server itself runs a stripped-down version of the Unix operating system, Owens said.