EMC, Dell introduce new storage system
EMC, with a boost from Dell Computer, has released a new midrange storage system as part of its continuing push into lower-priced markets.
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EMC is invigorating its Clariion line with data-protection software features previously available only on machines in the top-end Symmetrix line and with a Dell sales partnership. EMC acquired the Clariion line in its purchase of Data General in 1999, but more recently has begun putting more emphasis on the systems.
The new Clariion CX400 has a top storage capacity of 4.4 terabytes, when several modules are stacked together, but customers are likely to gravitate toward more modest configurations. EMC and Dell both sell the system; a 180GB version costs about $60,000 from Dell, including three years of service and support.
In the computer spending frenzy of the late 1990s, EMC was king of the hill with its Symmetrix line, refrigerator-sized machines that often cost well over $1 million. Now, though, Symmetrix has ample competition, profit margins have dropped, customers are getting by with the minimum necessary hardware and the Clariion line has been rising to prominence.
"Since the mid-1990s, EMC has been trying to penetrate the Microsoft customer base," Data Mobility Group analyst John Webster said. But those who had been buying Intel servers running Microsoft Windows weren't accustomed to the prices of Symmetrix machines. "Symmetrix has looked like a very expensive proposition."
The Clariion improvements and the Dell partnership are making EMC more palatable. But it's not all good news: As Clariion systems acquire the abilities of Symmetrix systems, sales of the lower-end line will likely eat into those of the higher-end one, unless EMC can improve Symmetrix, Webster said.
Hopkinton, Mass.-based EMC has been punished by the sustained sluggishness of computing equipment spending. Since the company announced new layoffs last week and warned that it wouldn't meet its goal of profitability for the second half the year, its stock has dropped more than 20 percent, from $5 before the announcement to less than $4 Tuesday.
The stresses are beginning to show, Webster said. "It's becoming more difficult for EMC to maintain the (customer) support levels that have kept its customer base loyal," in spite of the premium buyers paid for EMC products. "That's a sign of serious trouble."
But the company hasn't lost any of its characteristic aggressiveness. Two weeks ago, EMC didn't even need a full day to file a countersuit after Hewlett-Packard sued for patent infringement. HP, along with HDS, Sun Microsystems and IBM, are all gunning for EMC's share of the high-end storage market.
NetApp's expansion into EMC's market is taking place about two years after EMC launched a push of its own into NetApp's stronghold.