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Hitachi storage group names new CEO

Hitachi Data Systems has named Shinjiro Iwata as its new chief executive and declared its intention to displace EMC as the top storage company by 2004.

Hitachi Data Systems has named Shinjiro Iwata as its new chief executive and declared its intention to displace EMC as the top storage company by 2004.

Iwata, a 29-year veteran of HDS parent company Hitachi, spent four years at HDS, where he helped to create the alliance with Hewlett-Packard that propelled the company's high-end storage systems into mainstream use. Since August 2000, he's been general manager of Hitachi's International Business Planning and Development Division.

The company has aggressive plans for the future, including funds of up to $1.25 billion to invest in mergers and acquisitions within the next year. In 2002, the company's goal is more market-share expansion, a direction that likely means a continuation of the price war between HDS and its larger rival, EMC.

EMC and HDS specialize in high-end storage systems that can maintain connections with many servers simultaneously, handling large numbers of transactions as information is written to and read from databases. EMC once enjoyed plump profit margins, but the slumping economy has forced it to cut prices to keep up with competition from IBM's Shark product as well as HDS' 9900 "Lightning" system sold by HP and Sun Microsystems. Compaq Computer, too, now has a competing product.

EMC, unwilling to cede customers, saw its gross margin drop from 57.7 percent in the third quarter of 2000 to 30 percent in the same quarter in 2001.

Two other HDS executives have been promoted to new posts in the company.

Marlene Woodworth has been named executive vice president of global marketing and operations, where she will focus on expanding direct sales as well as partnerships with other sales channels. Christine Wallis now is vice president of global strategy and planning.

Iwata's predecessor, Jun Naruse, has been moved back to the parent company to lead its Information Systems and Telecommunications Group.

"Under my leadership the new executive team will continue to focus heavily on strategic direct sales, global alliances and technology innovation to forge ahead with our goal of becoming the No. 1 storage company by 2004," Iwata said in a statement.