Sun, Hitachi renew storage alliance

The companies extend their partnership in high-end storage systems--a deal that has allowed Sun Microsystems to grab a long-sought foothold in this market.

Michael Kanellos Staff Writer, CNET News.com
Michael Kanellos is editor at large at CNET News.com, where he covers hardware, research and development, start-ups and the tech industry overseas.
Michael Kanellos
2 min read
Sun Microsystems and Hitachi have extended their alliance in high-end storage systems--a deal that has allowed Sun to grab a long-sought foothold in this market.

The alliance lets Sun resell data center-class storage systems designed by Hitachi Data Systems (HDS), the wholly owned storage subsidiary of Japanese computing giant Hitachi, under its Sun StorEdge brand. A storage system, such as the StorEdge 9980, is primarily bought by large institutions such as banks and government agencies. Systems can contain between five and 1,024 hard drives, hold as much as 147.5 terabytes of data, and cost several thousands of dollars.

Sun and Hitachi also work together to develop software and staff customer-support centers, said Kathleen Holmgren, vice president of marketing for Sun's storage division. Although the systems bear a Sun brand, Hitachi's involvement is quite apparent, she added.

The alliance, which began in August 2001, was initially set to expire at the end of 2004, but will now run through 2006. The extension will be formally announced Monday.

Although Sun designs its own servers and microprocessors, it takes a somewhat collaborative approach when it comes to storage. Before the alliance with HDS, Sun tried to design and sell its own equipment and acquired technology from Encore Computer to help it do so. These products, though, largely fell flat in the market.

At the low-end, Sun sells systems such as the StorEdge 3510 FC and 3310 NAS designed by Dot Hill Systems.

Sun designs the 6000 line of midrange storage devices itself but mostly dedicates its in-house storage efforts to developing software that can better manage storage devices or use them more efficiently. Last year, for instance, Sun bought Pirus Networks, which specialized in software that lets disparate storage devices be used as one system.

As part of the alliance, Sun will enhance the Pirus software so that it can be used with HDS' Thunder and Lightning storage systems, Holmgren said.

While Sun's revenue dramatically declined when the manic spending of the Internet boom years ended in 2000, its storage revenue shrank slightly less than its most significant product line: servers. In fiscal 2000, storage products accounted for $2.4 billion, or 18 percent of the company's $13.4 billion total product revenue. In fiscal 2002, the $1.7 billion in storage revenue was 19 percent of the $9.1 billion total product revenue, according to a quarterly reported filed in May with the U.S. Securities and Exchange Commission. The filing marked the first time that Sun broke out its storage numbers.

HDS is expected to garner $2.5 billion in revenue for its fiscal 2004, which ends March of that year, said Karen Sigman, a senior director at HDS. HDS also has an alliance with Sun rival Hewlett-Packard.