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HP to Kumar: No fangs, just facts

K. Balachandran, chief of staff of Hewlett-Packard's Network Storage Solutions Organization, defends HP's storage business in response to a column by analyst Ashok Kumar.

     

      
    HP to Kumar: No fangs, just facts

    In response to the April 10 Perspectives column by Ashok Kumar, "No bangs, just whimpers":

    This column described Hewlett-Packard's "struggle" to manufacture disk drives; the flight of storage talent to Agilent; HP's valiant efforts to develop its AutoRAID arrays, DAT tape drives and optical technology; and concluded that within the past few years, HP's storage business has "dwindled from once being meaningful to being mostly meaningless." The column's opinion on the probability of the storage success of the HP-Compaq merger was equally bleak.

    The opinions expressed are completely contrary to opinions expressed by storage industry analysts. In fact, storage is mentioned to be the crown jewel of the acquisition and has generated the least controversy. Sometimes an opinion is so contrary that writing a response is unnecessary. This is one such instance. Still, in order to set the record straight and to not let silence be interpreted to mean agreement, we provide our response:

    First, some easy-to-research facts about HP storage and the storage industry:

    1. D.H. Brown has tabbed HP as the No. 1 overall storage vendor based on strength of technology and breadth of portfolio.

    2. According to the latest IDC numbers, HP is No. 1 in low-end tape drives, No. 2 in tape library shipments, No. 1 in magneto optical shipments, No. 2 in storage services, No. 4 in total storage revenue (up from No. 5 in 2000), No. 4 in external storage revenue (up from No. 5 in 2000), and No. 4 in external RAID revenue (up from No. 5 in 2000) and No. 2 in external UNIX RAID revenue (up from No. 3 in 2000).

    3. Last year was not kind to storage vendors. IDC tells us that in 2001 many respected storage companies saw their revenue drop significantly. EMC revenue dropped 33 percent, Sun's dropped 50 percent, NetApps' fell 19 percent, LSI Logic's fell 25 percent, MTI's 40 percent, Compaq's 17 percent and HP's 18 percent. Conclusion: HP storage did relatively better in a tough year.

    4. Since the introduction of its AutoRAID array in late 1995, HP has sold well over 20,000, making it one of the highest-selling disk arrays in history. Since HP does not publish product shipment numbers, this would not be easy to research, but it's true.

    At HP we pride ourselves on our technical prowess. Last year, we filed over 5,000 patent applications. This technology strength is prevalent in HP's storage business as well. Here are a few proof points:

    1. HP's industry-leading virtual architecture, of which AutoRAID technology is a subset, is in its third generation. We have over 100 patents granted for this technology. Just last year we released the VA7100 and VA7400, our latest product offerings using this architecture, and follow-on products are scheduled for this year.

    2. According to a March 25, 2002, Gartner Dataquest report, "Significant Shifts Affect the Tape Drive Market in 2001," tape drives built using Linear Tape-Open's (LTO) technology out-shipped drives based on Super DLT by more than 2-to-1. Developed by Hewlett-Packard, IBM and Seagate Removable Storage Solutions, the LTO Ultrium format is a high-speed, high-capacity tape technology designed to meet the data-protection and recovery needs for midrange and enterprise computing environments.

    3. Our XP512, where the base system is OEM'd from Hitachi, is Gartner's No. 1 rated enterprise disk array solution--rated higher than the comparable HDS product because of the value of its HP-developed software and solutions.

    4. HP is a technology leader, arguably the leader, in SAN virtualization and Storage Area Management, with its virtualization appliances and its suite of OpenView Storage Area Manager software.

    In his column, Kumar said there has been no news out of HP's StorageApps since it was acquired last year. His conclusion: Things didn't go as planned. In reality, this acquisition has been a tremendous success. Within two months of the close, the SANlink and SANmaster products were available as HP-branded products having undergone the testing and certification required to be so branded. At the same time, a prototype of a new appliance was demonstrated at the SNW meeting in Orlando.

    Another two months and the SANlink and SANmaster products were introduced in other geographies; StorageApps had only sold these products in the U.S. market. And on April 1, 2002, six months from close, HP issued a press release titled, "HP Unveils Global Storage Virtualization Strategy," which announced HP's new SV3000 product, based on the StorageApps technology. All this while the details of merging an acquired company were being taken care of. We wonder what would constitute success for Kumar?

    Did HP's storage talent leave the company and go work for Agilent? Consider: HP's disk drive business was located in Boise, Idaho. When it folded in 1995, the storage talent ended up in HP's disk array business, also located in Boise. It's not clear how Kumar concluded that after HP's disk business ended in 1995 that HP's storage talent went to Agilent, HP's spinoff that happened four years later in 1999.

    Now, a word about the storage implications of the HP-Compaq merger. The storage part of the merger is a win-win. What proof do we offer? What kind would you accept? Does HP's strength in high-end storage, array virtualization, tape, optical and SAN software impress you? Does HP's strength in the Open Systems Enterprise space impress you? Does Compaq's strength in the Windows space impress you? Does Compaq's midrange storage revenue impress you? Does the announced management team impress you? Do HP and Compaq's efforts to retain top people impress you? Does Compaq's handling of the StorageWorks acquisition impress you? Does Compaq's 90 percent merger approval vote impress you? Does HP's reputation for quality and protecting its customers impress you?

    You're still against the merger? Fine. It's OK to express your opinion about the merger, but if we prove you wrong, write about that as well.

    K. Balachandran
    Chief of staff
    Network Storage Solutions Organization
    Hewlett-Packard

     

     

        
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