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HP Storage Gets off the Deck

Posted by iMark - 2005-11-21

HP, which revamped its EVA midrange SAN system and added a slew of other storage products primarily through partnerships with startups, reported late Thursday that its storage revenues increased 17 percent both year-over-year and from the previous quarter.

Storage, which floundered under previous HP CEO Carly Fiorina, has rebounded since Mark Hurd took over the company in March. HP upgraded its EVA systems for the first time in more than two years in May, and added products such as high-end NAS, virtual tape, WAN acceleration, and backup services through partnerships with PolyServe, Sepaton, Riverbed, and Asigra. HP also acquired storage management vendor AppIQ in September.

While executives of rival storage companies snicker that HP’s partner strategy shows a lack of innovation, it hasn’t hurt sales. According to analyst Aaron Rakers of A.G. Edwards, HP picked up 1.3 percent of market share in external disk storage, edging up over 20 percent. Rakers estimates that EMC, IBM, and Sun lost share slightly, while Dell, Network Appliance, and Hitachi Data Systems joined HP in picking up share last quarter.

Most of HP’s success is coming in the midrange, with Wall Street analysts placing revenue growth at 44 percent year-over-year with high-end XP system revenues increasing 32 percent. HP's XP systems come from an OEM agreement with Hitachi.

Jeff Machols, systems integration manager at benefits services firm CitiStreet, bought an EVA 6000 system soon after its rollout and runs it with an XP512 based on older Hitachi Lightning controllers.

Machols says his EVA outperforms the XP512 for most applications outside of transactional databases, such as Oracle and IBM DB2. He also says the firmware for the new EVAs can be upgraded without taking the systems offline -- unlike older EVAs -- and he gives them high grades for making it easy to set up and manage disk virtualization.

“They have a more complete package now,” Machols says of HP. “Before, you had the high-end XPs from Hitachi -- they’re nice, fast, absolute battleships. You never had any problems. But they’re expensive. There was a big gap on the other end.”

Now, he’d like HP to improve its StorageWorks Continuous Access replication software so he can replicate between his firm’s offices in Jacksonville, Fla., and Quincy, Mass. “I can do replication in the same location, but remote replication is important because I don’t want to have to send any tapes offsite anymore,” he says. “HP’s asynchronous replication is still immature. In theory, it will do it, but it’s pretty theoretical.”

Analyst Dan Renouard of Robert W. Baird & Co. attributed the EVA upswing in part to “pent-up demand in HP-centric environments due to a storage portfolio which had grown stale.” In other words, customers are upgrading from older HP systems but not switching over from other vendors’ products.

Still, HP appears to have made gains on storage leader EMC in the midrange. EMC reported 17 percent year-over-year growth, and its midrange Clariion revenues increased 20 percent year-over-year but decreased 1 percent sequentially.



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