When storage giants EMC and Hitachi Data Systems (HDS) ceased legal hostilities at the beginning of March 2003, two years after EMC first claimed HDS had stolen key technology designs, the ending was as sudden and unexpected as the beginning.
Given the challenge HDS has posed EMC for the leadership of the high end of the storage systems market, analysts had expected a long, dirty fight with HDS counter-suing and vowing to give as good as it got.
Yet while lawyers were turning up the heat, both companies’ sales and marketing teams were being given a different message by customers: “Make this go away: it an important barrier to the take up of storage area networks (SANs).”
Over the past two years as organisations have become convinced they can make substantial savings by networking together their dispersed storage devices, most of the storage suppliers have been swapping application programming interfaces that enable their hardware to work with each others’ SAN management software.
Not EMC and HDS – at least until they reached a settlement in March.
According to one source close to the companies, that settlement has involved HDS handing over a “massive sum” to allow it to continue to use disputed patents. But most importantly for customers of both companies, the agreement also included the swapping of key application programming interfaces (APIs) that will allow users of EMC’s SAN management software to plug HDS systems into their SAN and vice versa. The deal reaches further than just HDS as both Sun Microsystems and Hewlett-Packard are major re-distributors of its systems.
Against that backdrop of API trading, most of the large storage companies have also been working towards an industry standard through the Storage Networking Industry Association (SNIA) that will make such proprietary interfaces redundant. However, many storage analysts are already suggesting that SNIA’s Storage Management Initiative, based on the Bluefin SAN management specification, will be ‘too little, too late’ when its first iteration appears in 2004 – a lowest common denominator that will be left behind by the technologies of the dominant sector suppliers.
With control over the SAN software market at stake, there is no love lost between EMC and HDS. As HDS has progressively eroded EMC’s overwhelming dominance of the high-end storage market, users have been increasingly critical of the proprietary nature of EMC’s technology.
EMC’s share of the high-end storage market has plunged from a commanding 75% to less than 40% as a succession of big name customers, such as investment bank ABN Amro, have switched supplier for price performance reasons. In ABN Amro’s case, that switch was a very public affair.
“We’ve thrown [EMC] away and bought HDS because the total cost of ownership for the EMC box was just exceptionally high,” ABN Amro manager of IT strategic planning Ludwig See told Computerworld in May 2001. Demonstrating how pricey EMC had become, Ludwig See had calculated that it would be cheaper to break a five-year deal with EMC after one year and replace the EMC hardware with HDS, than to continue buying from the storage hardware giant.
“When EMC was all the rage, most analysts believed that EMC’s advantages in enterprise storage would endure and that its strong installed base and high software content would create sustainable barriers to entry,” suggested AG Edwards in a research note. Not so.
Since that opinion was written in 2000, EMC has responded by dramatically cutting prices and accepting that it will benefit from a certain amount of detente. As the battle for the control of the storage market moves from the hardware level to the software that manages networks of that hardware, EMC will have to learn further deft diplomatic footwork if it is to revive its dominance.