EMC's go-between takes on storage rivals

EMC announced its "Automated Information Storage" (AutoIS) strategy in August, but now the first products are arriving. At an event at New York's Hudson Theater, EMC Chief Executive Joe Tucci plans to release "WideSky," software that will let EMC's control software govern storage systems from IBM, Hitachi Data Systems, Hewlett-Packard, Sun Microsystems and Compaq Computer, according to a source familiar with the plan.

Those are the very companies that have been putting intense pressure on EMC, whose flagship Symmetrix product often costs millions of dollars and is used to store essential corporate data such as a bank's accounts.

But EMC's hardware profit margins have plummeted as it cut prices to try to maintain market share in the face of the economic downturn. Pricing pressure has come from IBM's "Shark" and Hitachi's "Lightning" storage system. Hewlett-Packard and Sun Microsystems also use the Hitachi product as the basis for their storage systems.

With the pricing pressure, EMC's move to boost software revenue has taken on greater urgency.

"It's clear that in the current markets, premium pricing is practically impossible to sustain on hardware," said Gartner analyst Nick Allen. "They have been shifting revenue to software...The AutoIS announcement coming up could potentially really stem the tide of (profit) margin erosion."

An EMC representative declined to comment on the unannounced products.

Accompanying EMC's extension to rival systems will be an increased openness to have others tap into EMC products, something of a departure for the company, which thus far only has let others do so if they sign a license.

"EMC is going on a new journey," Allen said. "They're going to start managing other people's storage as well as their own and be more open about their stuff."

EMC isn't the only company revamping its storage plans to accommodate competing products. IBM's Storage Tank and HP's Federated Storage Area Management initiatives are ways to join several storage systems into a larger pool; both companies explicitly allow competing products.

When technology companies expand their ambitions, it's often into someone else's turf. EMC is used to doing battle with IBM and Hitachi, but improving management software could strain relations with a specialist in that area, Veritas.

"This announcement clearly sets EMC on a collision course with Veritas," Allen said.

Indeed, EMC has said one of the advantages of AutoIS is the ability for customers to run storage systems closer to their top capacity because storage systems can be reconfigured more easily. That's the exact same argument Veritas has used.

Support for other storage devices likely won't be immediate, said UBS Warburg analyst Don Young, probably arriving in the second quarter of 2002.

One potential pitfall with EMC's approach is that the company is concentrating on software for storage systems, but the industry is shifting its emphasis to management software that runs on the server. "We expect more server competitors to come at EMC with server-based software and increase competition," Young said.

HP makes this very argument with its OpenView management software, which can be used to manage storage systems from HP, EMC and others. "EMC in my mind is playing catch-up," said Magdy Assem, HP's marketing manager for OpenView.

WideSky's abilities will show up in storage management software through several improvements to its ControlCenter software, which lets administrators govern storage systems and the networks that join them to servers. ControlCenter can also discover new storage devices added to a network, monitor performance and automatically compensate for problems such as communication bottlenecks.

The new ControlCenter Open Edition will expand its abilities to non-EMC storage systems and storage network components, a source familiar with the plan said.

One improvement to ControlCenter will be the Common Array Manager, which discovers and monitors competitors' storage systems and can trigger alerts.

But there are difficulties in controlling other companies' storage devices, said Rod Mathews, director of investor relations at Network Appliance, a company that competes with EMC's lower-end products.

For example, one of EMC's most popular software packages is Symmetrix Remote Data Facility (SRDF), in which data written to one storage system is simultaneously written to a "mirror" system elsewhere, protecting against hardware failures or disasters.

Mirroring an EMC system with a Hitachi system is difficult because of differences in the hardware, Mathews said. "I don't see that as being technically feasible," he said.