HP, Qwest ink data hosting agreement

Hewlett-Packard Co. and Qwest Communications International Inc.

Hewlett-Packard Co. and Qwest Communications International Inc. have joined forces in a billion-dollar deal to provide outsourced data storage services.

Under terms of the deal, announced Wednesday and expected to generate $1.5 billion in revenue over three years, the two companies will sell HP storage hardware and software products as a packaged pay-as-you-go storage utility to network services provider Qwest's customers.

"What we are doing here is making a play to change the rules of the game," said Nick Earle, senior vice president and chief marketing officer for HP's Enterprise Computing Business Unit, in a conference call. "It's our first move into the storage-on-demand marketplace. We want to be the first to offer storage-on-demand over extremely fast, high-bandwidth Internet access."

Specifically, HP and Qwest will offer Internet-based storage utility services, disaster-recovery services and traditional storage. HP, of Palo Alto, Calif., will provide Qwest customers with software including HP SureStore Secure Manager XP for data security, SureStore E Business Copy XP for "zero downtime" copying and data transfer, and SureStore E Continuous Access XP for remote data copying. HP hardware offered will include the SureStore E Disk Array XP256 and Fibre Channel switches.

Earle could not give an exact dollar value on the amount of software and hardware to be supplied to Qwest.

Big data center push

To bolster the offerings, Qwest also announced plans to increase the number of its Cyber Center data facilities. The Denver-based company wants to build seven new data centers in Atlanta, Chicago, Dallas, Detroit, Philadelphia, Tampa, and Sterling, Va. Qwest also plans to expand its California data centers in Burbank and Sunnyvale.

Last May, when Qwest and HP announced an application service provider agreement, Qwest officials said they were building seven facilities nationwide. With the seven new centers, Qwest will have a total of 1.8 million square feet of hosting space throughout the country.

"We are seeing tremendous growth in the hosting core of our business today as broadband Internet applications in the marketplace continue to explode," said Lewis Wilks, president of Qwest's Internet and multimedia markets. "The Qwest and HP Internet-based storage solution really lets businesses forecast and manage their IT cost much more effectively than in the current environment."

Wilks estimated that, in the next five years, 90 percent of all legacy data storage would be Internet-based.

"What that says is all existing data in the world will be available on the Internet," he said.