Re:Viewing 2001: Storage - how did things get so hard?

"EMC will remain the 800-pound gorilla. It just may have lost a little weight..."

Storage has never set the pulse racing (no matter how many times we call it sexy) but how did players who even last year excelled alongside the ebusiness boom become so, well, ordinary? Pia Heikkila has been following the market and focuses here on the daddy of storage specialists, EMC... The last 12 months have been a bit of a dog for most types of tech company. That we know. Only storage vendors were supposed to be different. What could be more fundamental to IT than the need to save data? Couldn't at least one niche be recession-proof? Most storage stalwarts have had their fair share of bad luck over the past year and seem unable to bounce back even as it comes to a close. The 800-pound gorilla of storage, EMC, was among the walking wounded of 2001. An empire hasn't exactly fallen but it's been shaken. And that's the storage story of the year. EMC's troubles began when rival IBM started on the offensive. Could the mighty EMC really be vulnerable as IBM suggested? Could EMC customers - long used to a premium marque (and premium prices) really be doing better? IBM - with its ominously named Shark product - said it was catching EMC's storage revenues and proclaimed its rival's technology no longer cutting edge (http://www.silicon.com/a47260 ). EMC dismissed IBM's claims as competitor jealousy. In the autumn, few corners of the IT world weren't rocked by the news of the Compaq-HP merger (http://www.silicon.com/a47068 ). It may not yet go through, but every pundit again turned to EMC. Could the combined entity knock EMC from the top spot? EMC remained firmly locked in its ivory tower and again declined to participate in the discussions (http://www.silicon.com/a47133 ). Meanwhile, a storage wannabe, Dell, emerged as a possible partner, or even - hushed tones now - buyer for EMC. The two companies officially announced channel co-operation, which makes sense. Dell's low-end and EMC's mid- to high-end competencies fit together well. But the industry being what it is quickly leaped on merger speculation. Both companies denied the rumours, Dell more so than EMC, which was the silent one during the are-they-aren't-they speculation (http://www.silicon.com/a48513 ). A year earlier no one could have doubted the independent future of EMC. Summer 2001 changed all that. For once, EMC posted abysmal results and had to lay off thousands of employees (http://www.silicon.com/a47594 ). Competitors had a field day (http://www.silicon.com/a48208 ). HDS began to sing its own praises and IBM's comments earlier in the year no longer looked so petty. Big Blue execs even sang the "We told you so" song on our voicemail. (They didn't really.) The bosses at EMC refused to sit back. By autumn the company had managed to gather some of its lost poise and unveiled a much-trumpeted strategy to provide software for other storage vendors' hardware (http://www.silicon.com/a48714 ). There was some scepticism awaiting this brave decision and many competitors openly doubted EMC's ability to co-operate - it hasn't exactly shown willingness to share the sandpit in the past. Some even called the initiative desperate, saying the fallen giant would do anything to boost its share price (http://www.silicon.com/a49424 ). Yet most IT pundits considered it a positive move. EMC has been riding the storage software wave for a while and now it is spreading its reach (http://www.silicon.com/a48714 ). In November, the company impressed further when it announced its split into three operational units: software, hardware and customer sectors (http://www.silicon.com/a49605 ). Pundits saw this as another positive. Could it even be that the company has finally put a troublesome year behind it and is emerging as a stronger, more focused company? It's all too easy to write off the most successful companies in a sector, and so our verdict must be that even with all its woes, EMC will remain the 800-pound gorilla. It just may have lost a little weight - and that's no bad thing. Here's to a bright 2002 for EMC and all its friends and foes in the storage sector. The need for storage isn't about to disappear.