Hitachi Data Systems Inc. (HDS) is laying off sales engineers and
managers in droves in an effort to reorganize the company around
"solution and vertical specialization areas," such as healthcare
and content management, according to insiders familiar with the
plans.
HDS officials claim this is not a "reduction in force" as the
company is creating "many new jobs in new categories." It declined
to say how many sales people have been laid off.
"It's a disaster … they are losing their best people who truly
understand storage," said an industry source close to HDS. The
shakeup was orchestrated by Scott Genereux, executive vice
president of worldwide sales, marketing and support at HDS.
Mary Ann Galo, director of public relations at HDS, said in an
email that for the fourth consecutive quarter, "Hitachi has
demonstrated the strength of its integrated product and solutions
portfolio -- and the benefits of its global sales expansion and new
consultative sales approach -- continuing to grow faster than EMC,
IBM and clearly taking material market share." She said that the
changes being made in the field organization "are designed to
further accelerate this growth and make us even more formidable
competitors."
Meanwhile, HDS is also said to be working through the due
diligence process to acquire high-end
network attached storage (NAS) supplier,
BlueArc Inc. Neither company would confirm nor deny the rumor. A
former BlueArc employee, who preferred to remain anonymous, said
that there were discussions with HDS two to three years ago, but
they didn't go anywhere. "The company's under new management now
and it would be a logical move," he said.
If HDS does buy BlueArc, it would follow on the heels of its
success selling a NAS blade for its Lightning and TagmaStore
storage systems. In the latest Diogenes Labs and Storage
magazine Quality Awards for NAS, HDS users awarded the blade top
marks. [Check out this
story for more details.] But HDS might be
looking to beef up its NAS offering beyond a blade.
"HDS has a poor NAS portfolio today and there are not that many
places they can turn to," said Arun Taneja, founder and consulting
analyst of the Taneja Group. He notes that IBM already uses Network
Appliance Inc.'s (NetApp) product line. Hewlett-Packard Co. (HP)
has PolyServe. EMC is partnering with Ibrix Inc. for scalable NAS
and has its own strong offering in Celera. Dell Inc. has its own
product line based on WSS 2003. "For HDS there just aren't that
many dancing partners. Isilon is too expensive already. Given that,
BlueArc is not a bad one to own."
BlueArc is located in San Jose, Calif., just down the road from
HDS, which is in Santa Clara. Founded in 1998 at the height of the
dot-com bubble, BlueArc has pulled in over $200 million in venture
capital for its Titan high-end NAS systems. The company closed $29
million of funding in June and was still not profitable at
that point. BlueArc said it has 160 customers in total.
John Parish, associate vice president in charge of terminal
technology at Dallas-Fort Worth International Airport Board, is an
HDS Thunder user with about a terabyte of storage on this system.
The airport also has two NAS filers from NetApp.
"We're happy with them, but we'd definitely be interested in
buying NAS from Hitachi, it always makes it easier to buy from one
vendor," Parish said.
Sun rumors
On a separate but related note, Wall Street and industry
analysts were reporting late last week that HDS is working on some
kind of deal with Sun Microsystems Inc.
"The computer hardware and software maker [Sun] may be gearing
up to sell its entire storage business, including StorageTek, which
it recently acquired," said Canaccord Adams in a research note to
investors.
HDS has been named as a potential acquirer, but the move is
extremely unlikely according to most analysts, as Sun just forked
out $4.1 billion for StorageTek. Also, "HDS almost never makes
acquisitions," noted Stephanie Balaouras, analyst with Forrester
Research. "If they need a technology, they simply build it because
they can leverage the research and development strength of their
parent company, Hitachi Ltd."
The rumor was also spun the other way, suggesting HDS might try
to sell to Sun. Neither company would comment on the speculation.
David Scott, CEO of 3PARdata Inc., said the two companies might be
looking at a potential joint venture with HDS providing disk
storage and Sun the tape component. However, he said these kinds of
deals are always very difficult to structure on the business side
so that both companies feel they are getting equal value.