The two computer giants will sell each other's products and work together to create industry-standard open storage networking solutions such as Storage Area Networks (Sans).
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The rise of the Internet and e-business has created an increasing demand for large storage systems. Under the agreement, Compaq will market IBM's high-end Shark enterprise storage servers together with Tivoli systems management software. IBM will sell Compaq's storage systems and software for mid-range Unix and Windows systems.
According to IDC figures, Compaq led the world market for storage in 1999. EMC was the second largest seller in this market and IBM came in third.
Josh Krischer, research director, Gartner Enterprise Storage Centralised Operation Europe, sees the IBM/Compaq deal as a very positive move. "The main problem has been that there are no fixed standards in storage area networking," he says.
"Each supplier has its own standard. Users can't consolidate storage without islands. If a customer starts with one standard, they are locked in and lose leverage for future purchases."
Compaq and IBM were founder members of the Storage Network Industry Association (SNIA). Twelve storage manufacturers got together in April 1999 to form the association, which now has 100 members. Its aim is to resolve a number of existing problems with both hardware interoperability and software management systems.
Donal Madden, Compaq's storage manager in the UK and Ireland, says the link-up with IBM will not form a rival standard to SNIA. "Anything we do will be submitted to SNIA," he says.
"But the organisation alone doesn't have the financial clout to make standards happen.
"Storage is now network-based rather than server attached. Compaq is strong in NT and Unix, whereas IBM has the mainframes. We will have engineering teams working together to get interoperability between mainframes and open systems. We will write application program interfaces for the entire industry."
Madden adds that as proprietary walls break down in the storage market, costs for the user will come down. "Open standards will increase competition and drive down costs," he says.
The first fruits of the marriage are expected at the beginning of 2001, when the companies plan to release storage virtualisation software that will combine storage on Compaq and IBM systems.