EMC to battle for mid-range share

With hopes to steal market share in the potentially lucrative mid-range storage market, EMC Corp. on Monday introduced the newest member in its line of modular storage systems. The mid-range box is the first from EMC Clariion in three years and will compete with a number of competitive offerings that have arrived over the past few years.

Considered by many to being playing catch-up to its competitors – IBM Corp., Sun Microsystems Inc., and Hewlett-Packard Co. – EMC’s new system is dubbed the CX600. The system is on the higher end of the company’s Clariion line and effectively replaces the FC4700 as EMC’s largest mid-range storage unit. It also leapfrogs much of the competition in certain areas and clearly is a significant improvement over the FC4700.

“The Clariion wasn’t meeting some of the requirements [of the modular market],” said Mike Wytenus, director of information platforms marketing at EMC. “The CX600 is the most powerful Clariion with 2.4 times the capacity of the FC4700.”

Additionally, the CX600 also has improved drive density, boasting a 50 percent increase over the FC4700, Wytenus said. Other new features include four Intel Corp. 2GHz processors and eight front-end fiber channel ports.

On the software side, many of the CX600 advancements come down from the Symmetrix family – EMC’s line of systems designed for higher capacity needs of larger enterprises. Specifically, EMC’s PowerPath load balancing and failover software has made its way to EMC’s Clariion line.

Despite the hardware and software advancements of the CX600, many find EMC’s packaging changes of the Clariion and new reseller agreements most significant.

“EMC has made some packaging changes in the look and the feel of the product,” said Randy Kern, analyst at the Evaluator Group based in Greenwood Village, Colo. Alluding to EMC’s reseller agreement with Dell Computer Corp. announced in October 2001, Kern added “It is more attractive for Dell in reselling the system.”

According to Kern, the CX600 looks more like Dell’s line of servers and is expected to be changed again in three years. This strategy is likely born out of knowledge EMC has obtained from Dell, a company that has thrived with a low-cost, high-volume, and just-in-time manufacturing strategy. However, there are some, namely competitors, that question the viability of EMC’s strategy given its legacy as a company that derives much of its revenue from a high margin model.

“It will be interesting to see them focus on an area they haven’t focused on lately,” said Roland Hagan, vice president of mid-market storage at IBM storage systems group. “The Dell partnership is evidence that EMC acknowledges they need help.”

Hagan explained that in working with Dell and resellers, EMC effectively has two business models. He added that EMC has historically done very little channel partnering and believes it will be challenging to attempt to SANs in a model designed for commodity products.

“A SAN is very complex,” said Hagan. “You need services and solutions in order to sell to the small and medium business market.”

Hagan points to IBM’s worldwide services division and its 140 partners as being a boon for IBM in the race to capture the mid-range market that some estimate at being worth US$15.7 billion. And he added that Dell, in his eyes, has yet to prove it can provide services.

The sentiments over at Hewlett Packard echo IBM’s.

“EMC had missed the boat and are now playing catch up,” said Peter Korce, the enterprise array business manager at Hewlett Packard. “EMC was focused on Symmetrix and the world changed.”

Korce downplays the significance of the announcement. “It is not unexpected,” said Korce. “They took technology and put it in a smaller array.”

Korce estimates that Hewlett-Packard, including its Compaq acquisition, currently has a 40 percent share of the mid-range market, while EMC only has a 6 percent share, behind Sun Microsystems.

Scarcely any of this bothers EMC though, which seems to understand is in the unfamiliar role of underdog.

EMC has signed Fujitsu Ltd., Unisys Corp., Avnet, and Arrow Electronics Inc. as distributors of the CX600 and EMC’s forthcoming additions to the Clariion line that will share the same software image across the entire family – something that Kern believes will help EMC is attracting new customers and selling to old ones.

“One of the best things [in this announcement] is EMC has kept all the software the same across the family,” said Kern. “This is significant to customers who already had Clariion. It’s very significant.”

Some EMC customers already agree. Tim Hayes, manager of network systems at Rutgers University in New Jersey and a current EMC customer, likes what he hears about the Cx600.

“The performance of the Cx600 is of interest to us,” said Hayes, who currently runs EMC’s FC4700 and a Symmetrix 8530 in the university’s network. “If we wanted to further consolidate all of our data stores, the CX600 would be a good fit.”

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