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SNW - SMB - IBM execs on price gouging, EMC tie-ups

06.04.2006
EMC Corp. made two large partnership announcements this week: It signed an OEM agreement with Intel, which will distribute its low-end arrays, and a deal with NEC, which will help it manufacture new low-end storage systems. Analysts agree the deals bolster EMC's already growing presence in the small and mid-sized business (SMB) market. With that backdrop, Andy Monshaw, general manager of system storage at IBM, and Laura Sanders, IBM's vice president of systems storage products and solutions, both pointed to soon-to-be released IDC numbers that will show their overall storage sales outpacing EMC's. They spoke withComputerworld at Storage Networking World in San Diego about the pressure from IBM's chief storage rival.

How do EMC's expanded manufacturing and distribution partnerships effect IBM's strategy?

Monshaw: Number one, they're distributing a product that nobody appears to want, which is a single-controller, low-end storage device. It didn't work with Dell, and now I think they're seeking other partners. Two, they're going to be so over distributed in terms of the low end that it will completely commoditize it. Third, it seems to me this is the beginning to the end of its relationship with Dell. Dell chose Engenio [Information Technologies] on the low end, so I think perhaps we're seeing our first signs of divorce here.As far as us? We had tremendous growth in SMB last year. We grew roughly three times as fast in SMB as in our large accounts last year. Sure, we're always looking for the right kinds of partners to go to market with. We just signed a very interesting alliance with a very, very large industry player in one of the key segments. I don't think I can talk about it yet.

Is it storage?

Monshaw: I don't think we can talk about it yet.

The IBM and NetApp partnership -- some analysts have pointed to conflict between the two of you in the sales field. What are you doing about that?