How do EMC's expanded manufacturing and distribution partnerships affect IBM's strategy?
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. [IBM] had tremendous growth in [the SMB market] last year. We grew roughly three times as fast in SMB as in our large accounts. Sure, we're always looking for the right kinds of partners. 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.
Do you agree with some analysts who say the IBM/Network Appliance relationship has created a sales conflict?
In general, the partnership is going extremely well. We got products to market in record time last year. I do not see conflict. To me, it's the uninformed talking to the uninformed.
Are user complaints about the industrywide high cost of storage valid?
That's contrary to what we hear. Incumbency leads to gouging. I think that some vendors out there have some hidden costs for device drivers, for maintenance, for any time they have to come in and touch the infrastructure, and hidden costs for replication on every disk array.
Disk prices have been [dropping] between 35 percent and 40 percent year to year. That's not that different from what it was before. But, let's be honest, some folks charge you for damn near everything. We do get brought into a lot of accounts where the incumbent is pricing very high and [the user is] stuck.
Since tape is an enormous part of IBM's business, how do you deal with the drop in the amount of tape being used?
I don't think it's a fair assertion. First of all, tape, while it is largely used in the archive market, isn't solely used in the archive markets. Second, the archive market is a pretty damn big market. It's four times the amount of capacity than the entire worldwide external disk market we shipped. The market is not shifting. Archive is really at the infancy of its explosion.