Compaq Buys Into the High End of Storage

When Compaq Computer Corp. completed its acquisition of Digital Equipment Corp. in June, among the spoils were Digital’s high-end server and network technologies. The acquisition also vaulted Compaq into a top-tier position in the storage marketplace, thanks to the addition of Digital's StorageWorks subsystems. StorageWorks consists of a range of high-end RAID systems, sold primarily into high-end Unix sites.

Since Compaq's storage solutions grew up with the company in the PC server world, the company had a very weak foothold in high-end solutions. With the Digital acquisition, "Compaq makes a very big step into the Unix storage subsystem world," says James Porter, analyst with Disk/Trend (Mountain View, Calif.). "This supplements the leadership which Compaq already had on the NT and Novell-based world. Compaq had been trying to penetrate this 'upper middle- class' part of the market, but they were getting slow results."

In fact, over the past year, Compaq was "losing business in multivendor storage," admits Bob Davis, director of enterprise storage marketing for Compaq. One of Compaq's main rivals was Digital itself, which "had the means and engineering resources to certify their platforms on multiple vendors' servers," he says.

Combined storage revenues for Compaq and Digital totaled more than $4.9 billion in 1997, according to IDC (Framingham, Mass.). "The coming together of Compaq and Digital instantly creates a new force in storage that goes beyond the combined size of their current business," says John McArthur, program director for IDC storage research."

Compaq is currently certifying Digital's StorageWorks RAID Array 7000 and Enterprise Storage Array 10000 to interface with Compaq ProLiant servers running Windows NT Server, configured as standalone servers or with Microsoft Cluster Server. More integrated solutions will follow, Compaq's Davis says. However, Compaq does not plan to "discontinue any product or technology simply because we merged the two companies. We'll support all products until their natural life cycle comes to an end." New StorageWorks solutions will be single products from the combined company, Davis adds.

Compaq seeks to position StorageWorks as a means to introduce high-end capabilities into Windows NT sites. Such is the case with Kaiser Permanente, a San Francisco-based HMO. Kaiser Permanente recently implemented ProLiant-ready RAID Array 7000 subsystems to complement Compaq storage products already in use for departmental computing. "Kaiser was able to integrate Compaq servers, StorageWorks solutions, and Microsoft cluster software in 87 locations for one of the largest Windows NT-based cluster implementations in the world," says Rob Clark, program manager for Kaiser's distributed computing infrastructure. These systems play a critical role in providing information to physicians and health-plan administrators on a 24-hour-per-day basis.

However, rapid commoditization and falling prices in storage subsystems technology has caused some StorageWorks customers to drift away from Digital's solutions. "We've become less of a StorageWorks facility over the last year," relates Cole Young, vice president of system services for The Potomac Group Inc. (TPG, Nashville, Tenn.), which provides Medicaid eligibility verification services to doctors and hospitals in 23 states. TPG relies on four AlphaServers running SQL Server databases on Windows NT to manage and maintain this data. For an impending expansion of the company's storage systems, Young finds more value in adding high-capacity, volume-priced IDE drives than in adding the more pricey StorageWorks solutions. "I don't have as big a need for that technology anymore," he says. "We're a PC-based shop, not a typical big StorageWorks shop."

However, Young feels that Compaq's acquisition of the technology can only eventually help push such high-end solutions into the NT space. "I can't imagine a Compaq solution being any more expensive than Digital's," he states. "As far as performance goes, I can't see it being any slower than Digital's. As far as reliability goes, Compaq has a tremendous track record. Right off the top, it has to be better."