Focus On Storage Paying Off For HDS

When it comes to high-end storage, the market is dominated by two companies that go by three initials: EMC Corp. and IBM. Large companies with millions or billions of lines of mainframe code and ever-growing storage needs still turn to those two vendors first when they plan to buy major storage systems that can handle legacy data as well as open-systems data.

But a growing number of companies are taking a look--and buying products from--a third three-initial option: HDS, or Hitachi Data Systems.

"EMC is the high-value choice, IBM is the low-cost choice, and we go in through the middle," says David Roberson, the company's chief operating officer.

That approach seems to be paying off. And so has the company's effort to focus on storage after it got out of the server business last year. Once the accounts are totaled for the fiscal year, which ended March 30, company officials say storage revenue will be up more than 100% compared with a year ago; storage revenue will make up 78% of all revenue, compared with 54% last year; and the company will have shipped 7 petabytes of storage, more than double the amount shipped a year ago.

"The reorganization created a company with a singular focus," says Yankee Group analyst William P. Hurley. "HDS's growth rate has been impressive, as has its ability to enlist channel partners."

HDS later this month plans to add more partners to better compete in the high-end storage market. It's expected to add a storage-management software partner and a network-attached storage partner, which will help customers who want to manage all the types of storage (direct attached, storage area networks, and network-attached storage) from a single system. These partners will be added to a roster of channel partners such as ASG, DataLink, and GE Access.

Hurley says HDS has had success with storage service providers, a market he calls "both ripe and underserved." Storage service providers, he says, "have manifold storage needs and have been impressed with robust performance, high capacity, and native software functionality."