This Could Put Storagetek Into OverdriveJohn W. Verity
Back in the 1960s and 1970s, when companies wanted to sell disk and tape drives to IBM-mainframe customers, the strategy was simple: Show that the lower-priced replacement did just what IBM's did--preferably in identical fashion--only better. Back then, companies such as Storage Technology didn't dare deviate too far from Big Blue's path.
Not anymore. On Jan. 28, Storage Technology Corp. plans to launch a data-storage system that does everything IBM's big 3390 disk drives do and more, yet in an entirely different manner. IBM's drives, while technically impressive, are essentially just advanced versions of the "Winchester" design that Big Blue pioneered in 1973. Rather than mimic the 3390, a prohibitively costly tack at this point, StorageTek aims to get superior results by chaining together scores of 5 1/4-inch Hewlett-Packard drives under the control of a specially programmed computer. IBM is expected to sell a similar "disk array" in about two years, but many customers won't wait, says StorageTek Chairman Ryal R. Poppa (pronounced "poppy"): "They're more sophisticated. They're willing to try new things."
JUKEBOX LIBRARY. The StorageTek system, code-named Iceberg for the unheated building where it originated, could accelerate the comeback the $1.7 billion company has made since emerging from Chapter 11 reorganization in 1987. After impoverishing itself in a failed attempt to clone an entire IBM mainframe, the company has bounced back with an automated tape library. The jukebox-like device uses a robot arm to retrieve tape cassettes storing older files, such as last year's invoices. Because IBM still has nothing similar to sell, StorageTek has won 90% of that $1 billion-plus market.
Market analysts say Iceberg should give StorageTek a good chance of boosting its share of the $10-billion mainframe-disk market from under 2% to well over 10% by 1994. Anticipation has already driven its stock up a slope almost as steep as the mountains just west of its Louisville (Colo.) headquarters (chart). Securities analysts such as Soundview Financial Group's Stephen Cohen predict "tremendous" demand when Iceberg shipments begin around midyear. Says Poppa: "We've caught the imagination of the industry."
And not by accident. For more than a year, Poppa and other executives have been talking up Iceberg to some 1,200 tape-library customers. The company even leased a Falcon jet, dubbed CIO Express, just to ferry chief information officers to Louisville. StorageTek "will do beautifully" with Iceberg, says James R. Porter, president of Disk/Trend Inc., a Mountain View (Calif.) industry watcher. "The only question is: `How long will it take IBM to get its act together?"' The disk-array concept, based on a tightly regimented gang of small, cheap disk drives, has been gestating for almost a decade. Array products are already available for mini- and supercomputers, and several dozen variations are under development in the U.S. and Japan. "It's the coming thing," says Porter. But Iceberg, controlled by its own mainframe-caliber computer, aims to be the most sophisticated array yet.
EASY BACKUP. Its main appeal won't be simply cost, says Poppa, though at $7 to $9 per megabyte, the $700,000-and-up machine should beat the $11 per meg of IBM's 3390s. Instead, StorageTek is emphasizing its unprecedented reliability--a major draw for customers such as airlines and banks that depend on mainframes 24 hours a day. By spreading data over as many as 128 disk drives, each storing 1,600 megabytes, Iceberg is designed to be virtually immune to the infrequent but inevitable failure of its individual drives. A drive can fail, but the data is safe. In addition, Iceberg allows data centers to make backup copies of their "live" files more frequently, without interrupting ongoing work. Conventional disk setups require hours of computer time to make daily backups.
StorageTek's main risk, say analysts, is that Iceberg won't live up to its hype. No company has ever built a disk array this complex for commercial work. Poppa says IBM salespeople, lacking anything comparable, have been trying to "spread FUD"--industry slang for fear, uncertainty, and doubt--for 18 months. StorageTek recently decided on three more months of testing to make sure it doesn't ship a lemon, as it did eight years ago when it cloned IBM's 3380 disk drive--a move that pushed it toward bankruptcy.
Even with the delay, analysts predict shipments of as many as 150 units this year. Next year, a StorageTek executive says shipments will double every quarter, reaching some 3,000 a year by the end of 1994. At that rate, Iceberg will be making a lot of lettuce.
To continue reading this article you must be a Bloomberg Professional Service Subscriber.
If you believe that you may have received this message in error please let us know.