Vendor profile: Hustling Hitachi Data Systems has EMC in its sights

As users struggle with managing the growth of direct-attached and networked storage under considerable cost constraints, they are looking for ways to simplify and manage their infrastructure, protect their storage assets (both the data itself and non-stop access to it) and optimize their resources to maximize their ROI. Hitachi Data Systems aims to address these issues through its TrueNorth strategy (including a management framework based on open standards), advanced technology storage systems and superior service.

History and overview

Hitachi Ltd. acquired National Advanced Systems (NAS) storage and server groups in 1989 and formed a joint venture with Electronic Data Systems (EDS) called Hitachi Data Systems (HDS), which focused on reselling Hitachi mainframes. In April 1999, Hitachi Ltd. bought out EDS's share, and HDS became a wholly owned subsidiary of Hitachi Ltd. With declining mainframe profitability industrywide, HDS shifted its focus to become a pure enterprise storage player.

Other Hitachi investments include the 2002 acquisition of Comstock Systems Corp., a small software developer that had been the source of Hitachi's SRM technology in the HiCommand product suite. Renamed Hitachi Storage Software Inc., it is now Hitachi's resource management development shop. Hitachi has also invested in storage software developer DataCore, signing an OEM agreement for its virtualization and network storage management software.

Analyst accolades

Since changing its focus to storage, HDS has gone from having a negligible market share to being one of the top players, particularly in high-end storage systems, where A.G. Edwards estimated it had 35% market share in Q1 2002. This compares with 28% for EMC and 17% for IBM.

Garnering industry kudos in 2000 for the architecture and performance of the Lightning 9900 Series, HDS successfully positioned itself as an advanced storage architectural leader. As described by The Aberdeen Group in 2001, "HDS storage has the positive attributes of its mainframe heritage: strong performance, robustness and enterprise-class software."

According to Towbin analyst C.E. Unterberg in October 2001, "EMC has attacked Hitachi's claims that it provides two to three times better performance, saying that in real-world applications there is little or no difference. But Hitachi's sales growth speaks for itself. Hitachi clearly is still growing faster than EMC."

The company's new Lightning 9900 V Series is raising the bar for competitors. According to Gartner's latest 2002 magic quadrant monolithic disk report, "With the announcement of the Lightning 9980V, HDS's Lightning series is now the undisputed leader in availability, scalability and throughput/performance." And from the Clipper Group, "The new Lightning 9900 V Series is arguably the most powerful and scalable storage consolidation solution available."

HDS is also touting its TrueNorth strategy with new relationships and early support for CIM in HiCommand Device Manager. Market researcher Illuminata describes the significance of recent announcements by noting, "Of course, it takes more than just big systems to gain market share. In addition to the size of its new arrays, the strength of HDS's statement of commitment to open standards is impressive."

Customer perceptions of HDS can be exemplified by comments such as, "HDS products do what they say they do. It's not marketing hype." HDS strengths are characterized as "design architecture and hardware performance tied with a great service and support mentality."

Customers also have high praise for HDS's customer focus. According to one, "We see HDS as a partner rather than a vendor. They understand our business and where our pain is today and tomorrow. They're proactive, and they solve business problems, not just technical problems. They listen to their customers and respond."

Current assessment

While detailed HDS financial information is not published separately from Hitachi Ltd., HDS has now more than doubled its size in terms of revenue and geographical presence. With its strong market share growth threatening incumbent leader EMC, it is interesting to note some pending lawsuits: EMC filed suit against Hitachi in April 2002 for patent infringements, and Hitachi countersued. EMC has similarly filed suit against HP, which is also countersuing.

EMC has organizational size on its side and will continue to enhance its Symmetrix line to compete against the Lightning 9900 V Series. However, with Hitachi advanced technology hardware continually raising the bar, strong progress in partnerships with Sun and HP, new alliances and improvements in software and glowing customer reports on service and support, HDS continues to grab market share for good reason.

Market area, competition and vendor approach

HDS provides enterprise storage and software for high-end and midrange environments. Software services include Point in Time (PIT) copy, synchronous and asynchronous remote mirroring and the HiCommand Management Framework.

Hardware competitors at the high end include EMC and IBM. Midrange competitors include HP/Compaq StorageWorks, EMC CLARiiON and LSI.

Value proposition

The HDS value proposition calls for simplification, protection and optimization. HDS focuses on enabling customers to simplify their storage infrastructure through consolidation, while increasing service levels and providing strong ROI through better utilization and high availability.

Partnership strategy and key relationships

Two critical relationships have helped HDS increase market share. The first is with Sun, and it calls for Sun to act as a global reseller with a co-branding agreement. The second, with HP, calls for HP to be HDS's sole OEM.

Also of significance, a newly announced joint venture with IBM will result in Hitachi taking over all hard disk drive manufacturing from IBM over three years. However, this will still leave IBM's Shark and follow-on products as competitors.

Addressing criticism in the software arena, HDS has begun to deliver on its TrueNorth strategy, announcing relationships with InterSAN Inc. for provisioning, CommVault Systems for backup and Computer Associates for integration with its BrightStor line. Other TrueNorth developer partners include Veritas, AppIQ, Precise Software Solutions and CreekPath. SAN partners include Brocade, Emulex, INRANGE, JNI, McDATA, Nishan Systems and TROIKA.

Pricing strategies

With heavy price pressure in a competitive market, HDS's pricing strategy is to provide high-end function for a corresponding high-end but competitive price.

Technology vision and future direction

Advanced technology and strong architectural design are consistently listed by customers as reasons for HDS competitive wins. The second-generation Hi-Star switched architecture of the Lightning 9900 V Series provides excellent performance even with massive amounts of data, and new virtualization assist capabilities include virtual ports and host storage domains.

In addition to well-engineered hardware, there are competitive software features: ShadowImage is a patented PIT implementation, TrueCopy provides synchronous and asynchronous remote mirroring, and NanoCopy provides PIT multi-system mirroring.

Future plans include increasing capacity - more ports and bigger drives - and connectivity capabilities - 2G-byte Fibre, iSCSI and NAS support - while reducing the cost per gigabyte of storage.

With software being its historical weak spot, HDS is responding through in-house development, acquisitions, reseller relationships and partner development. Plans revolve around TrueNorth and the standards-based HiCommand Management Framework. HiCommand Device Manager now provides a consistent and more user-friendly GUI across products, while also adding support for CIM.

The Management Framework, through CIM and SOAP, will allow integration and interoperability at the management interface level. Plans include additional modules for copy management, tuning management, provisioning management and automated policy-based management in 2003.

Current limitations

EMC is clearly ahead in the software arena (though many customers complain about its high prices), and HDS is trying to catch up. Other limitations mentioned by customers include a variety of mostly minor issues, such as:

  • The need for more ports.
  • The need for more granular choices in splitting up Fibre Channel vs. ESCON ports.
  • A shortage of back port enhancements to the 9980V in switch zoning.
  • The need to tie information on track hot spots to actual file utilization.
  • A less disruptive firmware upgrade process (though there is currently no required server downtime for upgrades).

Customers consistently volunteered that there were no limitations in support.

HDS has been criticized for not being aggressive enough in sales, and the word is that the company could have won in places it didn't. Both the Sun and HP relationships are already helping here.

Overall, HDS has come a long way in two years and now states its objective as becoming the overall storage market leader by 2004. With strong advanced technology, high quality hardware and customer service, as well as an extremely satisfied customer base, the company may well have a chance.

Barb Goldworm is an independent analyst and consultant with more than 20 years experience in the computer industry, in various technical, marketing, industry analyst and senior management positions with Novell, StorageTek, IBM and several successful startup ventures. She has been a frequent speaker at industry conferences worldwide for over 10 years and was the creator and track chairperson for the Networld+Interop track on Networked Storage. She has been a regular columnist and contributor for various trade publications as well as being frequently quoted in the press. Barb is also an instructor of SAN Solutions and Technologies classes through HGAI and heads the Publishing Advisory Board for Computer Networking for Macmillan/Pearson Education/SAMS Publishing. She can be reached at barbgoldworm@earthlink.net.

1by1.gif

Hitachi Data Systems at a glance

OFFERINGS:

Storage hardware (storage systems, SAN and NAS products), storage software (management and advanced functions) and professional services.

MANAGEMENT:

CEO: Shinjiro Iwata. president and COO: Dave Roberson. VP and Chief Technologist: Hubert Yoshida.

REVENUE AND CUSTOMER BASE:

Hitachi Ltd. FY2001 global storage revenues: $2.08B. Customer base: Over 50% of Fortune 100.

NUMBER OF EMPLOYEES:

2,700 in 170+ countries. Headquartered in Santa Clara, Calif.

HISTORY:

Founded 1989 as joint venture between Hitachi Ltd. and Electronic Data Systems (EDS); became wholly owned subsidiary of Hitachi in 1999. Acquired Comstock Systems in June 2002.
Related:

Copyright © 2003 IDG Communications, Inc.

7 inconvenient truths about the hybrid work trend
Shop Tech Products at Amazon