On August 22, Michael Capellas, Compaq's CEO, cut the ribbon on two new laboratories in the Colorado Springs, Colorado, facility that will focus on network storage. The $12-million investment adds 150 employees to a facility that Compaq acquired when it purchased Digital Equipment in 1998. In these new labs, vendors can work with Compaq to provide storage networking interoperability. The labs also provide testing for Compaq's Enterprise Network Storage Architecture (ENSA).

At an August 18 press conference for the new laboratories, Mark Lewis, Compaq's vice president of Enterprise Storage, predicted what the storage industry will look like by 2003:

  • The majority of backups will no longer be to tape (disk will become the predominant backup/restore medium).
  • 75 percent of all IT dollars will be spent on storage.
  • 85 percent of companies will be using network storage utilities for the bulk of their storage needs.
  • 75 percent of companies will have to reorganize to support changes in storage.

To support his predictions of growth, Lewis said that in 1996, 24 percent of all dollars spent in the storage/server mix went to storage. By 1999, the percent spent on storage had risen to 50.

Nick Allen, Gartner Group's vice president of Storage Technologies, also spoke at this press conference. He confirmed rising storage expenditures and offered Gartner's analysis of the savings involved in moving to consolidated storage solutions. Those savings, ranked in decreasing order, include reduced downtime costs, reduced management costs, backup and restore savings, savings in environmental infrastructure, and lower overall purchase price. Surprisingly not on this list were factors such as decreased time to market, increased flexibility, and the ability to respond quickly to business opportunities.

At Compaq's new labs, I saw Compaq's hardware and software offerings. In addition to a lot of Highground software relabeled as Compaq SANWorks, I saw some unique Compaq offerings. Compaq is strong in midrange storage, with its Digital Equipment-originated StorageWorks line (which scales into the 5TB to 6TB range). Compaq is working hard to provide tools for storage virtualization—turning all storage into storage pools through intelligent host bus adapters (due out in mid-2001). The company is also working on its VersaStor Technology, which will support moving storage transparently from one device to another while maintaining access to the information that storage contains. VeraStor Technology will also support load balancing. Because this technology blurs the advantages that consolidated storage holds in terms of reduced staffing and storage pooling, it's a strategic product. VersaStor Technology requires a Storage Area Network (SAN) and uses the nifty new Compaq SAN appliance. Think of Compaq's SAN appliance as the equivalent of a hi-fi receiver in a fancy stereo system.

One interesting new Compaq product is its Network Attached Storage (NAS) offering, the TaskSmart N-Series NAS appliance server (see the August 21, 2000, Storage UPDATE News and Views for more information). This product is a tuned version of Windows 2000 Embedded, essentially a specialized Proliant server. At $34,710 for an entry-level 72GB server (it scales to 1TB), it's still too expensive for widespread general adoption.

Compaq has a unique position in the storage industry, in part because it acquired Digital Equipment and in part because of its position as the world's largest volume computer supplier. However, as Lewis admits: "We need a more visible presence in the storage industry, and we need to be a more credible player in enterprise storage." Compaq's goal is to take on EMC and other large storage vendors. "We've taken all of the functionality of EMC and put it in a lower-price offering," says Lewis. Compaq figures EMC is vulnerable on price and prizes EMC enterprise business.

EMC is probably not vulnerable on price, service, or support. But the company might be vulnerable on the low end of storage against a vendor willing to establish a modular small storage server that could be built into any size storage server through aggregation. Compaq could be that vendor, a Network Appliances on steroids, but that isn't the company's current vision.