StorageTek Gives Up on HP

Future lies with Overland

ComputerWire: IT Industry Intelligence

Storage Technology Corp has given up on its OEM relationship with Hewlett-Packard Co, according to CEO Pat Martin. Louisville, Colorado-based StorageTek has been supplying HP with tape-automation products, but it would appear that the post-merger company will go with Compaq's OEM partner Overland Data Systems instead.

No formal announcement has been made by HP in the wake of its acquisition of Compaq Computer Corp. According to Martin, HP's procurement section is still talking in terms of a competitive tender. However, the new storage management arm, which is dominated by ex-Compaq people, has been making it clear in briefings that the future lies with Overland. StorageTek has been encouraged to persist with a tender by its supporters within the old HP storage group but Martin acknowledged that this is a forlorn hope.

Martin characterized HP's decision to go with Overland as one based on the prejudices of the new management regime. Certainly, at first glance, the fact that HP actually manufactures its own drives for the StorageTek libraries suggests that it ought to have been the front-runner after the merger. Compaq, on the other hand, has never had a direct interest in tape.

However, Overland's ability to mix and match LTO and S/DLT tape formats in its tape libraries offers a substantial advantage in the context of the merger. HP was one of the developers of the LTO standard, but Compaq has typically shipped DLT devices. The merged entity has a commitment to LTO and Overland might be considered to offer a smoother transition path.

With its Neo series of tape libraries, Overland is pushing into the higher end of the tape automation market more traditionally associated with StorageTek. However, at the very top end it would appear that HP will also retain Compaq's OEM relationship with StorageTek's arch rival Quantum Corp for the top-end libraries that Compaq badges as its ESL range.

Whatever the reasoning, the way in which this decision has been made is a clear illustration of the way in which Compaq has seized control of the combined storage business. For his part, Martin made light of HP's decision, which he said is sad but not critical for his business. Accentuating the positive, he pointed to the opportunities it presents to sell directly to HP customers, something it was prevented from doing previously under the terms of its OEM deal.

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