IBM and NetApp Team Up to Combat Rival EMC Corp

April 7, 2005
April 7, 2005 - (HOSTSEARCH.COM) - Web hosts in the dedicated hosting market will be interested in noting that IBM and Network Appliance Inc. announced a partnership recently where IBM will resell a broad line of Network Appliance storage products in order to compete with EMC Corp.

NetApp has agreed to use IBM's Tivoli software for handling storage management and will recommend IBM tape storage systems to their customers as a preferred product.

Wall Street analysts have predicted that the deal will cause EMC in return to work more closely with Cisco and Dell as competition in the corporate data storage market heats up.

"Make no mistake, EMC is clearly in our sights," Andy Monshaw, general manager of IBM's storage division, told reporters in a conference call announcing the deal.

Shares of NetApp moved up 4.6 percent to close at $28.45 on Nasdaq while IBM slipped 57 cents to $89.00, a drop of less than 1 percent. EMC fell 24 cents, or 1.9 percent, to $12.29.

"We view the relationship as a strong win-win situation wherein IBM fills the NAS hole in its portfolio...and Network Appliance gains access to IBM's strong reach especially in Europe and Asia," Piper Jaffray analyst Les Santiago wrote in a note to clients.

While the deal plays to both IBM and NetApp's respective strengths, it also is designed to overcome a weakness in IBM's portfolio of storage offerings. Monshaw said IBM was planning, over time, to withdraw its own network-attached storage products first introduced in 2000 and rely on NetApp instead.

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