Server Vendors Push Storage Ties

The push to sell more storage with servers comes at the same time that Hopkinton, Mass.-based EMC, the top storage hardware vendor without a server offering, continues to take market share from its competitors.

Carl Palmieri, CEO of Computer Resolutions, a Bridgeport, Conn.-based solution provider, said he does not see storage being driven by server sales, despite vendor efforts. "But they keep trying," Palmieri said. "They continue to offer incentives to do it. I think [it] might work some day."

If market share is any indication, the incentives are not working. In a recent report from research firm IDC, EMC grew its storage hardware market share by 13.4 percent in the fourth quarter of 2004 at the expense of Hewlett-Packard, Palo Alto, Calif., and IBM, Armonk, N.Y. Despite server sales, HP and IBM saw their market shares drop 1.5 percent and 8.7 percent, respectively.

IBM, however, is still planning to unveil incentives aimed at increasing the attach rate of Tivoli storage software to its server sales. The company plans to unveil this month its Distribution Incentive Option, which ties extra margins on Tivoli software to the attach rates, said Michael Gerentine, worldwide director of channel strategy at IBM Tivoli.

Gerentine declined to specify what the margin bonus would be, but he said it will be tied to closing deals for Tivoli Storage Manager and Tivoli Productivity Center to IBM xSeries and pSeries servers. The Tivoli attach rate for IBM server sales is in the single digits, he said.

Gerentine said recent increases in IBM server sales bode well for the vendor's program.

According to Gartner Dataquest, IBM shipped $1.8 billion worth of servers in the fourth quarter of 2004, making it the top server vendor in the United States.

Worldwide, IBM was the No. 1 server vendor last year in terms of units shipped, with about 1.1 million servers--an increase of more than 21 percent over 2003.

Meanwhile, HP last week introduced a new controller for its servers aimed at easing the attachment of HP storage by providing a unified framework for connecting networks, storage and high-performance clustering over a single connection point.