HP, Hitachi Renew Vows

Hewlett-Packard Co. (NYSE: HPQ) -- citing, in part, questions raised by competitors about its commitment to the high-end storage system it licenses from Hitachi Ltd. (NYSE: HIT; Paris: PHA) -- has extended its original equipment manufacturer (OEM) deal with the Japanese hardware maker through 2008.

HP's OEM agreement with Hitachi, originally signed in May 1999, would have ended in 2005. The company tacked on three more years to dispel any customer concerns about whether HP will continue to support the Hitachi Lightning array, which it resells as the StorageWorks XP, for at least the next few years, says Pete Korce, director of HP's online storage division.

"Customers really want to make sure when they buy an enterprise-class product that you're going to be around for a long time, because it's a large investment," he says. "We also were getting competitors instilling that question in our customers." Hmmm... any guesses as to who Hitachi Data Systems (HDS), the sales and marketing arm for Hitachi's enterprise storage systems and software outside of Japan. Sun's OEM agreement with Hitachi currently extends through mid-2004.

Korce says HP provides additional differentiation for the XP line by wrapping its own software and services around it. "Because we own the server and we own the storage, we are in the best position to put together a true end-to-end solution," he says [ed. note: thereby setting off the Byte and Switch Lingo-Alert System].

For example, he points to HP's recently introduced multisite disaster-tolerant setup, which can ensure important data is online and available even after a major catastrophe. The option, which starts at $6 million for a three-site configuration, includes XP storage systems, servers, and storage networking equipment (see HP Preps Pricey Disaster Setup).— Todd Spangler, US Editor, Byte and Switch