The Envelope, Please ...

Gllubbbbbb!!

Ive been submerged for most of the cold winter, but what better time for me to show my tentacles than Oscar Weekend – when those folks in Hollywood trade on my good name?

Lately I've been opening more envelopes than all those scantily-clad starlets and tuxedoed stars combined, but I don't need a teleprompter to tell me how to answer your most pressing questions about the storage world:

Dear Oscar:

I keep hearing EMC Corp. (NYSE: EMC) won’t make its June ship target with the Storage Router. Can they afford to fall any further behind on virtualization?– TagmaBlue

Dear Tags: EMC insists it will ship the Storage Router on time, although it will have a new name by then (and no, it won’t be Fabric X, that’s just the code name). Some of the functionality may slip, though. We hear all the intelligence won’t make it until the second version late this year or early in 2006.

If that's true, EMC could be following the pattern IBM Corp.’s (NYSE: IBM)set with its SAN Volume Controller (SVC). IBM just upgraded SVC by adding support for more operating systems and hardware and improved migration between disk arrays -- features a lot of people were looking for when it first shipped in 2003 (see IBM Upgrades Tape, Disk, Software). And this was its sixth generation of the product!

As for lagging the competition, EMC boss Joe Tucci says he’s not worried about the headstart gained by IBM and Hitachi Data Systems (HDS)

in virtualization. “This party’s just getting started,” he said this week at a Goldman Sachs & Co. investors’ conference when asked about the SR.

Dear Oscar:Have there been any layoffs yet resulting from the McData Corp. (Nasdaq: MCDTA) / Computer Network Technology Corp. (CNT) (Nasdaq: CMNT) deal? Can we anticipate any senior executives leaving?

– Greg in San Jose

Dear Greg: There haven’t been any massive layoffs yet, although McData chopped 18 employees from its marketing and finance groups. A source close to CNT, however, says “everyone in New Jersey is jumping ship” in anticipation of McData closing the Lumberton, N.J. office after the deal closes. The Lumberton office is the old headquarters of Inrange, which CNT bought in 2003.

We know at least one CNT senior exec who’s staying. According to a recent Securities and Exchange Commission (SEC) filing by CNT, CEO Tom Hudson, who incidentally made the Byte and Switch list of Top Ten CEO Payouts last year (see 2004 Top Ten: CEO Payouts), is expected to take a senior executive role at McData after the deal closes. Hey, at $900,000 a year, who'd want to switch gigs?

Dear Oscar:What’s with all the earnings restatements? Are good accountants harder to find than simple SANs that work?

– K.P. Grimes

Dear K.P.: This is certainly a troubling trend, and it will probably get worse. In trying to stay within new regulations imposed by Sarbanes-Oxley and FAS123 governing stock-based compensation, companies are going back over their numbers, finding discrepancies and reporting them before the government finds them. Happily, none of the restatements have been linked to fraud -- so far, anyway.

In the past year, BakBone Software Inc. (Toronto: BKB), Brocade, Dot Hill Systems Corp. (Nasdaq: HILL), Maxtor Corp. (NYSE: MXO), and Veritas Software Corp. (Nasdaq: VRTS) have restated earnings. (See BakBone Slips Again, Brocade to Restate , Dot Hill Restates 2004, Maxtor Marches On, and Veritas Searches for Truth.) We expect more as other companies go back through their old statements.

Dear Oscar:Are any storage vendors selling gear with those faulty chips I keep hearing about? Wasn't EMC somehow involved?

– Connecting the Dots in Wisconsin

Dear Dots: When will you guys let up? This news is old, man! Here's everything we know about this topic:

Bottom line? EMC never named the supplier of the faulty Symmetrix chips. It never sued Fairchild. Nobody's talking. So unless your SAN smells like burning rubber, don't worry about it.

Enjoy the Oscars. Keep off the scungilli.— Oscar the Octopus