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HP Storage Gets off the Deck

To judge by its latest earnings report, Hewlett-Packards new storage strategy is getting positive reviews from customers. (See HP Reports Earnings .)

HP, which revamped its EVA midrange SAN system and added a slew of other storage products primarily through partnerships with startups, reported late Thursday that its storage revenues increased 17 percent both year-over-year and from the previous quarter. (See High Hopes in Palo Alto and HP Upgrade Features OEM Crowd.)

Storage, which floundered under previous HP CEO Carly Fiorina, has rebounded since Mark Hurd took over the company in March. (See HP Storage Slammed.) HP upgraded its EVA systems for the first time in more than two years in May, and added products such as high-end NAS, virtual tape, WAN acceleration, and backup services through partnerships with PolyServe, Sepaton, Riverbed, and Asigra. HP also acquired storage management vendor AppIQ in September. (See HP Chomps AppIQ & Peregrine.)

While executives of rival storage companies snicker that HP’s partner strategy shows a lack of innovation, it hasn’t hurt sales. According to analyst Aaron Rakers of A.G. Edwards, HP picked up 1.3 percent of market share in external disk storage, edging up over 20 percent. Rakers estimates that EMC, IBM, and Sun lost share slightly, while Dell, Network Appliance, and Hitachi Data Systems joined HP in picking up share last quarter.

Most of HP’s success is coming in the midrange, with Wall Street analysts placing revenue growth at 44 percent year-over-year with high-end XP system revenues increasing 32 percent. HP's XP systems come from an OEM agreement with Hitachi.

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