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StorageTek Swears by Services

For Storage Technology Corp. (StorageTek) (NYSE: STK), the future holds... services.

The world's dominant tape storage supplier is bulking up its services division, looking to trade on its longstanding presence with IT customers. The company hopes to tap a huge opportunity and realign itself in a market that's eschewing its traditional products.

Eula Adams, who's been VP of global services at StorageTek for a year now, says the company's professional services accounted for about 45 percent of its $2.22 billion in revenue last year. StorageTek has increased spending on the division, which covers 50 countries and includes about 2,200 employees (roughly one-third of StorageTek's total census of 7,000).

As part of its campaign, StorageTek is rolling out three kinds of "Storage Appraisal Services" this month. These services include consulting in the areas of backup and recovery, primary storage productivity, and archiving. The services include bundling of products not only from StorageTek but from other companies, such as EMC Corp. (NYSE: EMC), Hitachi Data Systems (HDS), IBM Corp. (NYSE: IBM), and Sun Microsystems Inc. (Nasdaq: SUNW).

Todd Rief, formerly senior director of corporate strategy at StorageTek, has been appointed senior director of global professional and remote services, reporting to Adams. He says IT customers are clamoring for help with backup. Many are able to back up just 65 percent of their assets, but they're using too much primary storage to do that. "Up to 80 percent of information on disk drives is replicated data, and 90 percent of that is never referenced again," Rief says.

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