Storage:

Struggling EMC Unveils Low-Cost Data Storage Product

As reported by Tim McLaughlin, EMC Corp, which became the world's dominant data-storage firm selling pricey refrigerator-sized machines, unveiled a low-cost product designed for storing archived digital information such as X-rays, canceled bank checks and corporate e-mail.

EMC's Centera product is being launched as the market for high-end data storage has turned into a vicious price war. EMC insiders are saying Centera could generate as much as $1 billion in revenue over the next 18 months.

Centera software and hardware costs about $210,000 and comes with five usable terabytes, or enough capacity to store and protect 625,000 X-rays. EMC's flagship Symmetrix device costs more than $1 million, storing information that constantly changes such as a bank account balance.

The Hopkinton, Massachusetts-based company, whose stock sank to a four-year low last Friday, needs a boost because corporations are shunning pricey machines like the Symmetrix, which accounts for the bulk of EMC's revenue.

EMC has been waylaid by a global spending downturn for the machines and software that store the most vital computer network traffic of corporations. EMC also lost some market share to archrival IBM Corp and Hitachi Data Systems, a unit of Hitachi Ltd, last year.

After going 12 years without a quarterly loss, EMC has been in the red three consecutive quarters. Its stock, a Wall Street darling in the 1990s, closed at $9.13 last Friday.

Centera focuses on a neglected, but exploding area of data storage that EMC describes as "fixed data," or information that doesn't change once it is created.

That type of information, for the most part, has been stored offline at a prohibitive cost for corporations to keep and access, Jim Rothnie, EMC's chief technology officer, told Reuters.

But he said powerful forces are turning canceled checks, medical images, books, videos and seismic readings, for example, into digital content that can be accessed over computer networks.

EMC built Centera from scratch after acquiring a small Belgian firm, FilePool NV, last year for less than $50 million, Rothnie said.

After an application server captures or creates a piece of data, Centera gives it an address based on a mathematical formula calculated from the data's content. Once the data is stored it cannot be changed and duplicate information is eliminated, Rothnie explained.

EMC is not alone in going after the fixed data or archived information market, which Rothnie said could be a $3 billion to $10 billion market in the next few years.

Network Appliance Inc and IBM, for example, are using different approaches to store infrequently accessed files. Coca-Cola Co last year agreed to use IBM technology to store a century's worth of marketing and advertising icons that can be accessed by employees in 200 countries.

Rothnie said EMC will rely mostly on partners to sell Centera, which will be backed by a small sales force of specialists.

EMC turned to Dell Computer Corp last year to sell its Clariion storage device after it was neglected by EMC's own sales force. EMC sales people last year pushed the pricey Symmetrix machine when the market wanted less expensive products.