Axe falls as Hitachi moves into storage

400 job losses at HDS as vendor shifts away from server market.

Hitachi Data Systems (HDS) is axing 400 jobs worldwide as it switches its emphasis towards the storage market and away from its faltering server business.

The company has recently been overshadowed in the S/390 market by the launch of IBM's G5 mainframe range. While the Hitachi Skyline server was previously the most powerful of the big iron boxes at 975Mips, the G5 delivers over 1,000Mips in total performance.

The G5 is based on Cmos technology, instead of the Skyline's combination of bipolar and Cmos, and has considerably lower environmental costs and a smaller footprint. Last month, IBM announced it had shipped its one-thousandth G5 system, making it one of the fastest selling and most successful shipments of any S/390 server.

John Taffinder, general manager for HDS Europe, said the company saw huge potential in the storage market: 'We've seen EMC have big success in this area.'

He denied that HDS was losing out in the mainframe server market. 'We've shipped more Mips this year than we've ever done before. The S/390 market is growing quite strongly in terms of Mips but not in terms of revenue.'

Phil Payne, director of Isham Research, commented that it made sense for HDS to switch its focus towards the storage market. 'HDS has a very good storage story at the moment with its 7700 system, which is ahead of IBM and EMC on the technology side,' he said.

HDS staff in Europe will have to wait until later this month before they find out how they will be affected, although the bulk of the job losses are expected to be in the US. HDS Europe employs 630 people, with 2,400 staff worldwide.

Last week, the manufacturer shipped the Freedom Storage 5800 subsystem, which is designed to connect to clustered Windows NT or Unix servers.

Next year, HDS will ship its Skyline 2 mainframe system in the third quarter, which is expected to have a total performance of up to 2,000Mips.