Compaq signs up for storage market

Hardware Storage Technology gains $30 million licensing deal.

Compaq has secured a licensing and funding deal with Storage. Technology, one week after arch rival Dell added high-end storage to its range.

According to sources close to the two companies, Compaq will plough $30 million a year into the enterprise storage maker to fund development of future products to run with NT servers.

Like Dell - which signed an OEM deal for NT storage subsystems from Data General subsidiary Clariion last week - Compaq needs a credible storage offering to add weight to its aim of selling Intel/NT boxes as heavyweight enterprise servers.

Vic Mahadevan, head of the enterprise storage division at Compaq, said the deal enabled the company to compete effectively with high-end storage specialists for the first time. These will include EMC and even IBM - which also resells Storagetek products.

The first products from the funding deal are likely to appear within a year. They will be jointly sold and marketed by Compaq, but will also be available to other vendors under licensing deals, sources hinted, with revenue divided between the partners.

Among the first products will be hardware to link large servers to multiple storage units, and data management software. The former will be available by the end of this year, and the software a year later.

The software product will be called Virtual Storage, and will automatically allocate data to different forms of storage - disk, tape or optical - according to the frequency of access. Subsequent releases will sit on NT servers but handle storage attached to all types of computers.

In the short-term, Compaq has the option to resell any Storagetek drives, but has not confirmed whether it plans to do so.

The deal is a shot in the arm for Storagetek, coming on top of licensing agreements with IBM, HP and Sequent. The IBM reseller deal, worth about $500 million, was a major factor in Storagetek's recent financial turnaround.