Compaq, IBM form storage network pact

NEW YORK: Compaq Computer Corp. and IBM Corp. said Thursday they agreed to

create interoperable data storage network products and are working to develop

industry standards in a project whose value could exceed $1 billion.

Compaq, the world's No. 1 personal computer maker, and IBM, the world's top

maker of mainframe computers, said in a joint statement their collaboration will

ensure that their storage products work together, which would lead to greater

customer acceptance of open storage networking products. They said they will

also sell significant products from each other's storage portfolios.

The deal was seen as a way for both companies to go head-to-head with data

storage equipment leader EMC Corp.

Each company plans to provide equipment, software and staffing to support

each other's open storage networking customer centers. They said they will share

their knowledge with the industry to help create standards for open storage

networking such as storage area networks (SAN), and making storage networks more

flexible and easier to deploy and manage.

The growth of e-business and the increase in demand for

"anytime-anywhere" products and services has heightened the need for

storage products, the companies said.

IDC Consulting projects that worldwide revenue for disk storage systems and

storage management software will total $53 billion by 2003.

Shares of Compaq rose 1/8 to 25-1/16 and shares of IBM were off 7/8 at

103-1/8 in early trade on the New York Stock Exchange.

(C) Reuters Limited 2000.