Hitachi, Microsoft to join hands on data storage

TOKYO: Hitachi Ltd. said on Monday that it had agreed with US software giant

Microsoft Corp to jointly develop and market storage products in a bid to boost

one of its fastest-growing businesses.

The two would set up a research facility in Tokyo next week to develop

networks able to link disparate elements of a corporate database such as

inventory, personnel and procurement, and manage them as a single system. The

new system would use a Microsoft server and Hitachi's Sanrise storage products,

which recorded sales of 240 billion yen ($1.99 billion) globally last year.

Hitachi's computer division, which has shifted its focus from mainframe

computers to storage, posted 33.9 billion yen in operating profits for the

business year ended March 31, far above a target of 6.0 billion yen. It

forecasts that figure to more than double to 71 billion yen for the year to

March 2002.

In June 2000, Hitachi and Microsoft formed a comprehensive alliance and

Monday's move is part of that tie-up, said Ikuo Kimura, general manager at

Hitachi's storage area network systems solution division. Kimura said the new

business would initially target corporate clients in Japan and aim for overseas

markets later.

"Storage service providers have been good customers but we would like to

target all-round clients," he said. The global storage market, which was

worth $34 billion in 2000, is expected to grow to $39 billion this year and to

$48 billion in 2003, Kimura added.

Shares in Hitachi closed down 1.4 per cent at 1,272 yen on Monday as the

benchmark Nikkei index dropped 1.52 per cent.

(C) Reuters Limited 2001.