Storage Technology Inc says it has now fixed the two major problems that caused its net profits to drop 85% in the first quarter (CI No 3,652). Earlier this month, StorageTek reported a first quarter profit of $5.8m on revenue up 6.7% to $517m, compared with a profit of $40.6m and revenue of $484.9m in the same quarter last year. It blamed production problems with its 9840 tape drives and slower than anticipated sales of its Virtual Storage Manager products for the shortfall.
Now, says the Lousiville, Colorado-based company, it has both fixed its supply problems for the tape drives and upgraded the VSM product line so that it supports a broader market and is easier for customers to install. StorageTek’s VSM product uses software to make disk storage appear to the operating system as tape drives, so that files for storage can be stacked up and moved later to the back-end during off-peak hours. VSM was introduced last year, a full year later than IBM Corp’s competing Magstar Virtual Tape Server.
But VSM 1.0 suffered from a number of major problems. First, it only worked with IBM’s MVS Open Edition, the version of the OS/390 operating system integrating Unix services, which failed to take off in the IBM world as StorageTek had expected. VSM system 2.0 now supports all releases of MVS that are Year 2000-compliant, including Fujitsu Ltd’s MSP operating system, which gives StorageTek an opening into the Japanese marketplace. Second, version 1 required complex re-installation of system software, which users were reluctant to carry out. Version 2 uses more traditional MVS installation mechanisms which are much simpler. And third, the initial version supported only the older Timbeline drives, rather than the newer 9840 drives, which are faster and offer 20 times the capacity. These are now shipping in volume, and can be used behind VSM 2.0. Other improvements to the new release include a 50% speed up in mount times.
Virtual tape can significantly reduce cartridge usage, and moves cheaper tape storage much closer to disk, operating at a sub-second level. Big batches of hundreds or thousands of tape mounts can be done in seconds per mount, rather than the more usual 30 seconds per mount. Although StorageTek followed IBM to market with virtual technology, it rejected IBM’s server-centered approach – IBM’s product uses a repackaged RS/6000 Unix server for its intelligence. StorageTek opted instead for intelligence built into the disk buffer, and its library control software is run on the host mainframe itself. Gary Francis, VP and general manager of StorageTek’s Nearline businesses, claims the result is a throughput advantage of two times and mount time advantage of four times over IBM. He also predicts that, now it has achieved volume shipments of the 9840, StorageTek will sell more 9840s in six months than IBM has sold Magstars in one and a half years. IBM has shipped 10,500 Magstars, which StorageTek says it’s now on target to ship 22,000 of the 9840 tape drive units by the end of the year.
VSM 2.0 is a free upgrade for StorageTek’s existing customers, and for new customers the price remains the same – around $392,000 for an entry-level system with 180Gb disk capacity and eight Escon channels split between the CPU and the back-end, upgradable to sixteen channels. StorageTek says it’s working on a version for Unix and NT markets, where backup problems are somewhat different, but where it might be used for tape sharing, and to help transitions between different tape formats.
Separately, StorageTek said it had renewed the contract of David Weiss, its chairman, president and CEO, for a further five years on terms that are substantially similar to the existing contract.
