Giving Away the Storage - Forbes.com
Forbes.com has an interesting article about a new Oracle-backed storage venture that plans to take the wind out of the sails (or the margins out of the sales) of the storage industry:
Pillar has spent four years and $140 million of Ellison's personal venture capital money developing a storage product that uses pedestrian PC hard drives and clever software to slash, by 80% in some cases, the cost of managing and maintaining large libraries of corporate data. With demand for storage capacity increasing 70% every year, Workman thinks he can make a nice business selling hardware with as little as a 40% gross margin, well below the norm.
And if this is a problem for competitors such as EMC (52% gross margin) and Network Appliance (66%), both of which are close partners in selling Oracle databases, well, says Ellison, "I have investments in a lot of areas. EMC and NetApp will continue to dovery well. They are smart companies, and they will respond to us." Pillar began selling its drives earlier this year
Submitted respectfully, as if you still were wondering whether Sun (NASD: SUNW) wasted half their cash-hoard buying Storage Technology (NYSE: STK).
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