Hurd picks Donatelli to rebuild HP's data center business

By all accounts David Donatelli was very well liked and respected at EMC, so it was a surprise when it was announced earlier today that he was leaving EMC for HP to become the EVP of HP's Enterprise Servers, Storage and Networking business. Of course when you have ambition, as Donatelli obviously does, it's all about more taking on more responsibilities and making more money.

Its significant that Hurd went outside HP for this choice.  I'm sure that has ruffled a few feathers at HP, but sometimes the best way to rebuild an organization is to bring in an external exec.  It shows how serious Hurd is about making HP a strong player in the future of the data center business.  The fact that he hired a storage executive is an indication of the strategic role storage will have in HP's data center business. Most server companies underestimate how difficult the storage business is and many have put server or operating system people in charge of storage - usually with dismal results (yes - I'm thinking about Sun especially).  Hurd did not make THAT mistake and I guess that's partly why I think so highly of him - he either knows these things or he has terrific instincts.

Donatelli probably has the skills to do the job.  In his tenure at EMC, he has seen many internal and external challenges and there's no question he has a deep understanding of how the technology business works.  As the person running EMC's storage business, he's been exposed to every technology and business concept in the data center industry.  Of course, as the guy who will run storage at HP, he will certainly have a few insights into how to compete most effectively with his old employer.

While I think this deal is mostly about Hurd's desire to build his team at HP, it does leave a few questions about what Donatelli is leaving behind at EMC.  His storage business unit at EMC is having difficulties selling its expensive premium products and services during the ongoing worldwide recession. Their recently announced storage product, the V-Max array, continues EMC's trend to develop and sell high-priced products.   

By contrast, 3PARs most recently announced product - the F Class array - reflects the current economic reality much more closely by being a mid range array with excellent performance and scalability and having a much lower entry price than V-Max.

Comments

[the storage anarchist]

You focus on Symmetrix as if it were the only product EMC offers.

One of Dave's legacies is the fact that the storage business he ran for the past several years is not mono-dimensional.

While you'd like the world to think you have an alternative to Big Iron, fact is customer after customer is finding that CLARiiON and Celerra deliver better value. And your F Class mini-me fills but one of the numerous gaps in your product lineup.

Those of us looking from the outside duly note that your offerings hardly fill the even just the mid-tier, much less cover the entire spectrum of storage, from IOmega home/SOHO to the only real scale-out enterprise class array.

But I will give you this - you sure sound optimistic that 3PAR's results will be flawless...are you communicating optimism that your executives haven't pre-announced to shareholders yet?

[Bill]

Donatelli was a great executive for EMC in the post-Moshe era.

Who knows, maybe he'll be able to create some harmony between storage teams at HP, which could really make them a powerhouse vs. just a giant.

Score one for HP.

[marc farley]

I suppose I have been unfair to Clariion lately considering that in EMC's earnings call last week it was mentioned that Clariion sales were down 18%. I should have mentioned it sooner and not aroused suspicion of a Symmetrix fixation by limiting the discussion to Symmetrix' 25% sales decline. I made an assumption that flash SSD sales would be more closely tied to Symmetrix sales because of their relatively high price.

Otherwise, my comments regarding EMC's business performance and speculation of the impact of product pricing on EMC's business performance, as well as other's interpretations of my comments, including pricing relative to 3PAR's products and their potential impact on current and future business earnings carries SIGNIFICANT risks that investors should weigh very carefully before making any investment decisions.

To be clear, the Storage Anarchist is not an employee of 3PAR but is an industry insider with deep knowledge of the industry. The opinions he expresses here are submitted electronically and are assumed to be his own and do not represent those of 3PAR, its management or its employees.

[the storage anarchist]

Care to tell us exactly how many 3PAR systems you shipped last quarter? Or, if it's premature to be discussing 3PARs unnanncounced earnings just now, then how about the number of systems shipped for revenue in 2008?

I suspect it's a mere fraction of the CLARiiON units (and revenues, for that matter). Perhaps less than 10% even?

For reference, CLARi iON went from 5th to 1st in market share in less than 3 years...

[marc farley]

I love it when you get all pissy like this.

[John F.]

Quick question Barry,

"CLARiiON went from 5th to 1st in market share in less than 3 years..."

Is that share measured by revenue $$$ or Petabytes shipped?

Thanks

John F.

[the storage anarchist]

Marc -

I'm not "pissy"...but we both know that the answer is "3PARs units (and revenues) are insignificant as a percentage of the total market." You speak loudly, but at least you have a good shtick :-)

John F. -

Both (remember, CLARiiON had mondo-huge SATA drives before just about everyone else).

[marc farley]

Somewhere there is an online dictionary with an entry for Rat Hole with a link to this comment thread.

And in that spirit! - I'm glad you appreciate the shtick, or shticks as it may be. I appreciate your multi-personality disorder almost as much as my own.