HP May Be Gearing Up for Storage Push

Reports indicated Hewlett-Packard is cutting ties with solid-state storage partner Violin Memory and bringing its 3PAR acquisition to the front lines. The move, if proven true, could signal HP is looking to grow its $4 billion storage business into a significant contender against the likes of EMC and NetApp.

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Hewlett-Packard Co. earns roughly 3 percent of its revenue through the sale of enterprise storage equipment. HP’s ambitions in storage may be significantly higher as may be cutting ties with solid-state specialist Violin Memory Inc.

Reports started surfacing at the end of last week that HP is ending its reseller relationship with Violin. Since then, much of the attention has been analysis on what it means for Violin, which is preparing for its initial public offering with a potential $2 billion market valuation. The speculation is HP walking away could dampen market enthusiasm for the maker of solid-state memory arrays and components.

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Officially, neither company is saying much about the end of their relationship. HP told Bloomberg BusinessWeek and Reuters in email statements that 3PAR is the company’s strategic storage platform.

A Violin spokesperson told Channenomics that the relationship with HP “remains unchanged” and pointed to the jointly developed HP VMA storage array series as evidence of the partnership's health.

"The VMA product family (the Violin 3000 and vSHARE software) continue to be available to customers via HP as per the announced relationship. HP engineering continue to certify the VMA with additional servers, operating systems and joint selling and promotions. Proof of concepts are currently active as are additional HP certifications. Violin offers other products like the Violin 6000 through both our direct sales and our global reseller network, as well as other software and system vendors which have been announced over the past 12 months," the Violin spokesperson said.

The potential end to the partnership could signify something greater, that HP is planning to make storage parts of its multi-year turnaround plan. Currently, HP sells roughly $4 billion in storage equipment. CEO Meg Whitman has said that cloud computing, security and Big Data are the three pillars of its recovery plan. All three require storage components.

Storage has become the battle ground among the tech hardware vendors. EMC is branching out from its storage base into servers and networking. Dell made major investments in storage through its acquisitions of EqualLogic and Compellent. IBM and Oracle are major players in the storage market. And rumors persist that Cisco could consider a major storage acquisition to counter competitive moves made by EMC.

HP put its stake in the storage market with the bidding war it waged for 3PAR. In 2010, it trumped Dell’s successive bids for the storage specialist, ultimately paying $2.1 billion. Dell would go on to buy Compellent for $960 million. Many analysts thought HP overpaid for 3PAR and Dell got the better deal.

HP is already making major moves in networking appliances and software defined networks, increasing its bid to compete with Cisco Systems. Pushing integrated solutions that include storage could give it a boost. It’s a strategy already being plied by Dell, which last week released an integrated server, network switch and storage appliance.

Violin, in its own right, is a solid company with market-leading technology. It’s been recognized for having the fastest data transfer speeds between virtualized and cloud storage systems. While a sun-setting HP relationship may cast a shadow over its IPO, it probably won’t last. The company has significant relationships with Cisco and VMware.

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