IBM-Hitachi Pact Aims for the Top

IBM Corp. and Hitachi Ltd., the world's second- and third-largest data storage systems providers, unveiled an alliance on Wednesday aimed at dislodging arch-rival EMC Corp from the top spot in the lucrative business.

Hitachi, Japan's largest electronics company, also agreed to take control of IBM's loss-making hard-disk drive business through a new joint venture, which will be owned 70 percent by Hitachi and 30 percent by IBM.

On the data storage side, the two will team up to develop open systems they hope can end EMC's long-standing dominance of the sector, which is considered a promising growth area despite a lull over the last year during the IT slump.

"A lot of growth is expected, but with competition increasing, there's no point sticking with it unless you're at the top," Hitachi President Etsuhiko Shoyama told a news conference in Tokyo.

Despite the cooperative deal, however, IBM and Hitachi products will continue to compete in the marketplace, and both said they aimed to become number one after making strong gains in the market over the past year or two.

News source: Reuters - IBM-Hitachi Pact Aims for the Top

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