Storage Media 101

ut Storage o e r u g fi o t y The easy wa Media!

e g a r o St a i d e M Covers LTO, DLT/SDLT, MO

Quick Start Guide for Selling HP Storage Media

Storage Media: What Is It? • A cartridge which holds a company’s data – like a video tape you use in your VCR

• Used in conjunction with storage hardware • A cost effective way to backup & archive data • A secure way to archive data • A consumable supply with over 55 million units sold in 2004

Storage Media: Who Buys It? Companies who: • • • • • • •

Backup data Are concerned about data security Are audited periodically Have a smart disaster recovery plan Have laws regulating data storage Know disasters can happen Basically all companies in all industries of all sizes! People who: • Are responsible for purchasing • Are in IT

Storage Media: Why Sell It? Market Opportunity • Every reseller you sell to today has customers who use Storage Media • Every end customer, regardless of size, needs to backup, archive and protect data! • Data is the #1 asset of most end customers • Protecting data is a concern of every business owner • For every $1 spent on hardware, at least $1.35 is spent on media

Storage Media: Why Sell It? Sales Strategy • Media is a consumable • Media is an annuity sale! • Media follows the same sales motion as ink & toner • Resellers can sell storage media even if they do not sell hardware • Promotions & SPIF’s!

Future Trends: Information Explosion A company’s electronic information doubles every nine months. More data will be created over the next three years than in the previous 40,000 years combined. At some point in its lifecycle, most data will be copied to removable storage media. The tape storage paradigm has now evolved and must accommodate 24x7 operations with high reliability and less human intervention.

Month: 9

18

27

36

45

54

Future Trends: Yottabytes!!! A typical video store contains about 8 terabytes of video. The books in the largest library in the world, the U.S. Library of Congress, contain about 20 terabytes of text. The Internet Archive currently has about 1 petabyte of data.

1kilobyte [kB] = 1 000 (103 ) bytes 3 1 megabyte [MB] = 1 000 000 (106) bytes 1 gigabyte [GB] = 1 000 000 000 (109 ) bytes 1 terabyte [TB] = 1 000 000 000 000 (1012 ) bytes 1 petabyte [PB] = 1 000 000 000 000 000 (1015 ) bytes 1 exabyte [EB] = 1 000 000 000 000 000 000 (1018 ) bytes 1 zettabyte [ZB] = 1 000 000 000 000 000 000 000 (1021 ) bytes 1 yottabyte [YB] = 1 000 000 000 000 000 000 000 000 (1024 ) bytes

Future Trends: Industry Trends • Interoperability • SAN (Storage Area Network) deployment • Information life cycle management • Automation/Simplicity • TCO/ROI • Archiving Regulations All trends will need a foundation of tape and media!

Why HP? HP has the Largest Storage Media Portfolio in the Industry

HP: The Industry Leader Inventor of leading technologies – DDS and DAT 72 formats – LTO format – MO WORM format

• Respected authority on performance and reliability testing • Industry veteran

Market Overview: Technologies There are several technologies that make up the Storage Media market: Ex: LTO, SDLT, DDS, etc. • The primary difference in technologies is the way data is written to the tape • The secondary difference in technologies is what we call “feeds & speeds” – This means the total capacity of the tape and how fast data can be written to it

• Customers will order based on the hardware investment they have made

HP: The Industry Leader Maxell

Sony Travan DDS AIT

Fuji

DLT SDLT Imation

LTO

24% market share

HP

$0

$10

$20

$30

$40

$50

$60

Revenue (in millions)

Source: Santa Clara Consulting Group, 2004

$70

$80

$90

$100

Why HP Storage Media? #1 in Storage Media #1 in Storage Hardware – Better Together – Media quality/reliability

• HP brand name • Competitive price – Media bid for large end-user opportunities

• Partner engagement • Extreme testing above and beyond industry standards

HP Tape Drive Portfolio (Feb 05) Ultrium 960

IVE R D PER

Corporat e/ networke d backup

SU

SDLT 600 $5549

Ultrium 460 $4995

SDLT 320 Departmental/ local network

Ultrium 230

$3399

$3849

AN R $3449 MID

GE

Ultrium 215

DLT VS160 $1999

DLT VS80 Office Servers

$1699

Y

$1199

TR EN

DAT 72

DAT 40 DAT 24 $899

Workstations $699 $599

*Prices shown are US List for internal drive

Storage Media: Why They Buy It? #1 Reliability

#2 Price

300

#3 Tape Life

Number of Respondents

250 200 150 100 50 0 e on N

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pe ro te

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Source: The Yankee Group, April 2004

Storage Media: Reliability Reliability •

People with brand preferences clearly prefer HP.

•

But ... a higher percentage of people see no difference between brands.

•

A little education on HP value will make the difference

Source: The Yankee Group, April 2004

Imation 8%

Sony 15%

Maxell 9%

Fuji 6%

Hewlett-Packard 22%

Other 8%

All Tape Manufacturers are the Same 32%

Storage Media: Price Price • HP is competitively priced on all strategic technologies • HP price and reliability combination are unbeatable • HP has a Storage Media Bid Desk to provide special pricing for large deals • HP goal is to be #1 in every technology we sell

Quality: Better Together HP Drives + HP Media = The Strongest Protection You Can Buy • Internal hardware expertise and access to hardware products for additional testing & on-going quality evaluation • Other leading media brands do not manufacture hardware and must rely on relationships with hardware companies such as HP to manage quality • HP possesses valuable insight regarding media performance and characteristics due to the internal hardware design & development process

Quality: Better Together HP Drives + HP Media = The Strongest Protection You Can Buy • As a hardware company, HP has greater visibility of media performance issues for various brands in the field than media manufacturers • Committed to promoting cross-compatibility, HP media is also extensively tested in non-HP hardware environments

Quality: Highest Standards HP Commitment to Testing: • HP’s media specifications far exceed the industry standard • HP concentrates on functional performance, not just exclusively on physical properties—emulates real-world environmental conditions and usage • HP has 20 custom-built test chambers in use around the clock • 70,000 tests and 1.3 million test hours/year

Quality: Highest Standards Multiple sourcing: All tape is NOT created equal – With multiple sourcing, HP can choose the best media that is available – HP requires higher quality standards and specifications than any other manufacturer – Dedicated production lines – Media rejected by HP media is often resold to other companies for branding – Suppliers cannot use refurbished media for the HP brand

Re-labeled (Sold under competitor brand)

Value: Unplanned Server Downtime HP Storage Media is tested to extremes to protect you from unplanned server downtime Server downtime occurs an average of 9 times per year and requires 4 hours (average) of recovery time In one year that is: • 36 hours of IT time spent in data recovery • 36 hours of lost productivity for everyone using the server • 36 hours of lost accessibility for customers

Think of the costs 1 in 5 organizations will suffer a major IT disaster every 5 years

Source: Ipsos-RSL

Market Overview: WW Market Share Verbatim TDK

HP Leads The WW Market

1.4%

CQ3’04 Market = $289m

3.2%

Quantum

3.8% Travan

IBM

6.7%

Maxell

DDS AIT

9.4%

DLT

15.4%

Sony

SDLT Imation

15.8%

LTO

18.8%

Fuji HP $0

25.5% $10

$20

$30 $40 $50 Revenue ($ millions)

$60

$70

$80 Source: SCCG CQ3 ‘04

Market Size & Growth 3000

$ (in billions)

2500 Travan AIT (&MP) DDS DLT SDLT LTO

2000 1500 1000 500 0 2003

2004

2005

2006 Year

2007

2008 SCCG 2004 Annual Report

Storage Media Technology Applications LTO

Linear Tape Open: Ultrium LTO 3 available in RW and WORM. Handles up to 800 GB of capacity and writes up to 160/MB sec. Co-invented by HP.

DLT/SDLT

Digital Linear Tape/Super Digital Linear Tape: Stores up to 600 GB compressed capacity and backs up 259 GB per hour.

DAT/DDS

Digital Data Storage: HP standard for durability is double the industry standard for maximum reliability and minimal risk. Co-invented by HP

AIT

Advanced Intelligent Tape: AIT offers a fast access and low maintenance solution for AIT tape drive customers.

Travan

Rigorous testing ensures cartridge can be used and reused up to 10,000 end-to-end passes.

MO/UDO

Magneto-optical/Ultra Density Optical: The new HP UDO technology provides 33% faster file access over it’s predecessor, Magneto Optical .

Technology Applications

LTO – Linear Tape Open (AKA Ultrium LTO) LTO: For mid-range to enterprise level applications requiring fast and frequent backup. Size range include standalone drives for small servers to large scale enterprise level libraries (2-8 drives and 100 to 1,000 pieces of media in a single library). Up to 800GB in capacity on a single cartridge (Gen 3).

The New Ultrium LTO 3 is Available in RW and WORM LTO refers to the technology Application Ultrium refers to the technology format Gen 3 represents the family or generation of the product

SCCG 2004 Annual Report

Technology Applications

DLT/SDLT – Digital Linear Tape/Super Digital Linear Tape DLT/SDLT: For mid-range to enterprise level applications requiring fast and frequent backup. SDLT for higher capacity requirements—up to 320GB. Size range include standalone drives for small servers to large scale enterprise level libraries (2-8 drives and 100 to 1,000 pieces of media in a single library).

SCCG 2004 Annual Report

Technology Applications

Mid-Range AIT: For workgroups and small servers. Especially for those customers who require faster access times and higher capacities and performance. •Positives: Large breadth of product offerings in different categories at various price points. • Negatives: Niche market and technology is proprietary.

Technology Applications

Small Server and Desktop Applications DDS/DAT: For small scale applications where volume is rather static. Perfect for desktops, workstations and small servers. Current generations are: DDS-1, DDS-2, DDS-3 and DDS-4. The introduction of DAT-72 or the 5th generation of DDS, will open opportunities for upgrading existing customers within the same technology family with higher capacities.

Travan/QIC: Best for small scale back-up needs in the SMHO market. Targeted towards low end servers and laptops where volume is rather static.

Technology Applications

Archival Applications MO - Magneto Optical: For online applications where record retention and speed retrieval are key for success. Applications include: government, graphic/printing, medical and insurance records. Application sizes range from standalone drives on a desk top to large scale jukeboxes used in enterprise IT environments. UDO – Ultra Density Optical – The next generation of MO. Provides 33% faster file access than Magneto Optical.

WW Technology $ Technology Share Travan 6%

LTO 42%

DDS 10%

AIT 9%

DLT 18% SDLT 15%

Source: SCCG CQ! ‘04

En Ne terp tw ris or e ks

HP Tape Technologies Positioning

De sk to p

Si Se ngle rv er

Mu Se ltip rv le er s

• Ultrium • SDLT • SDLT • Ultrium • AIT 3 • DAT 72 • DDS-4 • DDS-3 • DDS-2 • DDS-1 • Travan

Very Large Libraries

Large Libraries

Medium Libraries

Small Libraries

Compact Libraries

Target Customers Ultrium LTO

SDLT/DLT

DDS

AIT

Linear Tape Open

Super Digital Linear Tape/ Digital Linear Tape

Digital Data Storage

Advanced Intelligent Tape

Those not yet having standardized on a Super Drive format, where the highest performance is required and looking for the advantages of an open tape

Customers who have already committed to the SDLT roadmap. Current DLT customers who want to maintain DLT technology investment.

Current DDS 3 and 4 customers who are tied to DAT technology and require low cost of ownership.

Those looking for compatibility with AIT who value a small form factor.

• For enterprise companies that require ultra fast transfer speeds and need the largest storage capacity. • Target ESL & MSL customers who have purchased Ultrium libraries. • Target customers who have purchased Ultrium tape drives and Autoloaders

• DLT is ideal for midrange to large applications requiring fast and frequent backup and retrieval. • SDLT is ideal for customers who are looking to maintain their current DLT investment and who require higher capacities.

• Best for small scale applications where volume is static. Perfect for IT professionals or purchasing managers requiring a low cost of ownership. • Target current DDS-3 and DDS-4 install base for upgrading to DAT-72

• Ideal for workgroups and small server environments. • Target current install base. • Customers who require faster access speeds, who don’t care about open standards.

Product Portfolio and Relationships Ultrium 800

60MB/sec + Ultrium 460

30MB/sec

SDLT 600

24MB/sec

Ultrium 230

12MB/sec

VS160 DLT 8000 AIT-2

6MB/sec

SDLT 160

AIT-3 SDLT 110 Ultrium 215

AIT-1 DDS-4 DAT 72 DLT VS80

50GB

100GB

150GB

200GB

400GB

Top Revenue Generating End User Segments (11/03-4/04) $ 0.00

$ 5,000.00

$ 10,000.00

$ 15,000.00

$ 20,000.00

$ 25,000.00

$ 30,000.00

Banking Hospitals/Doctors Chemicals/Pharmaceuticals Schools Business Consulting Insurance Food Products Legal Services Government Offices Industrial Manufacturing Architectural/Engineering Investment Services Data Management Automotive Manufacturing Real Estate

Banking generates more than twice as many sales as the next closest industry

International Compliance Regulations SEC 17a-4 (USA)

Canadian Electronic Evidence Act

Basel II Capital Accord

Electronic Ledger Storage Law (Japan)

HIPAA (USA)

11MEDIS-DC (Japan)

ISO

AIPA (Italy)

18501/18509

FDA 21 CRF Part 11

GDPdU & GoBS (Germany)

Sarbanes-Oxley Act (USA)

Public Records Office (UK)

NF Z 42-013 (France) Financial Services Authority (UK)

BSI PD0008 (UK)

Explosive growth in Fixed-Content Storage Market Yankee Group estimates content storage growth from

$160M to $1.6B (2002 to 2006) Industry regulators driving enterprises to establish data-retention policies 10,000 regulations in the US alone

Better Together… HP StorageWorks Hardware and HP Storage Media Benefits of Better Together

Why HP Storage Media

 Creates unlimited repeat business  Adds value to HP by selling the total storage solution  Creates a single support source  Prolongs longevity and maximizes ESL performance  Big Deal pricing for better value and differentiation  HP Storage Media is profitable to HP and YOU  Bundle opportunities available

 HP is the world wide storage media provider with 24% market share  HP exceeds industry standards for media specifications, qualification testing and ongoing quality assurance.  HP designs and tests all hardware and media together  HP conducts the most rigorous quality control programs and audits of supplier production lines.  HP rejects are resold to other companies.  HP offers the largest branded tape media portfolio in the industry today.  HP does not purchase recycled media.

Market Overview: WW Market Projections $3,000

+12%

LTO CAGR = 29% SDLT CAGR = 28% AIT CAGR = 14%

+15% +14%

$2,500

+17%

$2,000

+7%

+11%

$1,500 $1,000 $500 $0

2003

2004

2005 LTO

SDLT

2006 DLT

DDS

AIT

2007

2008

Travan

Source: SCCG 2004 Annual Report May 2003

WW Super Tape Drive Unit Forecast 800 700

Units (K)

600 500 400 300 200 100 0 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 SDLT

LTO

SAIT Source: Gartner 2004

The Importance of Reliable Storage Media People are relying on tape more than ever • Increasing compliance regulations require more stringent data-archiving practices. • Many people have experienced data loss due to unreliable media. • Reliability drives buying decisions—it’s the No. 1 purchase factor.

What is WORM Write Once Read Many – For archiving and regulatory requirement applications Why Worm Tape Magneto Optical has long been accepted as immutable medium •

Existing WORM tape solutions, e.g. from STK, IBM, AIT are now considered valid alternatives to MO

WORM tape provides the benefits of: – – – –

Low cost/GB High capacity and storage density Scalability Low capital investment costs (uses mainstream “backup” libraries) – Long archive life Ultrium LTO 3 is available in RW and WORM

HP Offers World Class Support Limited lifetime warranty on almost all storage media • Lowest return rate of all HP products • Large portfolio of drives and media • Prelabeled media available • Long-term roadmaps – Support for current as well as retired products (Travan, DDS-1, early MO) – Committed to new tape and optical technology development • Channel strength HP storage supplies = security for your customer • Competitive pricing

Sales Motion & Opportunity Sales Motion • Product specified by IT • First purchase made by IT and/or purchasing • Subsequent purchases normally made by purchasing May differ for SMB

Beyond Technologies Opportunity • Leverage existing ink/toner sales relationships • Partner with HP for special end-user pricing • Selling Advantage • PurchasEdge • HP prefers channel sales for storage media

Install Base: HP is the Leader #1 in Tape Drives

= 32%

#1 in Automation

= 26%

#1 in Media

= 24%

• Overall tape backup market is $2.45b – Tape Drives:

$1.05b

– Media:

$1.40b

• Leading the industry initiative for open, standard tape format with Ultrium LTO • Hardware, software and services for entire data protection infrastructure

NOTE: Check with your HP rep and suppliesinfo.com for the latest stats on HP storage media market share.

Why you should sell HP Unlimited Sales Opportunity – Largest install base – Increasing amounts of data – Compatibility

Good Business Partnership – Competitive pricing – Incentive programs – Higher margin dollars

Links: More Information on Storage Media www.suppliesinfo.com - Product Data/Compatibility Sheets and Sales Tools - Latest HP media products/news - Latest HP market share - Instructor Led Training (ILT)

www.hp.com/go/storagemedia - Main link from hp.com - Links to hardware products

www.purchasedge.com - Main link from suppliesinfo.com

“Storage is becoming the absolute center of IT Infrastructure; servers are becoming the peripherals.” — Carl

Howe

Forrester Research