EMC ( EMC) is locked in a legal battle with its former storage supremo David Donatelli after the executive jumped ship to join arch-rival Hewlett-Packard ( HPQ) earlier this week. H-P announced Donatelli's appointment as vice president of its enterprise servers, storage and networking businesses Wednesday, much to the annoyance of the storage giant. The 22-year EMC veteran was one of the key figures at the Hopkinton, Mass.-based firm, most recently serving as president of the company's crucial storage division. Donatelli, who appeared on EMC's first-quarter conference call last week, is now embroiled in a "non-compete" dispute with his former employer. The 22-year EMC veteran reportedly filed a lawsuit in California earlier this week seeking to void his employee agreement. EMC responded by filing its own lawsuit in Massachusetts attempting to enforce a non-compete clause in the agreement. "Donatelli's key employee agreement with EMC contains a non-competition clause and other protections that we intend to enforce," explained an EMC spokesman, in an email to TheStreet.com. "H-P does not comment on other companies' litigation," was the terse response from Donatelli's new employer. TheStreet.com was unable to contact the man at the center of the dispute, who is due to start work for H-P on Tuesday. This is not the first time that the departure of a key executive has caused ructions in the tech sector. IBM ( IBM), for example, clashed with its Apple ( AAPL) -bound executive Mark Papermaster in a recent high-profile , legal dispute. Litigation between IBM and Papermaster was eventually resolved, although the terms of the settlement were not revealed.
The brouhaha over Donatelli's departure highlights the pressure facing companies like EMC and H-P in a tough tech spending environment. EMC's Information Infrastructure business, which encompasses storage, accounted for $2.7 billion of the company's $3.15 billion in revenue during its first quarter. H-P's Enterprise Storage and Server (ESS) division, which Donatelli will run, is also a going concern, bringing in $19.4 billion during fiscal 2008. In addition to maintaining H-P's dominance of the blade server market, Donatelli will also be responsible for the firm's key ProCurve networking business. H-P is in the midst of reforming its battle plan to compete with its long-term partner and networking giant Cisco ( CSCO), which recently entered the server market. In a direct swipe at Cisco, H-P unveiled its BladeSystem Matrix offering last week, which it's touting as a "datacenter in a box." After Cisco stepped on H-P's toes with the launch of its Unified Computing System (UCS), the Palo Alto, Calif.-based firm is also expected to ramp up its ProCurve efforts in an attempt to hit Cisco where it hurts. EMC shares rose 23 cents, or 1.85%, to $12.51 Thursday, mirroring the broader advance in tech stocks which saw the Nasdaq rise 1.83%. H-P's stock was also on the rise, gaining 34 cents, or 0.93%, to reach $36.79.