In 1992 IBM combined their Storage Products businesses comprising eleven sites in eight countries into this division.

[2] To provide additional autonomy—thereby further encouraging OEM sales—IBM established AdStar as a wholly owned subsidiary in April 1993, with outsider Ed Zschau as chairman and CEO.

[2] To some observers this appeared to be an admission by IBM that the storage subsidiary no longer provided a strategic advantage by providing proprietary devices for its mainframe products,[2] and that it was being positioned to be sold off as a part of then the IBM chairman John Akers' business strategy.

The replacement of Akers by Lou Gerstner in April 1993 changed the strategy from spinout to turnaround,[3] but the disk drive business under Zschau continued to be troubled, declining to $3 billion in 1995.

[4] Zschau left AdStar in October 1995, replaced by IBM insider Jim Vanderslice.