Channel, Competition Mixed On Impact Of IBM/NetApp OEM Deal6:52 PM EST Wed. Apr. 06, 2005
Industry reaction to IBM's deal to OEM storage products from NetApp was mixed. But it looks like the immediate winners will be partners who are currently certified to sell products from both vendors.
The move, announced Wednesday, gives IBM a branded product line that includes NAS and iSCSI SAN appliances.
Hunt Russell, sales manager at Evolving Solutions, a Hamel, Minn.-based solution provider who works with both NetApp and IBM, said the deal offers his company some immediate benefits.
"Now we can get to customers in two flavors," he said. "If it's an IBM customer, and they like the IBM logo and IBM maintenance, we will sell the IBM versions. If it's a NetApp customer, we will sell them NetApp products."
Solution providers with customers who have IBM IT infrastructures will definitely see business grow once IBM-branded appliances from NetApp become available, said Russell, mainly because the computing giant will have a true NAS offering for the first time.
"IBM needed to do this," he said. "They needed to either buy NetApp or make a deal with them. NetApp has 40 percent of the NAS market. IBM's 500G [NAS appliance] is a good product, but everyone had lost faith in IBM as a NAS supplier."
Michael Fanelli, western regional manager of SSI hubcity, a Metuchen, NJ-based NetApp partner, said the deal was significant for the storage industry. "Now NetApp has competition," he said.
However, said Fanelli, the impact on NetApp's channel is still not clear. He suspects the products will filter via IBM and its channel into the enterprise first, while most NetApp solution providers focus more on midrange accounts.
Patrick Rogers, vice president of marketing at NetApp, said that IBM's plan is to start selling its OEM versions of his company's products in stages, and that it will take time for IBM solution providers to become certified. "So right away, this limits the number of solution providers," he said.
NetApp's direct sales force and channel partners will benefit from the credibility an OEM deal with IBM gives to its products, said Rogers.
"This will boost NetApp credibility in the enterprise application market," he said. "In the NAS space, our credibility is no problem. But on the business side, that's where the IBM relation helps."
SSI's Fanelli wonders how the IBM deal can give NetApp more credibility than the company already has. "It might give them credibility in accounts they are already in," he said. "But I don't know how it helps NetApp sales people. But it does help IBM's sales."
Reaction from NetApp's and IBM's competitors was also mixed.
EMC, the target of the new relationship, shrugged off the OEM deal, with a spokesperson calling it just a simple transition from a current reseller agreement IBM Global Services already had with NetApp.
The EMC spokesperson also said that the deal is resulting in no new technology. It is just a new rout to market for NetApp with a new badge on it.
Since part of the deal also means that IBM will start selling NetApp's new V-series of storage virtualization appliances in addition to its own SAN Volume Controller virtualization line, the result will be customer confusion in regards to IBM's virtualization strategy, the spokesperson said.
Hewlett-Packard also expressed little concern about the deal. Harry Baeverstad, director of HP's NAS business, said IBM's new line will create "more competitiveness" in the industry.
Another potential beneficiary to the deal is San Diego-based BakBone Software. NetApp has a two-year agreement to OEM the company's snapshot software and sell it under the Open System Snap Vault brand name.
OSSV, which is sold with NetApp's NearStore NAS appliances, is one of the NetApp software packages that could be picked up by IBM, said Meaghan Kelly, senior manager of OEM alliances at BakBone. "It would open up a better channel for us," she said. "We also hope it's picked up by IBM Global Services."
Kelly said that IBM currently has no software that supports snapshot software on the NetApp appliances, and that it would take some time to integrate any IBM-developed capability into its line. "IBM can pick OSSV up and have an immediate competitive advantage," she said.