Sign Of The Times

The EMC chairman, president and CEO thinks his company can build a new billion-dollar market in the small-business space, the latest step in EMC’s relentless drive to dominate the storage industry.

EMC begins its assault this week, armed with a new product line specifically for small businesses under the EMC Insignia brand—a brand that EMC said will not be available to Dell, its biggest partner and the channel’s biggest competitor, even though Dell will be able to sell the products. The EMC Insignia product line is complemented by a new channel program called Velocity SMB, aimed at drafting an army of partners to carry the fight against such tenacious foes as IBM, Hewlett-Packard, Symantec/Veritas and CA.

While EMC is the dominant storage vendor in the enterprise and midrange space, the company is unknown to many, if not most, small businesses. But EMC can do well in that market despite the lack of brand-name recognition, said Kevin Klein, president of Three18, a small-business VAR in Santa Monica, Calif., because small businesses turn to solution providers for help with storage. “They trust us,” he said. “When we talk storage, we talk EMC. Customers ask if we use it, and we say yes.”

EMC is, however, known to users of Dantz Retrospect, a data backup and recovery application EMC acquired when it bought Dantz Development in late 2004. And it is on Dantz, its channel partners, and its co-founder and former CEO Larry Zulch that EMC is building its Velocity SMB channel program, and in the process, making itself known to the small-business market and channel.

“We can’t do [it] without you,” Tucci said, referring to the channel. “You’re going to be part of the EMC family. And you will prosper, both financially and with growth in your company, by working with us. When we enter something, we don’t do it halfway. Pretty much, we’ve been silent, testing, doing little things. Dantz has had great success. Now we’re putting it together [with EMC].”

What EMC is putting together under the EMC Insignia banner is a series of products from several acquisitions in the past few years. In addition to Retrospect, EMC Insignia includes the Storage Administrator for Exchange e-mail storage management software from Allocity, VisualSRM SMB Edition storage resource management software from Astrum Software, RepliStor SMB Edition from Legato, and eRoom collaboration software from Documentum. Completing the solution is EMC’s entry-level Clariion AX100 storage array.

Even more important than getting the right product set was setting up the Velocity SMB channel program, Zulch said, because EMC recognized from the start that small business is not a direct play. The company has made it easy for solution providers to sell its EMC Insignia-branded hardware and software, with a minimum annual requirement of $62,000 in hardware sales or $25,000 in software sales. Recruitment of new partners is a priority. “We’re not focusing on [only] a few ‘quality’ partners,” he said. “We want to be a great partner to solution providers with five to 10 people, partners who are the IT staff of SMB customers.”

Pete Peterson, vice president of product marketing systems at Clearwater, Fla.-based Tech Data, which with Ingram Micro are the initial distributors of EMC Insignia products, said his company can bring in solution providers now that in the past did not have access to EMC’s SAN product portfolio. “EMC just didn’t have the product set to address this market before,” he said.

UNTAPPED MARKET
It’s a logical next move for EMC.

EMC, together with Dell, which sources nearly all of its disk storage products from EMC, had a combined market share of more than 20 percent of the $5 billion overall storage market in the third quarter of 2005, according to research firm IDC. For external-attached storage, the combined share topped 28 percent.