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Storage: Back Me Up
Vendor exclusivity in the storage market comes not from vendor pressure, but instead from loyalty incentives and from solution providers’ own desire for strong partner relationships, some solution providers say.
Incentives to be exclusive are more likely to come from the top server vendors, particularly IBM and HP, both of which also sell a full range of storage products.
Lilien Systems, a Larkspur, Calif.-based HP-exclusive solution provider, gets up to 95 percent of its storage revenue from HP-related sales and services and the only time it receives pressure to be exclusive is when HP servers are involved, said Dhruv Gulati, Lilien’s executive vice president. “HP can’t legally pressure us,” Gulati said. “However, they can offer a carrot, which is more money if we sell the larger HP portfolio, and a stick, which is a threat to pull a registered deal.”
Lilien’s sales of NetApp hardware and CommVault software do not impact its role as a trusted adviser to HP clients as far as HP is concerned, Gulati said. “We’re a trusted adviser because of our loyalty and our relationship with our customers,” he said.
Being nearly exclusive with HP can be a mixed blessing when it comes to other opportunities, Gulati said. For instance, NetApp and its customers often prefer to work with an incumbent solution provider that is more committed to the NetApp line, he said.
Dave Butler, president of Enterprise Computing Solutions, a Mission Viejo, Calif.-based HP-dedicated solution provider, said a close relationship with HP eliminates any questions about its dedication when it engages with the vendor’s field sales team.
Sometimes vendor exclusivity can be by choice, as in the case of Davenport Group, a St. Paul-based solution provider that decided on its own to hitch its star to Eden Prairie, Minn., storage vendor Compellent when that company launched in early 2004. Sonia St. Charles, CEO of Davenport, said it saw in Compellent technology that was unavailable from any other vendor. Compellent also had solid funding, and was founded by executives of another long-term vendor, Xiotech. And it was 100 percent channel, St. Charles said.
It also helped to know that Compellent planned to offer an IPO in a short time, St. Charles said. “In 2007, before they went IPO, we made a pretty heavy investment in our Web site and marketing to take advantage of the buzz from their IPO,” she said. “So when people Googled Compellent, they came to our Web site.” —Joseph F. Kovar
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