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DESKTOP EXTERNAL STORAGE
External desktop storage, including USB-connected and LAN-connected devices, remain a best-seller for solution providers, with nearly 45 percent of them selling or recommending the products, according to Everything Channel's 2009 State of Technology: Peripherals survey.
The storage capacity of the devices is the key factor for customers when choosing which model to purchase, followed by price, the solution providers said in the survey. Performance is a distant third, which reflects the fact that many, if not most, of these devices are used for secondary storage or backups.
The capacity variable also feeds into solution provider purchasing plans, as 63 percent of those surveyed expect 500-plus-GB external hard drive sales to increase in 2009, compared to 59 percent who chose LAN-connected storage devices and 53 percent who chose external hard drives of up to 500 GB in capacity.
But that is not surprising, as 64 percent of the solution providers said LAN-connected storage devices offered the highest profit opportunities in the category, followed by 500-plus-GB hard drives. Those devices also offer the best services opportunities for solution providers, although solution providers said in the survey that external desktop storage, in general, is not a great source of services business.
Also not surprising is the finding that USB flash drives, or "thumb drives," have the lowest profit potential for solution providers, especially since those devices are now often given away free-of-charge for promotional purposes.
Brian Lisse, owner of Madison Computer Works, a Madison, Wis.-based solution provider catering to small and midsize businesses, said that, for him, services is the only reason to sell external desktop storage devices.
"We don't make money selling hardware, period," Lisse said. "The real money is in setting it up and training customers, and offering support and other services."
One common service for Lisse is to get customers to move away from external hard drives for backups.
"We use USB external storage for customers for backups, but it's not so robust," he said. "If a customer has a couple of USB drives, why not get them to go with something like an Iomega Rev removable hard drive system?"
Computer Alley, an Ann Arbor, Mich.-based solution provider, gets around the poor margins of external desktop storage devices by custom-building them, said Tony Audas, director of purchasing for the company.
There are several advantages in building such devices, including the ability to offer a better warranty than name-brand vendors and making it easier to do field service on problem units, Audas said.
The shorter warranty of brand-name storage devices compared to the three-year or five-year warranty of bare drives is also why Computer Alley builds LAN-attached storage devices, Audas said.
"We like to put together a package," he said. "We lead with an Intel SS4200 chassis and add whatever drives customers want. We know that Intel will come through on the warranty."
Joseph F. Kovar and Michele Masterson also contributed to this article.
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