IBM Targets EMC With Storage Plans

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Andy Monshaw, general manager of IBM Storage, spoke with CRN Editor In Chief Michael Vizard, CRN Editor News Steven Burke and CRN Senior Editor Joseph F. Kovar about the company's bid to go after storage giant EMC, IBM's virtualization software push and other issues surrounding IBM's storage business. Below are excerpts from the interview.

CRN: Talk about the difference between IBM's partner strategy and EMC's partner strategy.

Monshaw: How do we go after EMC? First of all, just from a strategy standpoint, IBM is all about information on demand. It is not about piece parts. It is an end-to-end, information-on-demand strategy. Second, we have a strategy that is open and EMC is proprietary and closed. Our virtualizaiton technologies encompass heterogenous environments. EMC's are on EMC environments. EMC makes about 80 percent of their revenue dollars on the hardware side. They make about 65 percent of their profit inside of copy services. Now you can't unlock and open up copy services if you are EMC because the business model will collapse. This is the issue, and this is where I think going forward we have got the advantage here because we are willing to work with more vendors for our customers to keep it open and give them choice.

How do we go after EMC with the help of our business partners? First of all, EMC has clearly chosen Dell as their business partner. We have chosen the IBM business partner community as our business partner. You can't have a channel like Dell and try to use your conventional business partners and hope for no conflict in the channel. Frankly, they have come out publicly and stated that Dell is their preferred choice. So in a time of conflict, they will move to Dell. And we have seen this with lots of partners that we talk to that deal with EMC: One day they are in favor, one day they are not in favor. We have tried very hard here to be in a steady cadence of increasing the synergies with our partners and increasing our partners' margins.

CRN: Talk about the new initiatives you have regarding partner engagement.

Monshaw: We have a number of initiatives we have launched this year to further enhance the work with our business partners. The first thing is we have come out with something called SystemSeller, which is packaged offerings for the channel where there is guarantee on how much money there is for the partners. We started out doing some stuff through the xSeries channel with the 300 and 400, our low-end offerings, and we are rolling it out across a set of midrange offerings as well as some tape [products]. The second thing is we have gotten an overwhelming response here at IBM with the bid-certification [or deal-registration] process that was done with the pSeries that basically allows for more margin for us and more margin for our partners. That was very successful in the pSeries and [so] we launched it on the high-end storage [products]. The moment that a product kicks into special bid we certify the partner that will get the margin. That partner keeps and carries the margin on that box. You reduce in-the-field conflict. It allows the partner to invest some of that margin back in the business. Third, and really important to our customers, we are doing a lot more teaming around Tivoli. We have launched combined offerings with storage and Tivoli. The go-to-market makes a lot more sense. The offerings are more unified for a partner.

Probably the biggest announcement we had at PartnerWorld is the new data-retention and compliance centers around a product we call the DR550. It is our data-retention solution. What is important here is that it combines the strength and solutions expertise of our partners with our product offerings. We will be certifying applications on the DR550. We already have 11 centers and we will go to about 30 centers worldwide where people can come in and test and certify data-retention and compliance applications.

CRN: What is holding back virtualization and what is going to kick-start it in 2005?

Monshaw: IBM has been in the virtualization game for 35 years. We have been in the virtualization game a long time. It is not about virtualizing proprietary disks. That is not what this is about. This is about giving the customers a choice of what vendors they want. Let the vendors slug it out on speeds and feeds and performance and copy services characteristics and things like that. Give them the opportunity to manage the data centers they want and then bring that management up to a much higher level, which is the systems level. I think that this year is kind of the turning point for virtualization, and we really believe that virtualization will do for the storage market what Linux did to the server market.

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