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NetApp Targets 'Ankle-Biters' With Low-Cost iSCSI Bundles
3:12 PM EDT Wed. Jun. 20, 2007
While NetApp has offered iSCSI and other bundles in the past, they have not offered the range of applications needed by mid-tier customers, and they have not always been price-competitive, said Ravi Chalaka, senior director of marketing for SAN solutions for the company.
"The mid-tier has a need for packages with everything bundled, including disaster recovery, backup and recovery, and repositioning," Chalaka said. "A lot of competitors are starting to offer this. We have been offering it ala cart, but it's been complex for resellers. Also, our prices have been higher than the competition's."
That is changing now as NetApp moves to package much of its software stack on top of several of its current iSCSI hardware platforms at a bundled price.
It is a move that is important for NetApp. The company has the highest share of the iSCSI market, at about 24.3 percent, according to analyst firm IDC, followed by EMC with 14.6 percent. However, competitors such as EqualLogic, LeftHand, Compellent, Hewlett-Packard, and Dell are making in-roads, said Claude Steinmeyer, product marketing manager at NetApp.
The "ankle-biters," Steinmeyer called them.
It is a situation noticed by NetApp's channel partners who face those competitors daily.
Competitors like LeftHand and EqualLogic have been a pain in the side of UpTime, said Merrill Likes, president of the Edmond, Okla.-based NetApp solution provider.
"Even though NetApp has been an iSCSI leader, these guys are like gnats on a critter," Likes said. "An annoyance to us in the NetApp world. I'm not disparaging their products. But they're always popping up. We're looking to respond to them."
Those competitors often craft their story so they sound "NetAppish," Likes said. "That is, until you peel back the onion," he said. "Then they're not always the sweet Vidalia. Maybe they're just the old country variety of yellow onion suitable for stews."
Chalaka said the typical iSCSI product bundle from NetApp when purchased ala cart costs about $48,000, compared to similar bundles from competitors which start at about $35,000, including the storage controller, an expansion shelf, hard drives, and software including a volume manager, volume snapshot, and replication manager.
Now NetApp is fighting back with bundles starting at about $28,000, Chalaka said. These bundles are based on the FAS250, FAS270C, and FAS3020 iSCSI arrays, and include the controller, expansion shelf, and minimum of 2 Tbytes of capacity on the hardware side, Chalaka said.
For software, NetApp is also including at no extra charge its SnapDrive for Windows, along with five licenses to simplify storage provisioning under the Windows environment, SnapRestore for easy restoration of backed-up files, and SnapMirror for mirroring data to external sites for disaster recovery, Chalaka said. Also included is a software subscription plan which provides one year of software upgrades at no extra cost.
Some NetApp products are still options for which there is an extra charge, including CIFS protocol, SnapManager for Exchange and SQL, Single MailBox Recovery, and four-hour parts delivery. "Not all customers want all the features," Chalaka said.
The bundles represent a list price drop for NetApp of between 16 percent and 47 percent from their original prices, bringing the bundle prices to 10 percent to 20 percent below the competition, Chalaka said.
However, solution provider margins are still in the 25 percent to 30 percent range, not including additional margins from deals which are pre-registered, he said.
NetApp is also cutting the price of its StoreVault S500 all-in-one storage array for smaller businesses by about 44 percent, but replication software and SnapRestore are options.
The new bundles are available starting this month, Chalaka said.
