Storage Sales Stay Steady

The mood of solution providers involved in the storage segment is one of cautious optimism for 2009, as they noted that they were closing out 2008 on a high note and expected to see steady sales going forward. What solution providers will need to do to stay on top, however, is deliver fast ROI to customers looking to improve their storage infrastructure by implementing new technologies and services such as virtualization, thin provisioning and deduplication. Here are 10 drill-downs into the storage sector, things solution providers need watch out for--both good and bad.

1. Storage Is Still Strong

Even when business shrinks, customers collect and store data. Storage vendor product sales so far seem to be holding up despite the overall drop in IT spending caused by a noticeable decline in customer spending and in IT budgets, but next year all bets are off.

2. Midrange Sales To Bloom

Midrange storage systems sales at companies like Hewlett-Packard and EMC are rising faster than sales of vendors' large flagship arrays as customers look for ways to cut costs and vendors bring more enterprise-class features into their midrange products. And that's great news for the channel in 2009, as solution providers are much more likely to be involved in the sales of midrange storage products.

3. Offering Alternatives

When the sales of "other" storage vendors, and when those of Sun Microsystems', rise considerably faster than those of most of the established top vendors, the logical conclusion is that customers are looking for alternative storage solutions. And that should mean more opportunities for solution providers to go in and compete against the established vendor in an account.

4. Solution Providers Will Be Key

Customers need smarter ways to utilize their existing storage equipment and are depending more and more on solution providers. Most storage solution providers say their late-2008 business did well, and expect that to continue as customers cut in-house IT skills.

5. Taking A Shine To Services

Services will continue to grow as a part of storage solution providers' business. According to our 2008 State of Technology: Storage survey, managed services are already being offered by 45 percent of storage solution providers, with considerable numbers of them also offering maintenance and deployment services, trends that will continue to grow in 2009.

6. Virtualization Victory

The quickening pace of moving from physical servers to virtual servers will help customers cut capital expenses by cutting server purchases. But it will be a boon to storage solution providers, which in 2009 will use it to virtualize or improve their disaster-recovery, data replication and backup/recovery business, and to build more virtual storage appliances.

7. Huge Opportunity In Online Storage

Of the various types of services solution providers offer, helping customers store data online will be huge in 2009. Customers have been trying online storage for backup, archiving and file sharing, and are liking it. Solution providers will make online storage services, either by offering their own solutions or working with third-party service providers, an even more important part of their business in 2009.

8. Clear Skies For Cloud Computing

As the online storage-as-a-service continues to grow, what other hardware can go online? Servers? Virtualization makes it possible. Desktops? Already being done. This starts to sound a bit like cloud computing. The difference in 2009, however, is that a very real cloud computing infrastructure is being laid down, with storage vendors and solution providers taking the lead.

9. Vendors Will Consolidate

Vendors heavily into tape are being propped up by OEM contracts, while tier-two and tier-three disk vendors without a strong channel strategy or product differentiation will find it hard to rise above the crowd. This, combined with a mixed environment for hardware purchases, foretells an uptick in storage vendor closures or acquisitions in 2009.

10. ROI Reigns Supreme

Customers will delay purchases in 2009 more than ever before, and will demand immediate ROI once the contracts are signed. Solution providers that focus on storage will benefit most of all, as they can use new technologies and services like virtualization, thin provisioning, and deduplication to give customers a fast ROI on improving their storage infrastructure with little or no new hardware purchases.