Value Propositions Differentiate Fierce Rivals

Stephen DiFranco, vice president of corporate marketing at Maxtor, was on the job only two months when he attended last year's Annual Report Card event. Suffice to say, he was not pleased with what he saw.

"We did so badly," recalls DiFranco, who told Rachel Forke, Maxtor's director of channel marketing, that he expected Maxtor to win next year. "She gave me 100 reasons why that was an impractical target," he says. As it turned out this year, Maxtor tied with Seagate in the enterprise disk drive category, though they performed differently in key areas.

While Maxtor partners gave the vendor higher marks for its solution-provider program and for managing channel conflict, Seagate scored higher in product innovation.

For its part, Maxtor made a significant effort to improve support, building a partner portal that solution providers could easily search without having to call tech support. Today, 91 percent of all issues are handled online, DiFranco says. In the most recent quarter, that amounted to 550,000 queries that were answered online.

But he credits much of the improved results to the market growth of Serial ATA products, which in multiuser environments are expected to grow from 2.2 million units shipped this year to 4.8 million in 2004, Gartner says. And that's where the battle lines between Maxtor and Seagate lie. Seagate's emphasis remains on Fibre Channel. Although more expensive and difficult to implement, Fibre Channel has broad market acceptance by OEMs, including EMC and HP.

Standards-based drives give VARs a higher degree of flexibility, DiFranco insists. "The channel does much better with open-source technologies like SAS and SATA," DiFranco says.

Joe Cousins, senior director of global channels marketing at Seagate, disagrees. "We think Fibre Channel will continue to grow," he says. He attributes Seagate's success in this year's ARC to the launch last year of its engineering design center available to OEMs, solution providers and distributors.

"As our customers are thinking about building their products, they are able to essentially use our engineering team to help design them," Cousins says.

Still, reliability of disk drives is a key issue that VARs rate manufacturers on. "We haven't had a failed disk drive in nearly three years," says one Maxtor partner. Ironically, Seagate scored four points better than Maxtor in that survey category.