Enterprise Storage: Small World After All

Enterprise storage vendors, which in the past year or so have unveiled initiatives aimed specifically at the burgeoning small-business storage market, have succeeded in building fast-growing, satisfied channels.

Solution providers that work with the small-business storage products and programs of companies such as EMC, Network Appliance and Hewlett-Packard said they have found customers ready to embrace products from these vendors, which in the past often ignored the smallest of small businesses.

And, in what appears to be a win-win situation, solution providers that sell products from more-established small-business storage vendors said competition from the newcomers can even help push more customers their way.

This new landscape has been very good for Eryck Bredy, president of Bredy Network Management, an Andover, Mass.-based solution provider specializing in network integration and storage for small businesses.

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Small businesses have tried everything in terms of storage and have wound up with a hodgepodge of technologies on their network, Bredy said. "They've never thought about storage in a strategic way," he said. "Small-business VARs now have an opportunity to discuss this with small-business customers. We can show them how SANs can give them resilience."

Competing against the major vendors is a matter of educating small businesses about what solution providers can offer, Bredy said. "The small business knowing about EMC makes it easier for me to compete," he said. "The fact that EMC knocks on the client's door makes it easier for me to show what I can do."

Richard Brooks, on the other hand, jumped at the chance to work with EMC after the Hopkinton, Mass.-based vendor unveiled its small-business initiative.

"I wanted to ride the back of a 600-pound gorilla," said Brooks, vice president of sales at ACS Services, Easton, Mass. "It's easier to be recognized with the EMC name than with the ACS name."

The past year has seen EMC, NetApp and HP unveil storage arrays in the sub-$5,000 range along with related software and services, despite strong competition from established vendors such as Quantum, Nexsan, Adaptec, LeftHand Networks and Infortrend.

NetApp, for instance, has already signed up about 400 solution providers for its StoreVault small-business storage array, of which only 70 had previously worked with the vendor, said Sajai Krishnan, general manager and vice president of the Sunnyvale, Calif.-based company's StoreVault Business Unit. The rest were recruited through Tech Data.

"This is a game for the big boys," Krishnan said. "There are many, many small players who will do well in the market for some time. But it's hard for them to get 200 or more resellers, unless they're in retail."

Expanding into small business has helped NetApp and its partners reach into new customers, Krishnan said. "These are all customers we never had before, and never would have had because they can't afford $20,000 solutions," he said.

NEXT: EMC's small-business storage channel push

In the past year or so since EMC unveiled its Insignia small-business storage line, based on its AX150 array, Retrospect software, and small-business versions of many of its legacy applications, the vendor has signed up 1,300 new Velocity SMB solution providers through Tech Data and Ingram Micro, and even through CDW or PC Connection, said John Palmer, vice president and general manager of EMC Insignia.

"Sometimes they can get better pricing when buying through CDW or PC Connection," he said.

Such solution providers really need the support of a large manufacturer to help develop their storage business, Palmer added.

"Small-business VARs are themselves typically small," he said. "Their challenge is business development. They have a good handle on running their business, but they don't have the resources for business development, or the time to bring in new customers."

HP, unlike EMC and NetApp, has been working with small-business solution providers on a wide range of servers and storage equipment for years, and about half of its small business goes through the channel, said Harry Baeverstad, general manager for network-attached storage.

"We clearly see this as a growth opportunity for HP and will continue to invest in it," he said.

HP, Palo Alto, Calif., late last year unveiled its sub-$5,000 All-in-One storage appliance, and in February unveiled a disk-to-disk backup appliance that lists for about $2,000 with 1 Tbyte of capacity. Last week, HP enhanced its small-business offering with its HP StorageWorks MediaVault Pro, a NAS device for small-business file-sharing and online collaboration. It lists for $1,000 with 1 Tbyte of capacity, Baeverstad said.

NetApp plans to continue to enhance its StoreVault small-business array line with both higher-end and lower-end models, Krishnan said.

"We're also toying with the idea of services-in-a-box," he said. "For example, we might offer backup services which can be sold to a customer but hosted by the VAR. But we're still just thinking about it."

Just this week, NetApp signed a reseller deal with CDW for its StoreVault appliances. Krishnan said that while his company's other solution providers might not like competing with CDW, they can always beat it on pricing by registering the deal. The signing could actually help these solution providers by bringing more awareness of the StoreVault products to small businesses, Krishnan said.

"VARs will gain from awareness via CDW," he said. "We're bloodying the waters, and will attract more customers to our channel."

Palmer would not be specific about EMC's future small-business storage plans other than to say it will continue to innovate in hardware and software for storage and adjacent products including security and compliance.

"We have the products internally to handle these challenges," he said. "We're working with [the whole of] EMC to find the products and partnerships to innovate in this marketplace."