Q&A: IBM Storage Chief Urges VARs To Capitalize On Complexity

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IBM's external disk storage systems grew nearly 11 percent last year, enabling it to pass Hewlett-Packard in market share for the first time in nearly a decade, according to research firm IDC.

Andrew Monshaw, general manager of IBM's Storage Systems and Technology Group, shed light on that growth and on Big Blue's take on market opportunities for the channel in an interview with Shelley Solheim of VARBusiness. Here is an excerpt.

VARBusiness: What is driving IBM's storage growth?

Monshaw: In the early '90s, through a series of missed investments and under-investments and failures in execution, we went from market share in the [80th percentile range] down to 7 percent at the end of the '90s, while EMC grew and other competitors came in and entered. But in the last five to six years, we closed those market share gaps. We're back in the game with a full suite of technologies.

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More importantly, we've moved from selling terabytes to selling solutions aimed at customer problems, which is a result of integrating the capabilities of IBM and our business partners, whether they're ISVs or resellers. The third reason is that in the last few years we've gotten really serious about SMBs. ... That is where a good portion of our share gains have come from.

VARBusiness: Have your channel storage sales reflected that growth?

Monshaw: We have grown to where over 50 percent of our business is done through the channel over the last two years, and we have seen a steady growth rate. The participation of the amount of our total business done through our business partners has grown in every geography last year, except for one-and-a-half quarters in the Americas, and that was because of an IBM problem that we have fixed.

VARBusiness: What caused the problem in the Americas?

Monshaw: We didn't listen to partners. We had a couple of issues, where we were not having enough enablement. They needed some help with product positioning, and we pulled back on training skills. But we ran boot camps to provide intense training to fix that. We had also made a few missteps on margins, which was not intentional, and we needed some help from them to understand what we were seeing. We fixed those problems in 90 days.

VARBusiness: We're hearing a lot about deduplication technologies from resellers, do you see that really taking off this year?

Monshaw: Deduplication is a very important technology coming up. The average file today is stored somewhere between 15 to 30 times in an enterprise. With the explosion of data right now, there is no question deduplication technology is important just to keep up with the storage requirements of all of this data. It's in our road map, we will be coming out with it, possibly later this year. (Editor's Note: IBM is expected to offer NetApp's deduplication technology, expected to launch this year.)

VARBusiness: What are the major services opportunities you see for storage resellers: data protection, replication-based disaster recovery, virtualization?

Monshaw: Yes, yes and yes. The opportunities for services in this space are incredible. What is really important to center on is complexity. Infrastructure data rates are growing 100 plus percent every year. ... Senior IT professionals tell me they need help making this more simple, that it's too complicated. Eighty percent of the cost of storage infrastructure is in running the storage infrastructure -- managing it, running it, making it operate -- not the cost of the hardware and software. That creates a lot of opportunity for services.

The capability to sell services [covers] everything from basic setup and install to more sophisticated areas of disaster recovery, business continuity and archiving for the long, long term, where you store data for hundreds of years or store forever and are able access it forever. Those are things companies have to wrestle with, and so there are lots of opportunity for services beyond break-fix. We also engage more now with the security lines of business than we ever did before.

VARBusiness: What is your main focus for the channel this year?

Monshaw: Our main thrust this year is training and education. Second, we're putting together more intelligent incentive stacks, so the people who distribute products will get distributor margins, and the people who deliver value get value-add margins. And the third area, which is the most important, is the solutions we're coming out with. We're going to have new Express offerings all year long. This will be storage's biggest year by far in Express offerings for SMBs.