HP Doubles Down On Storage

Hewlett-Packard, which has been suffering from a slump in storage sales for more than a year, is now counting on new products, new management, and a new channel program to help it regain its footing.

Long-term HP partners, however, say that while the new products look good, the company's latest channel program could be a bust.

What HP needs more than anything else right now is a long-term vision that it can clearly and consistently execute on, said Rich Baldwin, president and CEO of Nth Generation Computing, a San Diego-based solution provider and one of HP's biggest storage partners.

"Remember back five years or so ago they had ENSA?" asked Baldwin, referring to the Enterprise Network Storage Architecture. "It was a clearly articulated, five-year vision. They don't have that now. They've been dealing with point products. But the long-term strategy, road map, vision, is not there."

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HP's total storage revenue grew an anemic 1 percent from the second quarter of 2006 to the second quarter of 2007, compared with 8 percent from the second quarter of 2005 to the second quarter of 2006.

HP was the second largest storage vendor in 2006, with total disk storage revenue of about $5 billion, according to research firm IDC. However, that represented growth of only 2.7 percent over 2005, the slowest of the top five vendors and well behind overall industry growth of 6.0 percent, IDC said.

The situation was even more dire in terms of external disk storage systems, which does not include server-attached drives. IDC said HP revenue in this market grew only 0.9 percent from 2005 to 2006, lower than the other major vendors and far off the 8.0 percent overall industry growth.

Against this backdrop, HP decided to break with tradition and bring in an outsider to head its storage business. That outsider, Dave Roberson, former president and CEO of Hitachi Data Systems, on May 30 took over as senior vice president and general manager of HP's enterprise storage business. The two companies have a long-standing relationship in the storage space, as HP OEMs its flagship XP family of storage arrays from HDS.

"Thank God," said Nth Generation's Baldwin of the Roberson hiring. "This is exactly what HP needed: recognized leadership from the outside."

Next: EVA 4100

But in June, HP was blasted for its new Fast-Track program aimed at helping its ProLiant server VARs to start selling its EVA 4100 enterprise storage array. Under the program, HP is identifying ProLiant solution providers whose clients need a more high-end solution than HP's MSA midrange and entry-level storage line. At the end of a six-month trial period, those partners are expected to go through the certification process in order to continue with the EVA. Several EVA solution providers familiar with the program told CRN off the record that the program rewards VARs that take on the EVA line without going through the investment in training and certification they experienced.

"HP is desperate," said one solution provider. "The program aims to recruit non-HP storage partners, or low-end storage partners, for its enterprise storage. They basically watch a 45-minute video, and they can then get certified within six months."

Another solution provider called the HP move a "kick in the teeth."

"We invested hundreds of thousands of dollars in training and sales teams," the solution provider said. "These new partners don't have to go through all that. They don't even know how to spell 'EVA.' They're getting deal registration, back-end rebates, the benefits I get without all the training we've gone through."

Ken Fletcher, owner of Quarterhorse, a New York-based HP ProLiant and MSA solution provider that entered the EVA Fast-Track program, said HP needs to target the storage space between the MSA and the EVA.

The EVA 4100 is a good play for customers with multiple servers or blade servers that have reached the limits of the MSA storage, but are still too small for many larger EVA solution providers, Fletcher said. "It's not an area they pay a rep to focus on," he said. "The entry-level EVA maybe costs $45,000 to $50,000, or only 25 percent more than the MSA. This allows HP to have a much better shot at this business."

However, even Fletcher acknowledged that the training he received was not adequate. For instance, he said the video centered on the EVA 4000, which one month later was upgraded to the EVA 4100. And it included competitive information that was less than up-to-date, he said.

Tom LaRocca, vice president of partner development programs in HP's Solutions Partner Organization, said that HP really wants storage growth in the ProLiant market and so is providing several of its ProLiant partners with training and storage technicians to help them.

"They just bring us the account," he said. "If there is no other partner in the account, we will help them sell it. Then, at the end of the six months, if they qualify for EVA, we will give them training and certification."

The goal of the program is about growth, LaRocca said. "We're trying to provide expertise and bring in new resellers," he said. "We're trying to provide opportunities for them to get involved in enterprise sales, and move them up the food chain."

Next: NAS Technology

One area both HP and its solution providers agree on is improving is the vendor's storage technology. HP has been making serious investments here, including the acquisition of midrange and enterprise NAS technology developer PolyServe early this year, said Ash Ashutosh, vice president and chief technologist for the HP StorageWorks division.

The company this year rolled out an entry-level virtual tape library line solution providers can take to smaller business customers, and by year-end expects to introduce new technology to do bare metal restore for rack-mounted servers, Ashutosh said.

Last month, HP introduced new versions of its EVA family, the models 4100, 6100 and 8100, which are architecturally the same as its previous 4000, 6000 and 8000 models, but which tout new high-availability and other advanced features and increased performance.

The arrays now come with a new cross-through internal switch that allows point-to-point connection between the controllers and the hard drives, giving the EVAs five nines (99.999 percent) uptime, said Patrick Eitenbichler, director of marketing for HP StorageWorks.

Nth Generation's Baldwin said that the five nines claim is a huge benefit. "HP has the historical data to claim five nines," he said. "A lot of vendors claim five nines, but they don't have the numbers to back it up. If HP says five nines, they'll do it."

Also new is virtual snapshots. Like traditional data snapshots, virtual snapshots produce a copy of the specified data that can be used in archiving and testing, said Eitenbichler. However, the capacity of such a snapshot is smaller than that of the original volume.

In addition, the company is helping cut power requirements with the new Ultrium 448 Tape Blade, a half-height tape storage that fits inside its BladeSystem c-Class enclosures. And it is improving the security of data by introducing new LTO-4 tape drives with native AES 256-bit encryption. The HP Secure Advantage portfolio, meanwhile, offers an identity-driven audit trail for policy monitoring and enforcement.

It all adds up to a resurgent HP that will bounce back from any problems it had, said Carl Wolfston, director of Headlands Associates, a Pleasanton, Calif.-based solution provider.

"They admitted they screwed up, so that's good," Wolfston said. "From a storage point of view, they're doing a pretty good job. They're hitting all the cylinders again. I'd have to give them a B+ or an A- now, compared to a B- or C+ last year, because they didn't seem to know what to do with PolyServe, and they showed an EVA road map of only one generation, compared to the five-year road map they're showing now."