Storage VARs Profit, Even As Vendors Struggle

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The economy is down, IT spending is uncertain, and businesses are looking for efficiency from every IT dollar they spend.

Yet those companies -- profitable or not -- continue to collect, store, and archive data.

In contrast to the gloom and doom of much of the IT world, storage solution providers say that all indications point to a good if not great 2009, even as the vendors they represent are struggling with job cuts and slumping financial results.


Quick Clicks: Software A Bright Spot In A Down Storage Market

The major divider between optimism and pessimism in the storage market for now seems to be whether a company focuses on hardware or software and services.

Bolstered by software-based offerings such as deduplication and storage virtualization, some storage VARs are finding ways to help customers do more with less, while still making sales in the process.

"If you are just selling hardware, no matter what it is, you tend to be commoditized," said Mike Adams, storage practice leader at Lighthouse Computer Services, a Lincoln, RI-based solution provider. "But if you add services and software, you get solutions, and you are seeing growth in your storage business."

Solution providers having the most success are those combining storage with virtualization. "The prospects and pipeline this year look great for both storage and for virtualization," said Vic Verola, vice president of sales for Vicom Computer Services, a Farmingdale, N.Y.-based solution provider and long-time IBM partner. "I'm not sure I can say as much for our other practices."

"We are helping customers get more efficiencies out of their computing and storage infrastructures," he said. "We're helping them do more with less. That is what's bringing customers to Vicom."

Verola said 2008 was a banner year for storage for Vicom, and expectations are the same for 2009. For Vicom, the key has been to combine server virtualization and storage into solutions, something that Verola said not a lot of solution providers have been able to do. "Those that do are hitting the ball out of the park," he said. "Those who aren't, they don't know what they're missing."

Another solution provider that has success with the storage/virtualization combo platter is The I.T. Pros. George Vahle, vice president of the San Diego-based solution provider, said his company is meeting all its sales goals and looking forward to a strong first quarter by building initiatives around storage and virtualization, especially for disaster recovery and business continuity solutions that tie storage in multiple locations together.

"If you sell a primary storage array at one node today, six months or 18 months later, when the customer gets the budget for disaster recovery, what array are they going to buy?" Vahle said. "They don't want to change."

The I.T. Pros has also done well with storage hardware. One reason? Manufacturers are getting aggressive on their pricing, and customers know it, said Vahle.

Now is a good time to work with manufacturers and be frank about customer requirements and budgets, Vahle said. "All the manufacturers are willing to be very aggressive on new business," he said. "They realize that if they can get real estate in an account, the customer will buy follow-on support and software."


NEXT: Storage Hardware Road Proves Rockier

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