Network Storage Category Profile

For all the network-storage world, this year's VARBusiness Annual Report Card (ARC) survey looked to be a clash of the titans. The usual list of storage heavyweights assembled once again to square off on this year's ARC. If past years were to serve as any indication, the top score would go to one of the perennial market leaders.

But when the dust settled, the storage hardware nod went to a newcomer in the division: Network Appliance, which topped Hewlett-Packard, IBM and market leader EMC. In fact, NetApp took the top spot with a solid blend of Product Innovation, Support, Partnership and Loyalty scores, running the table in every one of those areas.

While duly proud of NetApp technology, company executives were crowing most about the high marks their partners gave them for quality of technical support, presales and postsales support, communication and their efforts to quell channel conflict.

"At NetApp, we have always focused on building long-term partner relationships based on trust and integrity," says Leonard Iventosch, vice president of Americas channel sales at the Sunnyvale, Calif.-based company. "This recognition validates the VIP Program and the resellers that have chosen NetApp as their strategic partner."

NetApp captured an overall score of 76. HP came in second with 74, followed by IBM with 70, Hitachi Data Systems with 68, EMC with 66 and Sun with 62. NetApp trounced the competition in Product Innovation with an 81, while the rest of the field ranged from 62 to 76.

And in this year's newly expanded Loyalty segment, NetApp edged out HP by 1 point, 85 to 84. IBM scored 80, while the remaining ranged from 71 to 75.

According to analyst firm Gartner, EMC leads the external controller-based storage market with 23.5 percent market share, followed by HP and IBM, which each garner about 14.5 percent. Hitachi, NetApp and Sun bring up the rear with single-digit shares each.

The numbers in fabric-attached storage are similar, with EMC on top, followed by HP and IBM.

But in a surprising revelation this year, Gartner analyst Roger Cox found that in IP-based storage, NetApp had taken the lead over EMC, with 45 percent market share vs. EMC's 22 percent. NetApp, which supplies some gear that's rebranded by IBM, also topped the NAS market, with 56 percent share to EMC's 13 percent.

One area of little surprise in this year's survey is EMC's continued lackluster performance. For a company that still owns top market share in key storage-hardware segments, EMC has done little to improve its trailing ARC position. While the other vendors have bolstered their lagging scores, EMC continues to earn Loyalty, Partnership, Support and Product Innovation scores that leave it at the back of the pack. One telling metric is the new survey item that asks partners whether a vendor deserves their loyalty. EMC managed just 58 out of 100, well off the category average of 71 and far below NetApp's top score of 79.

One partner, who spoke about EMC's uber Velocity program at the 2006 XChange conference in August, concedes that the company has had difficulty connecting with VARs.

"We had some bad experiences with EMC," says Gary Alexander, chairman and CEO of Alexander Open Systems. "They have a bad reputation for working with partners."

Only Sun Microsystems, which holds a tiny percentage of network-storage market share, fared worse than EMC across the board in this year's survey.