Affinity Index: Network Attached Storage

A strong storage business combined with a strong presence in the small and midsize business market have combined to give Hewlett-Packard the highest marks for brand affinity in a new Channel Affinity Index survey conducted by the Institute for Partner Education & Development (IPED). IPED is the research arm of Everything Channel, which also owns ChannelWeb.

HP has managed to be the leading SMB NAS vendor in terms of both proposals written and deals closed for customers working with solution providers, and looks to be on track to do so again in the near future.

HP's solution provider partners also gave the vendor a strong thumbs-up by giving it a much higher overall Channel Affinity Index score than other vendors.

The following slides look at the SMB NAS Affinity Index rankings in more detail.

In the small and midsize business NAS market, which is served by many "me-too" products and few really innovative products, the support and the cachet of a name-brand vendor is important to solution providers' success, IPED found.

Three factors which make up the Channel Affinity Index -- sales training sessions, cost and time to change or add vendors, and end customer brand preference -- were weighted as the most important to VARs in this product category, each garnering 11 percent of the total score.

At the opposite end, solution providers only gave access to a vendor's decision makers 2 percent of the total score, while relative profitability with a vendor only received 3 percent of the total score.

HP has a strong business in the small and midsize business market, and was able to capitalize on that strength, along with a strong market for its ProLiant servers, to get the highest score, 571 out of a maximum of 1,000, in the Channel Affinity Index, which adds up the vendors' scores for all 15 factors in the index.

That ProLiant server connection is important, as much of HP's NAS business in the SMB market comes from the company's ProLiant-based NAS appliances. That business, combined with other NAS technology, gave HP the top score, ahead of NAS specialist NetApp, storage giant EMC, and fellow system vendors Dell and IBM.

That strong channel affinity also seems to help HP do well in the field, as the company is the leading vendor in terms of deals proposed and deals closed this year.

HP's strength in both the storage market and in the market for servers, to which much of its storage is connected or networked, serves it well in the small and midsize NAS market, with its solution providers proposing more revenue in deals for NAS than did partners of its competitors.

However, HP did lag behind competitors such as IBM, NetApp, EMC and even Dell in terms of the average value of those deals.

According to the IPED, HP solution providers proposed deals that totaled 33 percent of the total SMB NAS market in the first half of 2008, with average deals worth $15,500. Server arch-rival Dell was second in terms of the value of the deals proposed but slightly ahead of HP in terms of average value per deal.

HP's solution providers were also able to close the lion's share of NAS revenue during the first half of the year as well. However, its average value of each was the lowest of the five top vendors.

Despite the small average transaction of $10,100, HP accounted for 29.5 percent of the solution provider's SMB NAS sales in the first half. Dell was second with 24.5 percent of the the total value of deals closed, according to the IPED survey.

While HP has the top score on the IPED Channel Affinity Index for the SMB NAS category, the vendor's solution providers are not resting on their laurels. Instead, the company is expected to increase its share of the value of small and midsize business NAS channel sales in the second half of 2008 to 37.8 percent, based on solution providers' expectations of planned customer deals.

HP has been a really strong partner in the small and midsize business market, said Dhruv Gulati, executive vice president of Lilien Systems, a Larkspur, Calif.-based solution provider and NAS partner of both HP and NetApp.

The fact that HP bases the majority of its NAS business on appliances built using a Windows operating system on top of its ProLiant servers is a huge plus for the vendor, Gulati said. "HP products are really aimed for the SMB space because they are built on Windows," he said.

HP also has other NAS products for small and midsize businesses, but the ProLiant-based products are the most suitable, Gulati said.

"I best like how HP has good products for delivery to the SMB," he said. "HP has a NAS head for its EVA arrays, but it's a bit clunky. But if customers need both SAN and NAS, it's a good solution."