Storage vendors are unleashing the dogs of war, using new technology, partnerships and channel initiatives to cry havoc in an intensifying scrap over domination of the enterprise data centre.
In one latest attack, IBM is using virtualisation as a decoy to recruit more partners to sell its storage solutions into SMBs. This quarter, the company is launching a Seed and Grow program aimed at multiplying SAN Volume Controller sales with an entry-level starter kit that has additional margins for partners.
IBM is turning to the channel for support, creating a US$1.5 million program to recruit some 650 resellers via its distribution partners.
In Australia, IBM is not only on a partner recruiting drive but adding online resources, research, marketing funds, test centre services, certification, training and seminars to support existing and new partners, according to Francois Vazille, Australia and New Zealand TotalStorage business unit executive at IBM.
In the past three months, IBM has taken on two tier 1 and 10 tier 2 partners and more will be signed, Vazille promises. 'Today, we do about 58 percent of our business with partners. I want to raise that to 65 percent,' he says.
'And we have the biggest portfolio of storage solutions across the board for the smallest customers to the top end.' Partner skills now encompassed SAN and other complex storage offerings, a change that in itself heated the market.
IBM's campaign resembles various usually global initiatives from the likes of EMC, HP, Symantec and Veritas Software, Hitachi Data Systems (HDS), Network Appliance (NetApp), StorageTek, Computer Associates (CA) and Sun Microsystems.
But IBM still believes it has the jump on EMC, which Vazille claims does not provide the end-to-end scope IBM offers. 'If you buy EMC, the only thing you can get in their solution is EMC,' he says. 'When a client decides to go with IBM, they can look at other solutions as well. Storage is only a part of the infrastructure.'
The Australian battlefield is looking very similar, according to David Solsky, national manager for data centre solutions at Dimension Data. Storage technology sales are growing strongly, supported by savvy strategy focusing on information life cycle management upskilling, consultancy and services through the channel.
'As vendors move down in the market, they just don't have the headcount or reach to get there directly. They have to partner.' Solsky says the past six months have seen some of the most partner-friendly vendor activity ever. He points out unit shipments are up but prices in the past 24 months have fallen by 50 to 70 percent for a typical mid-range storage setup offering a few Terabytes of data, 8- to 16-port switching and basic software.
'A lot of that has been driven by new entrants like Dell. Companies are competing very aggressively on price in the mid-market. HP has also been very aggressive on price,' Solsky says. 'For many organisations, it has been about maintaining market share.'
Partners say that, ultimately, the winners of these market share battles will be determined by the channel. The vendors can bash each other all they want but they just play into the hands of solution providers, says Mark Teter, chief technical officer of Advanced Systems Group, a US-based IBM, EMC and Sun partner.
'It gives us a chance to talk to our end-user customers about what the vendors says,' Teter says. 'It gives customers choices. Sometimes hearing about who is beating up who causes consternation with customers. There are so many partnerships and competing technologies. We're the voice of the customers.'
The real battle royale in the storage wars is between IBM and EMC. When IBM bragged about shipping its thousandth SAN Volume Controller storage virtualisation appliance, it used the occasion to blast EMC's virtualisation strategy as locking customers into EMC hardware to keep EMC's business model from collapsing.
IBM general manager Andy Monshaw also attacked its rival's relationship with Dell as proof of its lack of channel commitment. 'You can't have a channel like Dell and try to use your conventional business partners and hope for no conflict,' Monshaw says.
'Frankly, [EMC has] come out publicly and stated Dell is their preferred choice. So in a time of conflict, they will move to Dell.' EMC countered that it is the champion of open systems, with a virtualisation strategy that lets customers use their existing storage management software regardless of vendor, unlike IBM.
And despite its relationship with Dell, EMC's resellers are competing quite well, says John Koury, EMC's vice-president of channel marketing. 'It shows the power of the channel and the appetite of the channel partners that take training, provide value for their customers and provide value locally,' he says.
David Henderson, general manager of channels and alliances at EMC, says the vendor is committing to raising its level of consultancy with partners - encouraging partners to push more integrated offerings that comprise platforms, software and services as well as hardware. 'And our partners will enjoy increased rebates,' he adds.
'Three times more ... But part of it is due to integrating our last acquisition [not just hot times in storage].' Henderson freely admits the name of the game is to get resellers to sell more EMC gear, as opposed to other vendors' offerings, and preferably to lead with EMC. But the reality is that partners must sell other vendors too and EMC accepts that, he claims.
The main fight is between itself, IBM and HP, and eventually a winner will be found, like it was in 1992 when Cisco, 3Com and Bay Networks were duking it out in the networking space, he says. 'This sort of situation where you have three or four major vendors locked into a duel, it doesn't last forever,' Henderson says.
Vendors are jockeying for position now - because the next 18 months will see big changes in storage. Consolidation is on the cards, as is a final move away from storage as a silo and towards a ubiquitous information life cycle or total data management approach, Henderson continues.
He claims that will leave CA, Veritas and NetApp out in the cold. 'They all offer a point solution or part of a solution,' Henderson says. A key reason for all this intensity is flat hardware sales, leaving vendors scrambling for new weapons to control data centres.
According to research firm IDC, worldwide sales of storage hardware hit US$20.9 billion in 2004, up 3.2 percent from the US$20.2 billion sold in 2003. Storage software sales grew 16.1 percent to hit US$7.9 billion. Of the top seven hardware vendors, only EMC, Dell and NetApp saw yearly growth. Mark Lewis, executive vice-president of EMC, claims all the market growth in 2004 came from EMC. He could be right.
In the fourth quarter of 2004, EMC, the third-largest hardware vendor, saw its sales rise 13.4 percent over the previous year. Dell's storage sales, mostly EMC entry-level and mid-range products, rose 15.8 percent. The relentless onslaught has shrunk share for IBM, HP, HDS and Sun, three of which depend heavily on alliances.
HP has been depending on HDS for its enterprise-class arrays. Sun also OEMs arrays from Dot Hill and builds others using technology acquired with its 2002 purchase of Pirus. IBM has reinforced its NAS and entry-level SAN business by signing a deal to OEM NetApp's NAS and iSCSI SAN appliances from the second half of this year. IBM, StorageTek, SGI and Sun, meanwhile, depend on OEM and reseller agreements with one supplier, Engenio, for much of their array business. Sun in Australia at least has kept its strategy acutely targeted where it sees the most gains.
Dan Kieran, Australian national storage business manager at Sun, says it is still seeing 12 percent growth a year, down from 15 percent last fiscal year. Kieran says pricing pressures are tough. But Sun, of course, expects the war to be won by open, interoperable systems that allow vendor-agnostic virtualisation and infrastructure management.
'EMC doesn't have the complete stack. IBM has the stack, but they won't service different parts of it,' he says. 'And HP's business model is going down. They have multiple operating systems they're trying to support.' ISVs and other partners are crucial to winning the battle as storage technology continues to consolidate and converge, touching every part of a business. 'We're adding resources and assets to the channel and working with them to go to market,' Kieran says. Sun's channel appreciates its approach.
Ed Jeffers, national practice manager of infrastructure services at Alphawest, goes for best-of-breed vendors that treat their partners well - choosing HDS, HP, Sun and Quantum.
Some of that has been evolution, not revolution, but Alphawest sees no reason to change. 'We're taking an aggressive stance on storage and focus on a finite group,' Jeffers says. Relationships with EMC or IBM 'haven't presented themselves' but Sun and HDS have certain synergies.
However, Australian storage must be 18 months behind the US industry, he believes, so shake-ups may happen down the track. One looming driver is a move from compliance - investing in storage because you have to, to best practice - investing in storage because it makes for a better business. That has not happened here yet but it is all good, Jeffers argues. 'There'll be more different things to do, and different ways to sell it,' Jeffers says.
Resellers are feeling the pull. Dan Carson, vice-president of marketing and business development at Open Systems Solutions, a US-based storage solution provider, says his company is negotiating a minefield between EMC and StorageTek.
It gets discussed at every meeting, with one saying we should be exclusive to them or do more with them,' he says. 'There are some tempting offers that I can't discuss here.'
StorageTek and ADIC are duking it out over tape, says Carson. 'StorageTek and ADIC have tremendous animosity towards each other. They'll do anything to get business from the other,' he says. 'We go in and look at what's best for customers.' Dimension Data Australia is not keen to talk about specific vendors for precisely that reason, it seems.
Martin Aungle, a communications manager at DiData, says the integrator fears vendor repercussions if it speaks too frankly about who is winning in what areas. 'We need to be seen to be championing the vendors we represent. So what are we going to say?' Aungle says. Yet intense rivalry is being experienced between EMC and HDS, says one US reseller. 'Neither knows we sell the other,' the reseller says. 'If they did, they'd cut us. Well, they probably know. But they don't care so much as long as we close deals.'
It is the same with EMC and NetApp, the reseller says. 'We stay low. We really represent us, not the vendors. With a few exceptions, we don't wave any flags high. The vendors want us to lead their charge. But as a successful integrator, we can't do that. We have to be discreet.' The trick, the reseller says, is to make each vendor think you are working only with them. 'The only way to do it is to close a lot of deals for them. So with a large line card, we have to keep busy.
The key is, are you selling the vendor? If not, they think you are selling someone else.' Tom Raimondi, president of MTI, a US-based reseller that does about US$100 million with EMC annually and in which EMC has an equity stake, has a simple view of the storage wars.
'Whenever one company starts talking bad about another company, it's FUD [fear uncertainty doubt],' Raimondi says. 'The guy who screams louder has nothing to sell. It's a classic strategy. When you're not at the top of your game, scream the loudest.'
But back to the battle royale. Every vendor - and most resellers - is tipping major industry consolidation to come.
So in the meantime, they all want to turn up the heat. IBM is upping the ante to EMC with updated SAN File System virtualisation software that will now include support for tape systems, an important volley aimed at putting a hole in EMC's information life cycle management strategy. IBM also plans to upgrade its SAN Volume Controller twice more this year.
EMC claims IBM is overplaying its virtualisation hand and has shortcomings in heterogeneous storage environments. 'If I was in IBM's position and losing market share, I would go after the market leader, too,' says Koury. 'That is what they are doing. EMC fears no-one in this space.' EMC has introduced a new high-end NAS gateway in its Celerra line.
The company also plans to update its DMX enterprise-class arrays and unveil a mid-range version of its Centera compliance appliance. It also plans to add new integrated product suites this year and a single, unified console for all its storage software suites over the next 18 months.
On another front, shifting alliances, either through reseller or OEM deals, have become key weapons for many vendors, as seen in a new OEM deal between IBM and NetApp. Cisco Systems has also signed up to resell EMC NAS appliances. Cisco might also sign to resell entry-level SAN arrays from EMC, according to a report by RBC Capital Markets.
Those moves might benefit competitors Brocade and McData as EMC's rivals back away from Cisco. HP, meanwhile, continues to battle its rivals on multiple fronts. Mark Gonzales, vice-president of enterprise storage and server sales, says the company is enhancing its mid-range EVA array for ease-of-use in multi-vendor and multi-operating system environments.
New virtual tape appliances, iSCSI arrays and the StorageWorks Grid will roll out at HP's National Storage Conference, Gonzales adds. Since EMC's acquisition of Legato nearly two years ago, it and Veritas have become the bitterest of rivals.
That rivalry spawned an alliance between Veritas and NetApp against their common foe over the past 12 to 18 months, with several projects in the works to integrate Veritas' Net Backup software and NetApp's NAS appliances and Snaplock software, says Jeremy Burton, executive vice-president for data management at Veritas. 'We want to see less and less EMC hardware and software,' he says.
Veritas, which is being acquired by Symantec in a US$13.5 billion deal, is also making a push in the disk-based backup space with new software optimised for this area, Burton says. Once the deal is done, Symantec expects to invigorate its channel push by putting its own managers in charge of channel sales for the combined company while letting Veritas people handle direct sales, Symantec chief John Thompson says.
Archie Wilson, channel director at Veritas, agrees 'it's all happening' in storage. Email archiving is particularly hot. But 'very basic backup', he says, is still a goer mainly because so many companies, especially smaller Australian companies and even mid-market players, still have not got a coherent, workable backup and recovery strategy. 'Some of our larger enterprise partners are moving very aggressively into the mid-market,' Wilson adds.
'And we're going to see a lot more focus on the SMB. 'Creative incentives, training and certification are key to helping partners, because no-one - not even the vendors - can be expected to know all about every technology. 'Today, it's just too broad,' Wilson says.
You cannot, however, get nasty if partners are selling rival vendors. You have to be pragmatic and that is just counter-productive, he says. 'We do put our efforts behind partners who lead with our products. But if it's a CA shop, of course they're going to sell them CA,' Wilson says. Keep an eye out for NetApp, too, with its good channel relations and focus. 'They're definitely a company on the move,' Wilson says.
Chris Bennett, senior director of product management at NetApp, says NetApp is arming itself by acquiring virtual tape library software developer Alacritus and focusing R&D on storage virtualisation and information life cycle management. For instance, NetApp recently introduced its V-series appliances, which allow the virtualisation of both block and file data in a single device, and has demonstrated what it called the first-ever third-party virtualisation of EMC storage.
HDS, meanwhile, unveiled additions to its software to allow movement of block-level data across multiple storage tiers with no disruption in operation, says Jack Domme, vice-president of storage management software. By the end of 2005, that movement would be automated by customer policy, Domme says. Next is to migrate data across multiple tiers on a file-by-file basis, no mean feat when there are hundreds of TB to move, he says.
For its part, Sun has enhanced its StorEdge 6920 array with synchronous and asynchronous data replication, the creation of up to three mirrored copies of data, and the ability to connect HP and EMC storage arrays behind it into a virtual storage pool. And it is investing in a storage clustering project that uses meta-data to help search large pools of data.
CA is pushing against Veritas and EMC by integrating system management, data backup and security into a single Total Protection Suite for the SMB and enterprise space, says Jim Geronaitis, vice-president of product marketing at the company.
StorageTek, one of the first vendors to introduce a 4Gb/s Fibre Channel array, wants to double the number of US strategic reseller partners to about 40 this year and plans to offer more robust professional services offerings and certification classes, says George Karabatsos, vice-president of reseller sales and marketing.
As vendors unleash more storage products and programs, the balance has shifted. The force is with resellers - not vendors.
-1.jpg&w=100&c=1&s=0)
.png&w=100&c=1&s=0)
