The industry shifts from snorage to storage

“All the major storage vendors are present in the Australian market to various degrees,” says Quantum Australia & NZ country manager, Keith Busson. “The distribution market seems to reflect the general global set-up of large broad-based distributors and smaller, more specialist distributors who add value to the resellers in their effort to build solutions.”

The reseller market is similarly varied, although there has been consolidation in recent years. At the top end of town there are large broad-based systems integrators such as Dimension Data, Kaz, Leading Solutions, AlphaWest and Volante, with a plethora of niche market players at the other end.

“It seems like the ‘pure play’ storage reseller is disappearing and the storage market is consolidating through acquisitions,” said Gold. “However, there are a number of ‘storage consulting’ companies that provide expert services but don’t sell product. They provide value through expertise in areas such as disaster recovery.”

In terms of distributors, Nielsen says they form into one of two categories. There are volume distributors and there are value added distributors which manage higher end storage solutions, including blade and storage technology. This effectively provides more of a business solution to the end-user,
although the distributor doesn’t do the actual implementation.

Vendors, distributors, and resellers and integrators have all seen a lot of change in the channel, said Dimension Data’s general manager data centre solutions, Ronnie Altit. “There are more integrators playing in storage and data centre market space. But there’s also been a lot of consolidation. Telcos are moving into the space, such as with Kaz and Telstra and Optus and Alphawest, so there are fewer large integrators that are independent.”

Resellers and integrators aren’t the only part of the storage landscape to have changed. There has also been consolidation among the vendors, with takeovers such as Sun and StorageTek, and Brocade and McData. Much of this is because it’s no longer enough for storage vendors to manufacture boxes of disks or switches, etc. All the large vendors now have a much broader offering. Instead of being interested in disks, they’re focused on the software suite and the way organisations manage their environment.

Altit believes that this broadening of vendor product portfolios, coupled with commoditisation of storage technology, has fundamentally changed the relationship between vendors, distributors and resellers. “Vendors are starting to value the channel because they realise they can’t do it all. They can’t scale, because their product suite and price point is at a place now where it is more accessible to SME. But the cost of entry and the cost of sales to penetrate that market is prohibitive, so they’re turning more to the channel, and they’re turning to the distributors to manage smaller resellers.”

This view is echoed by Gold. “Most vendors see the SMB as the fastest growing market for external storage, due to the growth in storage requirements in this sector and the technology becoming more cost effective. To address this market, a vendor needs wide coverage, and the distributors who have a large network of resellers satisfy this need.”

The commoditisation of storage technology is also changing the way the channel deals with its customers, said Altit. “The longer technology exists, the cheaper it becomes, and the more accessible and simplified. Also, as it becomes more commonplace, people aren’t as scared of the risks inherent in new technology and are implementing it. And as the market becomes more educated, the service opportunities change.”

The opportunities change in two main ways, explained Altit. “While there is a greater degree of education, a lot of organisations can’t afford to all the things they want to do, particularly in the area of skills. This creates an opportunity for integrators because complex solutions need the experience of someone who has been there done that when integrating, and in such a competitive market there are always going to be niche players that target a market that the large players can’t focus on.”