Are You Ready To Sell DVD?

Like most storage VARs, Mark Buckley doesn't remember the first time he first heard about DVD (digital videodisc) technology. DVD probably drew his attention as he glanced over a "what's hot" product section in a trade magazine three years ago. With more users storing data on CDs, the promise of DVD seemed too great to ignore. While DVD is identical in appearance to CD, DVD has approximately seven times the storage capacity. DVD drives access data stored on DVDs and CDs, which makes for an easy migration path for users. "When I first read about DVD, it was going to be a two-sided media with 14 gigabytes (GB) of storage. I was excited about the possibilities," recalls Buckley, general manager at Lebenson Advanced Systems.

Three years have passed and Buckley is only now installing DVD technology. And, current DVD technology is much different than its original specifications. "The DVD technology that we sell today is a single-sided media with about 4 GB of storage," states Buckley. Even though DVD did not live up to initial hype, Buckley still believes it will supplant CD as the archival media of choice and provide his company with many new opportunities.

Lebenson Advanced Systems is headquartered in Las Vegas, but Buckley runs a 1-year-old branch office in Wheaton, IL. The company has a total of nine employees. Initially, the company specialized in network storage and networking. However, with the addition of Buckley in 1997, the company has done both document and image management and computer output to laser disk (COLD) installations. "With CD, users were restricted by how much and what types of data they could store. DVD almost eliminates those restrictions," states Buckley.

Sell DVD To Current Customers
In addition to DVD's greater storage capacity, DVD-ROM drives can also read CDs. Because of this easy migration path for current CD users, Buckley believes DVD jukeboxes will be an easy sell for VARs. "A 100-disk Pioneer DVD-ROM jukebox costs about $12,500 and a similar capacity CD-ROM jukebox is about $10,000," explains Buckley. "You would be crazy not to spend $2,500 more to get the latest technology. Unless a customer is adamant about buying a CD-ROM jukebox, I don't think I will sell another one."

One of Buckley's existing customers in the banking industry stored all of its data on a RAID (redundant array of independent disks) system and wanted to migrate some data to CD. The bank contacted Buckley to install a CD-ROM jukebox in April of 1998. Buckley convinced the client to wait until July when a DVD-ROM jukebox would be available. "I sold the bank a six-disk CD changer which allowed it to burn data on CDs until the DVD-ROM jukebox arrived," says Buckley. In July, Buckley installed a DVD-ROM jukebox at the bank and loaded the CDs on which the bank had stored data. "If the bank needed a solution immediately, I would have used a CD-ROM jukebox," adds Buckley. "But, if customers can use a ‘band-aid' solution while they are waiting for DVD technology, I would recommend they do it."

New Applications Require New Storage Technology
One obstacle facing Buckley in selling DVD technology is that CD currently provides enough storage for many customers' present applications. While this may be true right now, it will probably change in the future. "My first computer was an Apple IIe with 128 kilobytes of RAM, and I was told that I would never need that much RAM. Currently, I have 128 megabytes of RAM in my computer," states Buckley. "As storage capacities increase and become cheaper, applications will be developed which use more storage."

For example, many companies use CD technology to store documents for document imaging applications. The increased storage capacity of DVD will allow companies to store and manage more than documents. "Eventually, large companies will manage voice messages similar to documents," comments Buckley. "Voice messages are already stored digitally on phone boards. These messages could be routed from the phone boards and stored as an audio file in a user's management system."

Buckley also sees COLD (computer output to laser disk) applications affected by DVD technology. This data is stored on a company's mainframe computer. COLD software allows users to download data from the mainframe and view it at their desktop. Buckley says that many companies with mainframes have to purge COLD data after a few years due to limited storage space on a mainframe. "Clients tell me all the time that they would like to keep their mainframe data for more than three years. That mainframe data can now be converted to COLD data and stored in a DVD jukebox. This allows businesses to store their mainframe data for the next 20 to 30 years," explains Buckley.

Customers Must Understand New Technology
Pitching a new technology can sometimes be difficult for VARs. While end users may not be lining up to be the first with DVD technology, they will often follow the lead of their competition. "Companies are often more willing to spend $1 million on a proven technology, than spend $100,000 on a new technology; even though the new technology accomplishes or exceeds the same goal," states Buckley. "This is a tough mental block to break."

One way that Buckley overcomes this obstacle is by thoroughly demonstrating a new technology for decision makers of a company. He recently went through this process in selling a document imaging solution to a police department. He proposed that all of the criminal case files be scanned, and images stored in a DVD-ROM jukebox. As part of the demonstration, Buckley wanted to scan and image a dozen case files. "They wouldn't let me scan the files at my office, so I had to haul a scanner down to the record room," recalls Buckley. "I scanned the files and created an index structure and showed them how the technology works. When they saw the technology firsthand, they bought into the proposal."

With the DVD jukebox, Buckley was able to address some of the document security concerns of the police department. The storage capacity of DVD allows all of the documents to be stored on one jukebox attached to one server. The jukebox can be managed by one IT (information technology) director, as opposed to several IT staff members managing many storage devices.

Converting Customers' CDs To DVDs
While accessing data on DVD-ROM jukeboxes is a cost-effective alternative for end users, the price of recording data on a DVD remains high. The current price for Pioneer's DVD-R (recordable) drive is about $17,000. With its steep price tag, a common adopter of DVD-R technology is service bureaus. Customers buying DVD-ROM jukeboxes will likely have a service bureau convert their current library of CD-ROMs to DVD-ROMs. "A service bureau might charge $50 per disk to convert four CD-ROMs to one DVD-ROM. This cuts a user's storage requirements by 75%," states Buckley. "Until the price of DVD-R drives comes down, this type of conversion will be a big market for service bureaus."

There is no indication that DVD will not follow a typical technology curve in terms of pricing. The current DVD-R drive from Pioneer is a first generation product. The second generation of DVD-R is expected to be available in March of 1999 and the price could be as low as $5,000. "When users can afford to put DVD-R drives in a DVD jukebox, that opens up another opportunity for VARs and integrators. It also allows users to burn their own DVDs without going to a service bureau," states Buckley. "Within a year, we will be installing a lot of DVD-R drives."

Companies Can't Ignore DVD Technology
DVD technology eliminates a lot of the storage restrictions that might be encountered by a company. According to Buckley, seven 100-disk DVD-ROM jukeboxes can be placed on one server to provide a total of 3.5 terabytes of storage. If a user requires more storage space, another server and seven 100-disk DVD-ROM jukeboxes can be added, which brings the total storage capacity to seven terabytes. "My brother-in-law works for a storage manufacturer and builds 20- to 30-terabyte storage systems," says Buckley. "With DVD, PC technology is coming awfully close to matching what storage manufacturers are producing."

"Seven 100-disk DVD-ROM jukeboxes give a user 3.5 terabytes worth of storage. But, imagine the storage capacity that seven 500-disk DVD-ROM jukeboxes offer," comments Buckley. "The technology is here and it is our job to convince people of its benefits. If we do a good job, customers will be bold enough to implement new technology."