SAN, NAS, Disaster Recovery Drive Storage Channel Sales

With the economy still in the doldrums, VARs and integrators are looking for any pockets of growth they can find. Rich Pereira, director of product marketing for Tech Data Corporation (Clearwater, FL), believes storage is one technology still experiencing growth. "We believe storage as a whole is still growing, especially in those areas where VARs play," he says. "Enterprises with 2 TB of storage capacity and greater are not likely to make investments in their infrastructure anytime soon. Large companies have excess storage capacity because of downsizing that has occurred." Don Bell, president and CEO of Bell Microproducts, Inc. (San Jose, CA), agrees. "Clearly the corporate world is not buying heavy iron," he says. "Whether you look at high-end computers or large storage systems, a tremendous hangover still exists from the excess purchasing of the 1990s."

Sell SAN, NAS, Disaster Recovery
The good news for VARs is small- to medium-sized companies continue to purchase storage equipment, and those are the companies most VARs tend to target. "The small to medium businesses are still looking for storage solutions, especially those related to protecting data," says Pereira. "September 11, 2001, generated a great deal of interest in security, disaster recovery, and disaster avoidance solutions. We continue to see growth in those areas."

Pereira notes that a couple of years ago no one really thought about disaster avoidance or disaster recovery. Now it is a primary concern for many IT administrators. "A VAR can take a tape backup product, combine it with an optical drive and storage management software, and present it to end users as a disaster recovery solution," he says. "To make sales in today's environment, VARs need to wrap their product portfolio around a solution that makes sense to the customer."

Kelly Harvey, director of product management at Ingram Micro, Inc. (Santa Ana, CA), believes NAS (network attached storage) and SANs (storage area networks) will be areas of growth for VARs as both technologies continue to gain traction in the market. "Most of the interest we have seen in storage products is coming from SAN and NAS," she says. "Both markets continue to grow, but there have been some player changes in the NAS market which have caused NAS to get a little more attention. [Tricord filed for bankruptcy, Imation entered the market, and Maxtor announced it will exit the branded NAS market.] But we are still seeing a lot of investment in the SAN market, and VARs are interested in learning and understanding the technology. VARs want to know how to make their customers more efficient in deploying that technology. Although SAN has not grown as much as we expected it to this year, we do believe it will be a future growth opportunity."

"There is a trend in the industry toward NAS and SAN," adds Bell. "We expect both technologies to grow by over 40% per year for the next few years as the direct attached market continues to decline. SAN and NAS are the only markets forecasted to grow by double digits over the next few years, so this is an ideal time for VARs to jump on board. Networked storage is definitely a growth market and one that is growing more through the channel than direct. It is the most significant opportunity we see for VARs over the next several years."

Add Other Vendor Products To The Mix
Lance Sedlak, director of marketing for the Enterprise Storage Solutions Division of Arrow Electronics, Inc. (Englewood, CA), sees another trend taking place. End user companies are demanding products from multiple vendors. "Customers are looking for comprehensive solutions, and VARs will need to work with multiple technology providers to be able to provide those solutions," he said.

Exclusive representation is becoming rare in the channel for two reasons. Customers are demanding solutions that are no longer provided by a single vendor, and VARs are coming across more customers that already have multi-vendor solutions in place. "VARs must be able to maintain and grow their levels of account control, and they can only do so by supplying the services and solutions demanded by their customers," says Sedlak. "Expertise in many storage solutions will allow VARs to be perceived as consultants of technology solutions and not just resellers of a particular vendor's hardware line."

Distributors will continue to meet the needs of VARs by offering a broad portfolio of storage solutions to meet customer needs. "Distributors are available to help resellers identify, propose, close, implement, and support a heterogeneous multivendor solution," adds Sedlak. "But VARs must consider the holistic needs of their customers and be prepared to deliver on those needs."