Sarbanes-Oxley and disaster recovery (DR) are triggering broader infrastructure upgrades, including server and storage refreshes, according to a survey of 61 resellers, conducted by Robert. W. Baird & Co. .
Over the past week, R.W. Baird asked server and storage resellers across North America, Europe and the Pacific Rim what's driving growth and which vendors are best equipped to meet demand. The average revenue of the resellers surveyed was around $100 million.
"Resellers are finding customers cascading what they've got now into a DR site and buying additional storage for primary sites," said Dan Renouard, analyst and author of the report. "Larger enterprises are adding more DR sites and smaller companies that previously had no disaster recovery plans are steadily beginning to implement them."
Arrow Electronics Inc., in Melville, N.Y., cited compliance and e-mail archiving as a key driver of storage growth. "Compliance adds a new challenge to e-mail archiving that customers need help with," said a spokesperson for the company.
New technologies helping resellers to grow their business include VMware and storage virtualization. "Server consolidation with VMware is big, and resellers are beginning to see some interest in virtualization to help manage complexity," Renouard said.
Interestingly, both these technologies are fairly high-concept solutions, but the channel appears to have no problem selling them. In R.W. Baird's research, the firm found that resellers often have more expertise than the vendor as they are used to being hands-on.
iSCSI, a relatively simple technology that offers block-level storage connectivity over IP networks, isn't winning resellers as many deals, R.W. Baird found. "It's a classic chicken-and-egg problem, IBM and HP are not behind it, and EMC is only just getting into it and so customers are not clamoring for it," Renouard said.
The report found that 65% of respondents indicated some interest in iSCSI, but customers were mostly "just evaluating". Only 24% of respondents saw a moderate ramp of iSCSI, down from 30% in the fourth quarter, and 5% saw strong demand.
Winners and losers
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EMC Corp., Network Appliance Inc. (NetApp) and IBM are among the vendors gaining share, while Hewlett-Packard Co. (HP), Veritas Software Inc. and Sun Microsystems Inc. are losing share, according to the report. EMC has been "relatively channel unfriendly in the past," Renouard said, but it has been growing out its products to better support this area. "The lower Clariion and AX 100 systems are aimed at boosting the channel."
Overall, EMC and NetApp have a "clean channel strategy" that is easy for resellers to deal with, according to Renouard. HP, meanwhile, has been over distributed and has been trying to compete with Dell at the low end and IBM at the high end. "Not being consistent with the channel has hurt them," Renouard said.
Veritas received the most negative feedback from resellers, which R.W. Baird believes is a reflection of the company's decision to take its business direct and away from the channel.
Sun's problems run much deeper, according to the report. It is actually trying to move closer to the channel and is still getting negative feedback. "The company needs to act with some urgency in order to stem share losses in its slowly dwindling installed base," the report said.