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Sorting out the OEM SAN switch market



Randy Kerns, Partner,

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The Evaluator Group

There have been a significant number of recent announcements for Fibre Channel switches and directors. These announcements have covered both new products and OEM arrangements. I get many questions about what is going on with the fabric infrastructure for SANs and why are the major vendors offering switches from multiple vendors. I thought it might be useful to put into perspective what the announcements mean in this area.

Currently, the majority of deployments for Fibre Channel based fabric infrastructures (SANs) are in the enterprise data center market. That market typically purchases products directly from a "name" company such as EMC, HP, HDS, IBM, StorageTek or Sun that are called OEMs (Original Equipment Manufacturers) in this context. So, it logically follows, that the majority of Fibre Channel switches and directors are sold by just a few large direct sales organizations. So why would they offer switches/directors from multiple vendors that seem to compete directly against each other?

There are several reasons but first, it must be obvious that for the switch/director vendor to be successful in the enterprise data center space (where the money is now) they have to have a sourcing agreement with these major OEMs. If not, it would be difficult selling into the enterprise data center market. There are only a few switch/director vendors that are successful in this market: Brocade, InRange, McData and QLogic. The major OEMs offer what seem to be the same products from different vendors for very important reasons:

  • Some products have stronger points than others. This allows the OEM to tailor a solution to a customer with some differentiation that might be important to them. If they don't have that characteristic to offer in the solution, the OEM may lose out in a competitive deal. These different points may be related to some performance issue, security, or specific added feature.
  • A new feature provides a "talking point" which is something to focus on for the sale. For the OEM, offering products from multiple vendors allows them to take advantage of the leapfrog progression of products. A vendor will come out with some new or advanced feature and may have an advantage for a while. Competitive vendors follow and improve on the feature and add new ones, which results in a better product for the customer. The OEM needs to be nimble in offering the product that fits the customer the best with needed capabilities. Examples of some recent advances where one vendor as set a new bar for the competition include ISL trunking, remote connectivity and security controls.
  • Pricing is one of the most obvious factors. If an OEM has the relationship to sell from multiple switch/director vendors, there is leverage to play one off against the other to get the best price. This translates to more competitive pricing for the customer. It has been assumed that over time the Fibre Channel fabric infrastructure will be driven to commodity pricing. The vendors are working against this by adding differentiating features that have additional value but the prices have continued to come down, to the customers benefit.
  • With real interoperability between switches having been achieved, there is no issue with having different offerings. Indeed, additive sales of switches/directors to expand the infrastructure will start to become popular and a customer is well served to be able to buy the best product for the money at the time of need (and not be locked into one particular vendor offering).

One thing that confuses some and confounds me is the relabeling of switches/directors by the OEM. The argument given by the OEM is that they think the customer wants this because they feel better about getting a product from that "name" vendor. I really don't think customers are that naive and they would see through the relabeling. The support is covered by the major OEM anyway, so I don't see value here. Just confusion, maybe some delay in getting the product in the salesmen hands and a misguided justification to charge more.

I expect prices to continue to decline and the major OEMs to continue to offer multiple products from different vendors. Commodity pricing may be a ways off but customers can be more aggressive in their price demands by exploring the switch/director alternatives.


This was first published in December 2002

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