Cover Story
What’s in store?
 Thanks to the data boom, the demand for storage continues to grow. But new technologies are redefining the market
By Varun Aggarwal
There is perhaps no other technology segment which offers so many opportunities irrespective of the business model a channel partner subscribes to. Whether you are a corporate reseller, consumer-focused retailer, enterprise solutions provider or an ISV, storage offers tremendous potential.
Market research agency IDC says that the overall India external disk storage market for CY2008 recorded a growth of 21.1 percent over CY2007 in terms of factory revenue. The India Ethernet storage (iSCSI SAN) market recorded a higher-than-average year-on-year growth of 69.5 percent in CY2008, thereby increasing its share by two percentage points in the overall India external disk storage market from 5 percent in CY2007 to 7 percent in CY2008.
The main driver for storage growth has been the data boom. According to a study by IDC, with a compounded annual growth rate of almost 60 percent, data stored is projected to be nearly 1.8 zetabytes (1,800 exabytes) by 2011. It’s also estimated that over 95 percent of this data will be unstructured.
Consumers are central to the data boom. With more storage capacities in their PC drives, faster broadband download speeds, and cheaper gadgets, consumers are creating and downloading more multimedia content (such as personal albums, videos and music) than ever before. Observes Sharad Srivastava, Director, Sales (India and South Asia), Western Digital, “The digital revolution has triggered a steady consumption pattern of storage in considerable proportions for downloaded material in the homes of Indian consumers. With changing lifestyles and higher disposal incomes, the consumer electronics market in India is witnessing phenomenal growth. The availability and sophistication of digital devices such as digital cameras and digital videos have spurred the need for external hard drives in the consumer electronics market.”
The enterprise and SMB markets have also been witnessing exponential growth in data driven by automation and statutory compliance requirements. Telecom, BFSI, government, manufacturing, healthcare and media are the key verticals driving the growth of storage.
Comments an EMC spokesperson, “With the proliferation of the number of new telecom operators in every circle there are more telcos doing business in India, and they are investing in infrastructure. Meanwhile, new regulations require banks to invest in data centers and disaster recovery centers; banks are also going beyond core banking applications. All this results in data explosion.”
Prakash Krishnamoorthy, Country Manager, HP StorageWorks India, points out that “there are huge storage requirements in the digital animation sector because of their file sizes. In the healthcare sector, major investments are going into storage because of storage-intensive applications such as support applications, patient management systems, and picture archiving and communications systems. Also, more schools and universities are taking the digital route.”
Technology drivers
Fast-growing technologies like virtualization, and the deployment of data centers, are further driving storage markets. It’s well accepted that server virtualization is driving server consolidation in data centers. However, server virtualization is also de-coupling storage from servers, and creating new requirements for network attached storage. “Virtualization is driving storage requirements across the world,” notes Ganesh Mahabala, Sales Director, VMware India.
“Storage virtualization makes a number of disparate storage boxes appear as a single drive. The technology can also be used to share a large storage box, and make it appear as different boxes to applications,” explains Aman Dokania, Vice President and General Manager, HP Asia-Pacific.
Sandeep Dutta, Vice President, Enterprise Storage, IBM India and South Asia, says that “storage virtualization and consolidation bring forth the unique advantages of realizing better asset utilization along with better availability. With the level of growth we are experiencing in this region, virtualization platforms provide the much-desired flexibility to the infrastructure.”
Meanwhile, desktop virtualization is expected to drive the storage market over the next two years. “Customers deploying desktop virtualization will see all the data and applications residing in their desktops moving to a data center. This automatically means centralized network storage, and again creates opportunities for storage,” explains Jocelyn Goldfein, Vice President & General Manager, Desktop, VMware. It’s estimated that nearly a thousand organizations in India are planning to move a part or whole of their desktop fleet to data centers using desktop virtualization over the next two years.
Enterprise channels
The enterprise storage business has two sets of vendors: specialized storage players such as Hitachi Data Systems (HDS), EMC and NetApps are competing with server vendors such as IBM, HP, Dell and Sun Microsystems.
EMC has been the most visible player among specialized storage players during the past 12 months. The vendor organized its second-tier channel, went on a signing spree during most of 2008 and 2009, and signed-on close to 200 partners across the country. The company also streamlined its accreditation process, provided a greater degree of flexibility so that partners could choose which programs they wished to excel in, and stopped charging partners for the training.
A late entrant to the market, HDS has started focusing on second-tier cities and is slowly trying to sign on premier systems integrators (SIs) across the country. “We are offering storage and backup solutions starting at a price-point of Rs 2.5 lakh. Along with our national distributors, Ingram and iValue Infosystems, we are steadily expanding to smaller cities,” informs Harikrishna Prabhu, Director Channels, HDS India.
IBM and HP have been bundling storage along with their servers, and have been leveraging on the fact that most SMB customers prefer buying from a single vendor. During the past six months HP has run multiple channel connect programs across the country to attract partners to sell its storage solutions. In the first quarter of the year HP also introduced its iSCSI product line through Lefthand Networks, a company it had acquired in 2008. In addition, the vendor identified around 15 storage partners to sell its high-end NAS and SAN product line.
Dell, which is also a leading reseller for EMC, has been aggressive. The company identifies key enterprise-focused partners for specific virtualization opportunities and offers them not just on-boarding training but also more advanced guidance for enterprise products as well as end-customer events.
Explains Harmeet Malhotra, Senior Manager, Enterprise Storage Marketing, APJ, Dell India: “For larger and more complex needs, such as projects in PSUs, state governments and corporates, we work with SIs to provide complete end-to-end solutions. These partners have access to our complete portfolio of enterprise products and solutions from servers to storage to consulting. Our systems integration partners have been including and providing Dell storage for many years for large and complex customer needs. To further increase awareness about Dell’s storage portfolio, the company is planning an initiative to provide free training and certification to create Dell EqualLogic-certified SAN partners. In markets such as the US and Europe, Dell already has certified SAN partners, and considerable business is generated through them. In India we are planning to engage with more partners.”
IBM’s BP Seller Eco-link model is designed to enable co-selling and co-delivering, with business partners, highly customized solutions that include a combination of IBM’s and the business partner’s sales and technical skills. Also, using the IBM Smart Business platform, IBM India has been bundling storage along with software from ISV partners.
Sun is banking on its new OpenStorage product line which the vendor says reduces costs considerably.
SMB and consumer opportunities
While, to a large extent, the enterprise storage player addresses the SMB segment with an entry-level NAS and SAN product line, small businesses are attended to by vendors such as Seagate, Western Digital, Iomega and Netgear. Their entry-level NAS boxes start as low as Rs 16,000, and the range typically tapers off at price points of Rs 2 lakh to 3 lakh.
Iomega, now a division of EMC, is banking on the parent company’s strengths, and is trying to work with EMC partners who are strong in the SMB segment. The vendor is also wooing ISVs to sell storage as a solution to specific verticals.
“Today, every vertical, big and small, requires storage, but a typical SMB reseller does not have enough bandwidth to put together a solution. That’s why we are exploring bundling options and even partnerships that could help our NAS resellers to sell solutions,” explains Rajeev Mukul, VP, Asia-Pacific, Iomega.
Vendors feel that more and more channel partners are ready to sell storage beyond external drives. “A year back, only focused resellers and SIs were interested in selling our NAS solutions,” says Atul Jain, Country Manager, Netgear India and Saarc. “Today, the number of partners taking an interest in selling NAS boxes is increasing. Since the products are very easy to deploy, [and come] with management and backup features, we expect to see more resellers joining the fray.”
So far consumer buying was limited to external drives. However, Mehta feels that with the digital explosion in the home, home users are already buying entry-level NAS products. Iomega India is planning to take the consumer electronics channel to sell its multimedia drives and basic NAS boxes.
While many partners prefer to align with their server vendors, quite a few are choosing different vendors for storage. Because technologies are fast-changing and the choices are way too many, some partners are also increasingly taking a vendor-neutral approach to storage. “We have decided to be very customer-centric, and are negotiating with vendors on behalf of the customer by taking a consultant’s role for storage,” informs Ketan Barai, director of Kaybee Infotech, Mumbai.
Whitebox storage
While enterprise storage is dominated by vendors such as EMC, IBM, HP, HDS and NetApps, system builders are supported by building-block makers with their whitebox offerings. Intel has been working with the Intel Premier Provider channel to help it configure storage boxes that can often be pitched against products from the big names. Affirms Sandeep Aurora, Director, Sales & Marketing, Intel South Asia, “We will continue to invest to bring in more solutions for this growing market. Channels work on a BYOS—build your own storage—model. They can offer flexibility, scalability and multiple design options which can be customized as per the customer’s requirements. They portray themselves as solution specialists.”
Adds R P Harish Kumar, Connoisseur Electronics, Bengaluru, “We have had several wins in the education and enterprise market with our whitebox storage solutions. We have proved to our customers that we can offer the same reliability and quality as MNC vendors.”
Intel regularly conducts Bootcamp and Trendsetter training to enable its partners on these platforms. These trainings help the channel partners to get trained on both the hardware and application front.
Seagate also supports its partners for whitebox solutions. Rajesh Khurana, Country Manager, India & Saarc, Seagate Technology says, “We have our channel partners in the SI and enterprise partner categories, some of whom are putting together whitebox solutions. We enable our channel partners to do this by integrating Seagate drives with appropriate third-party software solutions.”
American Megatrends India (AMI), which offers both whitebox solutions and branded offerings, acknowledges the benefits of both. According to Sridharan Mani, Director and CEO, AMI, “The main advantage of the whitebox is its price compared to a branded storage solution. Whiteboxes are able to use alternative, inexpensive hardware components to cut manufacturing costs.” AMI offers StorTrends iTX software, a portable software stack that can be integrated to work with a variety of hardware, thus making it ideal for addressing whitebox storage solutions.
The data boom is providing opportunities in the storage business for just about any partner. Yet with the technology landscape changing faster than ever before, partners need to keep themselves abreast of the latest, and employ go-to-market strategies which will help them achieve faster sales cycles. |