Small and medium-sized businesses (SMBs) risk being caught without the means to manage their storage if they let themselves be lured by enterprise-class products with entry-level price points.
Nearly 45% of SMBs recently surveyed by Stamford, Conn.-based Gartner Inc. named storage as a top hardware purchase initiative in 2007. Many will buy high-end systems in an attempt to get a handle on their exploding storage demands. But experts warn that a high-end system alone, without services support, can leave some businesses with systems they can't afford to manage.
King said SMBs just don't have the resources or IT skills to manage their data storage needs.
As a result, King sees an explosion of the IT services business as more SMBs demand products that will "take the management burden off deploying all this stuff."
IBM is one of the first big-name vendors to offer enterprise-like products to medium-sized companies, sells services -- and it makes a lot of money doing it. IBM Global Services (IGS) has become the company's largest division, with more than 175,000 employees. It generates more than 40% percent of the company's revenue.
IBM Chairman Sam Palmisano, speaking this week at PartnerWorld in St. Louis, called on partners to help grow its SMB business and predicted that the midmarket would become IBM's largest customer segment within five years. Already, IBM's midmarket sales are poised to surpass its financial services business, according to reports. Providing services to that market segment could indeed throw IBM over the top in sales, experts say.
"I think what's happening is customers in the midmarket are starting to feel the same pressure that our high-end customers have been feeling for a long time," said Elaine Lack-Dompka, SMB and channel chief for storage products at IBM. "There's a huge opportunity from a partner perspective. They're really seeing customers saying, 'Help, I need help with my data management and my compliance issues.' Some of these solutions can be bundled around implementation services."
Rob Marten, an account executive at Mainline Information Systems, a Tallahassee, Fla.-based channel partner of IBM, said SMBs need help with some fundamental issues, such as protecting data, retrieving information and scheduling backups.
"When you think about the amount of data that just keeps increasing at a very rapid pace, management of it is ongoing," Marten said. "It's not just a one-time thing in service engagement.
Vendors selling storage hardware priced for SMBs do indeed have an opportunity to sell services with their channel partners, said James Browning, vice president and research director at Gartner.
"I agree that if you just take a raw NAS device or a basic SAN, resellers can go in there and wrap services around a storage infrastructure," Browning said. "But I think there's a trend occurring on the other side."
Some vendors are taking another approach by selling storage hardware that's easier to use and requires less specialized expertise from IT staff.
Browning said other vendors, such as Hewlett-Packard Co. (HP) and Network Appliance Inc., are offering SMB storage devices that are not only priced for the SMB market, but they're also designed to be easier to manage.
HP, for example, introduced in September its StorageWorks All-in-One (AiO), a storage system designed to be installed in less than 30 minutes -- or fewer than 10 clicks. The system takes an integrated, application-centric approach to storage by combining network-attached storage (NAS), an iSCSI storage area network (SAN), data protection and storage management. Through a series of configuration wizards, users are able to migrate data from a direct-attached Exchange storage server to networked storage on the AiO by following a seven-step guide.
Browning said most SMBs lack storage expertise among their IT staffs. But all of them have plenty of expertise with the applications they use.
"If you look at the capabilities in the IT staff of a smaller business, they don't have the storage skills or the security skills or the network architecture skills," Browning said. "They are more generalists, but they understand the applications."
Either approach has merit, say experts. But what businesses don't want to do is get caught up in buying a product that requires services because the product itself is just too complex to manage.
Whether a business buys into the services approach or the ease-of-use approach depends solely on what the company finds most valuable to its overall business, said Greg Schulz, founder and senior analyst of The StorageIO Group in Stillwater, Minn. Neither approach is better than the other, he insisted.
"Wrapping services around technology because it needs services to function, that's not a good thing," he said. "But wrapping services around technology because it can offload work so that the business can concentrate on its core function, that's a good thing."
Let us know what you think about the story; email: Shamus McGillicuddy, News Writer