Lifeline

I *heart* SMB

by dave on April 24, 2008


I Love SMB
There’s somewhat of a misconception that EMC dislikes the SMB market. While it’s true that we’ve largely ignored it, our partners in the channel (Dell, CDW, to name a few) have successfully brought our Clariion lines to the mid-level companies out there and have solved their storage needs through aggressive cost-cutting, etc. All that was well and good, but, still, there was a general sense that we were ignoring the small guys out there who had explosive growth potential for storage and revenue and who wouldn’t be able to buy in to commercial grade arrays. Enter the Clariion AX4-5 line.

In my current role, I work almost exclusively with customers who are either new to EMC or who have admired from afar our capabilities for the commercial market. They’ve perhaps been exposed to EMC through co-branding and software bundling in external hard drive technologies, smaller ASN partners that are localized by geography, or, through a channel source like CDW. Truthfully, the greatest “capture” of these customers has been through the channel and partners who have spent the time on developing relationships with their customers versus the standard “Hey, buy my product…” One of the greatest challenges then, is for EMC to step in to the ring and actually become more “friendly” or approachable with our product and personnel.

I have been critical of the Iomega acquisition in the past based on what I felt were misappropriated metrics (namely, “buying” our way into the SMB channel using stale products versus innovative new products). The Iomega name, which was once an entity noted for innovation, has diluted to nothing notable in the channel. Companies like Enhance Technology, Buffalo, etc. which continue to innovate in the SMB space have experienced great growth because they’ve continued to innovate and make their technology approachable to the masses. That being said, here’s what I see EMC doing in the SMB space.

Intel or Iomega?
It’s no secret that EMC has a special place in their heart for Intel. Our arrays (with the exception of the Symmetrix) are built around their processors, we are firmly esconced in the Win-Tel alliance with Microsoft and, well, you know the rest. We started our SMB push with rebranding Intel 4200-E units and coupled them with EMC’s Lifeline (or is it Fortress?) software. While the 4200-E is a great box, I personally viewed the “Baxter Creek” 4000-E with a little more favour since it allowed for NFS, CIFS within the same box. The 4200-E has media functions, disk protection, etc. but it is truly the software that makes the box anything special. As I’m no expert regarding the software, I’ll defer to that product team for guidance. In any case, with the Iomega acquisition, Intel will need to be relegated to a smaller portion of the EMC market to allow for Iomega to gain some traction with SMB.

Iomega brings a much needed “middle ground” that the Intel boxes cannot cover. You’re looking at budgetary allocations between $1,000.00 to the top end of around $15,000.00 based on features and pricing. Now, I don’t know exactly what they’ll be changing or re-aligning (and one has to hope they’re going to stop this ridiculous whitebox rebranding stuff they’re doing now….) but chances are we’ll see DAS and NAS offerings that will allow for SMBs to start consolidating their storage. At risk is virtualization support and integration, but honestly, most of the offerings in that market have a buy-in around $6,000.00+ (based on the product, no less), so, it could be considered part of a larger spend for that company. In any case, I’d expect EMC branded software (Lifeline?) to appear in the boxes with some level of larger integration with our Core offerings. *shrug*

Iomega or EMC Core?

In the notes above, I’ve laid out how Iomega and Intel will be at odds with each other within the same market space (very briefly). In this section, I’d like to examine potential intersection points with Iomega and EMC Core products (Clariion, Celerra).

The Clariion AX4-5 units have been positioned as near-line SMB/Commercial storage arrays. By near-line, I’m simply referring to their ability to straddle both SMB and Commercial, not necessarily their data storage/retrieval capabilities (though, to be honest, the AX4-5 is a GREAT box to have). With our partners, you can get ready-made AX4-5 units starting around $9,000.00 (minimum config, to be honest) and scale into full featured SAS/SATA powered SAN storage for (obviously) more than that. A lot of the configs that I’ve worked on have hit the sweet spot for AX4-5 entry (with typical app integration with VMWare and SQL, for example) hitting around $35,000.00 all in. That’s not a bad place to start, especially since you get enterprise grade SAS and SATA drives that we’ve tested the living stuffing out of. 😉 Same applies for the EMC Celerra NS-2x line. I’ve worked with configs that will slap high IOP fibre drives and long term storage SATA drives within the same array for around 15% more than the AX4-5s. Again, this is optimized by the environments that I’m scoping out and, in most cases, this represents the best fit for performance and capacity. How is Iomega going to fair in that world? I’m not sure.

Nothing that Iomega has put forth so far really strikes anyone with any sort of wow-factor or “I must have it NOW.” For example, the high end 450R is simple a 4 drive server that has two GigE ports on the backend. For small shops, this may be worth it, but, again, the Intel “Baxter Creek” 4000-E does the same thing for about $4,000.00 less, fully configured. Now, you can’t really compare it against an AX4-5, to be sure, but, even a single SP AX4-5 is going to start you out around $4,000.00 above the 450R with better management. Put this into a financing or leasing model and….well, you’ll make out like a bandit. Truth be told, I’m assured that new products with new innovation will be coming down the road so, I’ll reserve my final judgment for that period of time, however, the clock is ticking.

Time to innovate…

EMC has the resources and ability to create new and exciting product at a price any SMB can afford. What they cannot afford to do is miss this opportunity. They’re counting on Iomega’s reputation and channel presence more than anything to drive their business home to the millions of SMB customers out there. The problem is, reputation and presence only go so far. There has to be better products brought to the table or else, competition will undercut and drive us out. We can’t rest on our laurels as a storage entity (truth be told, EMC isn’t well known in the SMB space at all…) because SMB doesn’t care. What matters the most is that they feel protected in their growth, from a storage AND business perspective. A misplaced investment on yesterday’s technology can destroy the confidence and ability to grow of ANY business, but is particularly pertinent in SMB.

SMB drives innovation; it breathes it out with every swell of its ranks. It is the cornerstone of tomorrow’s Commercial accounts and if we screw it up with SMB now, we’re going to have a hard time taking that ill taste from their mouths at the commercial level.

cheers,

Dave

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