Report: SMBs Need SMStorage

Small and medium-sized businesses (SMBs) will spend more on storage products than large enterprises for the next several years, according to Byte and Switch Insider, this publication's paid subscription research service. But to accommodate the new users, suppliers will need to revamp their equipment and marketing strategies.

The report, "Storage for SMBs," details how the SMB SAN market is emerging as a result of falling hardware prices and the rise of technologies such as iSCSI and SATA, which allow suppliers to deliver lower-end solutions. At the same time, small companies have developed a need for heftier storage, thanks to burgeoning email and the need to comply with new document-storage regulations.

While SMBs need and want better networked storage, though, they need products that are simpler to install and maintain than higher-end devices. SMBs also want modular products they can easily add to over time. Oh, and did we add they'd like cheaper kit as well?

Given all this, vendors are challenged to rework their wares to fit the new market. At least five are doing so, and their specific products and strategies are detailed in the report: Dell Computer Corp. (Nasdaq: DELL), EMC Corp. (NYSE: EMC), Hewlett-Packard Co. (NYSE: HPQ), IBM Corp. (NYSE: IBM), and Network Appliance Inc. (Nasdaq: NTAP) are producing cheaper disk arrays that replace more costly RAID devices. Many of these products feature SATA drives, IP interfaces, and support for Windows.

Most of the new gear is aimed at supplying network-attached storage (NAS) configurations -- at least for now. While SAN gear now accounts for less than 5 percent of what's sold to SMBs, according to the report, the proportion should shift as SMBs start to push the envelope of their NAS capabilities. Switch makers Brocade Communications Systems Inc. (Nasdaq: BRCD), McData Corp. (Nasdaq: MCDTA), and QLogic Corp. (Nasdaq: QLGC) are getting a jump on the market by issuing SMB versions of their wares.Software makers also are targeting the SMB space: BakBone Software Inc. (Toronto: BKB), CommVault Systems Inc., Microsoft Corp. (Nasdaq: MSFT), Veritas Software Corp. (Nasdaq: VRTS), and Yosemite Technologies Inc. are catering to SMB needs for backup-and-restore with products that support Windows and Linux and feature licensing arrangements geared to small, server-oriented SMB groups.

Besides revamping their products, vendors also need to rethink how they sell their products to smaller companies. Since margins are low on these products compared with higher-end SAN gear, VARs and resellers are the best channels for reaching SMBs.

Often, these VARs will be local companies with which the SMB has built a relationship over a number of years, and the SMB will look to them not for just a single product, but rather for a bundle of products, i.e., a "solution." In general, VARs are still selling SMBs disk storage as server-attached RAID arrays, but the development of more sophisticated bundles, including HBAs and application-specific software for tasks such as email archiving, will be key to getting more networked storage into the SMB market.

Mary Jander, Site Editor, Byte and Switch

More information about the current Byte and Switch Insider report, "Storage for SMBs," is available here0