Who Will Buy?

In storage networking as in life, lessons can come from the most unexpected places.

When I upgraded my cellphone a few months back, the kid at Circuit City was pushing me toward the Palm Treo. (I suggested something in a more earthbound price range, without the ringtones, the designer skins for the phone -- these were bells that did not make me whistle.) Camera phones were also on offer. While still inexplicable to me, just try buying a new phone that doesn't have one.

Flash forward to yesterday, when the NPD Group reported that cellphone system operators are extremely disappointed with how customers are using these cam phones. Seems people are just taking pictures and then using their phones as glorified photo albums instead of forwarding the goods to friends, families, ex-bosses, and the like. Apparently, the average consumer doesn't perceive an image in the same way as a text message, and that means less revenue per subscriber.

My point: Most cellular subscribers (like your average IT manager) are much more interested in basic functionality. The fact that any customer, whether the product is a cellular phone or networked storage, just wants data to be available when they need it shouldn't come as a big surprise. I don't want to build my multimedia empire from an alphanumeric touchpad that my nubby little fingers can scarcely operate anyway. I'm sure as hell not going to pay a premium for the alleged privilege.

Four-gig Fibre Channel vendors, are you listening? The same goes for you purveyors of information lifecycle management (ILM) suites and other storage resource management (SRM) schemes. And let's toss in the mostly very pricey CDP packages while we're at it.Consumer or corporate users all have to choose between nice to have versus need to have. IT vendors need to pay attention. It's dangerous to get too enamored of one's many marvelous wares. The risk is that you wind up in an alternative universe -- one not peopled by your customers.

It's time to drift earthward -- especially after the crummy quarterly financials turned in by most of the big names in storage. (See Storage Financials Take a Dip.) While it's not clear how much a jaded storage buyer is to blame for those numbers, the market surely isn't being spurred on by random launches of ILM, SRM, and CDP.

On some level, the venture capital companies are tuning into the disconnect, too. By Byte and Switch's count, 11 startups got $171 million in the first four months of 2006, compared to 16 startups getting $235.5 million for the same period a year ago. (See Storage '06 Funding Down.) The continued acquisitiveness of the big storage vendors only explains part of that, in my opinion.

So what gives? Have enterprise budgets shrunk? Is the spike in energy prices already having a ripple effect? Anyone who pretends to know is highly suspect -- just like anyone who claims to know what buyers really want, need, and will buy.

Cellular carriers aren't the first to get it wrong, and they won't be the last. Let's just hope storage vendors and those in other IT sectors don't presume too large a willingness to buy.Terry Sweeney, Editor in Chief, Byte and Switch