Allow for Shrinkage

There's nothing new about storage suppliers' infatuation with small to medium-sized businesses (SMBs), as a glance at this publication's archives will attest. See: IBM Targets SMBs, EMC Darts Into Midtier NA$, Tech Data Bundles SANs for SMB, and Iomega Ships NAS Boxes for SMBs.

All those law firms, dental offices, stores, real estate shops... all so solvent, so in need of data management, and so challenged when it comes to storage. Can you say "low-hanging fruit"?

So it's no surprise to see a host of big storage suppliers once again serenading SMBs, particularly given the latest dip in enterprise spending. This week alone, we've seen announcements about SMB storage gear from Adaptec, Dell, Network Appliance (and, by association, IBM).

At the same time, enterprise players like HDS are joining the fray with their own tale of shrinkage to tell. In HDS's case, though, the reduction in bulk and pricing can't make the behemoth Universal Storage Platform into an SMB favorite. Instead, the vendor's opting to sell to the "midrange" audience.

There are a few things going on here. First, storage vendors are always looking for greener pastures, and, as noted, the enterprise end of the field isn't yielding right now.The SMB space has lots to recommend it. It's volume-based, and products are cheaper and simpler. What storage vendor, eager for fresh prospects, isn't ready for a renewed assault on easy-to-sell small companies?

In reality, SMBs face problems when it comes to buying storage. They often don't have the expertise on board to help them determine what to buy or how to run it. And given the growth in data that must be stored, that's a big problem.

Just how big is the question. When announcing his product this week, Michael Dell, CEO of Dell, made the SMB cause his soapbox. "Growing businesses are quickly reaching a breaking point in their ability to store and manage all this data being created," he said in a prepared statement. "Historically, the industry has presented SMBs with two options for storage: either buy a rudimentary storage solution that lacks capacity and basic software or buy a de-featured’ product originally designed for large businesses. So it either doesn’t do enough, or it costs too much. We will change that.”

But Dell's preaching to the choir. It's been nearly six years since IBM first proclaimed its intention to support SMBs in storage. A number of players have made the same pitch since then. In addition, iSCSI, the technology behind Dell's new MD300i, has been touted for years as an SMB-friendly option. And iSCSI external-disk products grew by over 50 percent year-on-year in the second quarter 2007, according to IDC.

At least one analyst at that research firm thinks SMB demand just hasn't been as strong as vendors would like up to now. "I believe that today's SMBs, in general, have plenty of options for storage," writes Brad Nisbet of IDC in an email to Byte and Switch today. "For many SMBs, the pain point has not been great enough to consider moving from DAS... to networked storage."So while one could say SMBs are underserved from an external storage perspective, Nisbet maintains that they are not underserved with storage options in general.

We can conclude that storage vendors have a lot to offer SMBs, and they're eager to offer more. At the same time, while there is a need to hone the storage wares on the market to better fit small companies, it's not a given that SMBs are being neglected. And it remains to be seen whether they'll start taking up SAN solutions more aggressively in the near term.

What do you think? Is the greater shrinkage factor among storage suppliers a result of marketing hype or epiphany – or a combination of both? Let us know. Take our latest poll, hit the message boards, or write to us here.