In tough economic times, it’s not unusual for vendors to reevaluate their product lines and eliminate those that aren’t performing well. But Network Appliance’s decision to kill off its StoreVault product, targeted to the SME market, is raising eyebrows across the industry, and opening up opportunities for the storage giant’s competition.

The StoreVault product line was launched in 2006 as a channel-only, small and medium enterprise-focused line. The S550 product was launched in April 2008, and in September 2008, NetApp changed the name to the S Family, and made the line more widely available to mainstream storage customers.

However, rumors began swirling when NetApp did not upgrade the products’ functionality to include, for example, support for Windows Server 2008.

Paul Clifford, President and Founder of the Davenport Group, says he was surprised to learn the S Family products would be discontinued, but that in hindsight, he saw hints that the move was coming.

“There were indicators in the past, most obviously with upgrades that needed to happen with the product that they kept pushing off,” Clifford says. He adds that despite these indicators, he’s not entirely sure why the decision was made, considering the popularity of the product among solution providers.

“I just don’t know what brought this about. The StoreVault was targeted to a broad-based customer segment and it was very successful for them,” he says. Clifford adds that one possible reason for announcing end-of-life for the S family was the lack of a clear upgrade path from the S Family to higher-end NetApp storage products.

“There wasn’t a clear upgrade to a lot of their other products, which was clearly a problem for end-customers and solution providers,” Clifford says. “There wasn’t a seamless migration path, which meant some customers got stuck.”

Bruce Kornfeld, vice president of marketing for storage vendor Compellent, says many companies that sell to the midmarket use a go-to-market strategy that involves a mix of direct and indirect sales.

The StoreVault/S Family line was an attempt by NetApp to compete more aggressively through the channel, but that having to maintain technical support, bug fixes and ensure interoperability quickly became overwhelming.

“It’s expensive to maintain a product line, and it seemed like solution providers were annoyed that it wasn’t meeting customers needs – especially when the upgrade path was stalled,” says Kornfeld.