Netgear Pushes Way into Midmarket Storage

Already a dominant vendor in the SMB storage market, Netgear is moving up-market with two new solutions optimized for storage virtualization applications and support for up to 500 users.

Due to ship next month, the ReadyNAS 3100, a 1U 4-bay rack-mountable storage platform with up to 8 terabytes (TB) of capacity and the 4200, a 2U 12-bay rack with up to 24TB and two redundant drives in a single system, are VMware-ready, and are also positioned for Citrix Xen and Microsoft Hyper-V virtualization, says Mark Song, senior product manager of Netgear's storage products group.

This is an aggressive move by Netgear, "really different from what we're doing today," he says. Mainly positioned for virtualization applications, these systems also offer improved reliability but the same ease of use Netgear is known for, adds Song. In addition, the ReadyNAS 4200 is being positioned as a data center in the closet. Customers can look to Netgear as the single vendor for storage, networking and security, he says.

The announcements are also good news for the company's channel, states Drew Myer, director of storage marketing. He says the 3100 is one of the most affordable solutions in its class, with the broadest compatibility and opens up accounts that weren't available to Netgear. With the 4200, the company is "pushing our envelope into the SMB space,” moving up into the 500-user space, and representing a "great consolidation opportunity for resellers."

Netgear started expanding into the $5,000-$24,999 space last year with good success, says Myer. The enterprise-class players like EMC, HP and NetApp have to be careful of cannibalizing their margins with product lines priced for SMBs, while the smaller players like Buffalo, Iomega and Snap only offer parts of the solution, he says. "We see tremendous opportunity in the sub-$25,000 market."

Expanding into this segment means changes to Netgear's channel, says Myer, which was traditionally "a mile wide and an inch deep." Although it has 40,000 partners globally, the pyramid starts to taper pretty rapidly when it comes to storage expertise, he says. Although the U.S. accounted for just under half of its revenues (48%), there are only a few thousand partners who are either already certified for storage, or certified for one of the other segments like networking and security that might expand their reach into storage.

The company launched a number of specialization tracks last year, including storage, and will be launching a new partner program, with better rebates and Netgear's first-ever lead-generation program. "We didn't think we had the need, but now we do."

The company is also starting to spend more on end-user branding. Netgear needs to let prospective customers know about its breadth of solutions. A month ago the company reported its results for 2009, including a 36% jump in year-over-year growth for the fourth quarter, to $218.8 million. Net revenue for the full year was $686.6 million, an 8% decrease from 2008.
The ReadyNAS 3100, with 4 SATA channels, is the first sub-$5K 1U rack-mount storage system with redundant power supply for improved reliability and business continuity. Additionally, the ReadyNAS 4200, with 12 SATA channels, is the first ReadyNAS to support the 10 Gigabit Ethernet network infrastructure. Other common features include: unified architecture support for both NAS and iSCSI SAN applications; hot swappable enterprise SATA drives; redundant system cooling; redundant network ports; Error-Correcting Code (ECC) memory; and redundant power supply.

The 1U rack-mount ReadyNAS 3100 can come equipped with 4TB or 8TB of storage capacity at an estimated U.S. street price starting at $3,800. The 2U ReadyNAS 4200 can come equipped with 12TB or 24TB of storage capacity at an estimated U.S. street price starting at $10,000.