Last week’s announcement that NetApp would acquire data deduplication and storage management vendor Data Domain sparked new questions about what continued consolidation among storage vendors would mean for the channel.
As IT budgets tighten and businesses of all sizes struggle to do more with less, customers may be less willing to make new technology investments, fearing that an acquisition by another vendor might render their solutions obsolete or eliminate support for mission-critical solutions.
“In a market with this much consolidation, there’s uncertainty that leaves many customers wondering how to manage the changes,” says Jim DeCaires, Storage Product marketing manager for Fujitsu
America
.
DeCaires says recent announcements like Oracle’s acquisition of Sun and NetApp’s acquisition of Data Domain have a profound impact on many customers who now face uncertainty about their future technology plans or even how to address immediate business demands, DeCaires says.
Even though acquisitions typically only last three to six months, that’s plenty of time for businesses—especially SMBs—to lose a competitive edge if they’re unsure of a vendor’s roadmap.
But after the dust settles, the merging of like-minded vendors with complementary product lines can actually provide a number of benefits to solution providers and customers, especially in the lucrative and still-growing SMB space, says Lee Johns, Hewlett-Packard’s director of marketing, HP StorageWorks.
While solution providers servicing larger enterprise customers may not welcome a decreased number of vendors from which to build solutions, the situation’s different for SMBs, Johns says. Solution providers – many of whom are SMBs themselves – may not have the resources or the time to choose between different vendors’ components to build a highly complex solution, and it’s incumbent upon large vendors to help develop those solutions for them.
“We believe that for SMBs it’s really about being able to choose solutions that are powerful and simple, and that increases their confidence and value to customers,” he says. Providing an end-to-end solution from a single vendor means solution providers and their SMB customers have access to easier-to-manage, better integrated solutions, with the added bonus of a single-vendor support option.
“It’s not just about the storage industry,” Johns says. “Storage touches so many other areas within a data center – networks, desktops, servers, virtualization deployments,” he says. It can be a challenge for single-component vendors to work with their channel partners to pull together solutions, he says.
DeCaires and Johns both believe that large, global companies such as Fujitsu and HP serve as a beacon of stability in an uncertain market for solution providers.
“Solution providers and customers can be confident that broad technology portfolios and innovative leadership means these companies can be trusted to deliver products, services and support today and tomorrow with less uncertainty, not more,” DeCaires says.
Though there’s likely to be some upheaval surrounding NetApp’s purchase of Data Domain, NetApp executives reiterated the strategic benefits of acquiring DataDomain, which specializes in deduplication technology and tertiary storage systems. Data Domain’s portfolio will extend NetApp’s ability to compete in the increasing number of installations wanting to minimize their reliance on tape, according to NetApp. The Data Domain acquisition also increases NetApp’s ability to capitalize on the growth of disk-based backup adoption, a trend accelerated by the economics of deduplication, according to the company.
Solution providers from both vendors will benefit from the ability to deliver not just an end-to-end storage solution, but cutting-edge data deduplication and storage management technology that can help save customers time, money and infrastructure management headaches.
NetApp Chairman and
CEO
Dan Warmenhoven said in a press briefing after the acquisition announcement that DataDomain technology complements NetApp’s NAS and
SAN
storage technologies. Though there’s a healthy overlap in channel partners, there aren’t many joint customers, which will mitigate potential channel conflict, Warmenhoven says.
Once the acquisition closes, NetApp plans to operate DataDomain as a separate product line with separate product and development management.
Critical to the success of NetApp’s current and future success is its channel and business partners, particularly large integrators that are able to design, implement and service complex storage systems.
Part of the reason channel partners will take on greater importance to NetApp is a trend Warmenhoven is seeing in which end users—particularly midsized companies—are moving away from direct deals and engaging more with solution providers that can deliver hosted storage infrastructure.
“If you look around the globe, [enterprises] don’t want to deal with the data center and the storage infrastructure,” Warmenhoven said. “They just want the service and have storage as an expense.”
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