Crunch time for tape channel

Crunch time for tape channel

Pressure is building on resellers of tape-based storage, with current market conditions resulting in the current situation being branded as "crunch time" by one Meta Group analyst.

As the price of hard drive technology goes down and reliability improves, tape manufacturers are being forced to evaluate their route to market. The result has been a flurry of combined media appliances and commoditisation, according to Meta Group research director, Kevin McIsaac.

"If you are a reseller and looking at storage as just shifting boxes then your future is very bleak," McIsaac said.

"You need to get out of being a hardware organisation and start providing services.

"All resellers should be looking for recurring revenue," he said. "The money is not in the tapes but what you do with them."

Tape vendors are already starting to put more pressure on their channel partners.

Tape specialist Tandberg's technical development director, Tan Kok Peng, said the company had been educating distributors in a new sales model.

"We have reacted to the challenge from hard drive manufacturers by developing a disk drive product ourselves," he said. "Our channel partners are quite capable of accommodating the changes - we've convinced them it's the right way."

Vice-president and managing director of Exabyte's Asia-Pacific sales and marketing division, Jalin Anderson, said his company increasingly relied on the channel to ensure continuing sales of integrated solutions.

"We have seen pricing pressure from the server market - the low cost is placing demand on the whole storage space," he said. "We are focused much more now on solution-based sales. We need the channel's help to allow us to make it happen."

Quantum has recently dropped prices of tape drives by 22 per cent and is offering free tapes to the channel.

Product marketing manager, Mike Sparkes, said tape would be key in the data archiving requirements for SMEs, but end-users would want to combine best-of-breed vendors.

"Storage technology is becoming commoditised," he said. "Companies can now get away from being dependent on certain manufacturers and we believe very much in that."

Tape has come under fire recently from vendors keen to take away market share.

Iomega's Rev drive targets a segment of low-end users where tape would once have been king.

The company has also recently launched an autoloader for its Rev cartridges that provides a maximum of 350GB of storage when full. "Improvements in hard drive technology and the launch of the Rev drive will have an effect on tape," Iomega country manager, Scott Dillon, said. "If that's where my money was I'd be worried."

Hard drive specialist SLI-Consulting's principal consultant, Jose Goldmann, also said he had been approached by a number of tape specialists looking to form partnerships to take products to market.

McIsaac maintained that, in the face of threat from proprietary formats and improvements in hard drive technology, tape would survive as long as the channel learned how to support it.

"This has been going on for a long time - there's nothing new here," he said. "Tapes serve a purpose for archiving and there is a very real requirement for them in business. Storage spending has started to grow again - resellers need to learn to start including ancillary services."

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