In the second part of an in-depth interview with ARN's BRIAN CORRIGAN, local EMC president, David Webster, talks about challenges and opportunities in the SMB market.
This year more than ever it seems every vendor wants to talk about SMB. EMC has an enterprise heritage but how far downstream do you think your technology can reach?
Today we sell our flagship Symmetrix products to large enterprises but the Clariion line is going all the way from large enterprise down to organisations that have as few as 50 people. I can see us continuing to drive our technologies down to lower and lower price points. The new Celerra NS20 storage platform comes in at about $25,000 with fibre channel connection, IP connection and NAS in a single box that is self-configuring and has a wizard-driven interface. That is going to open up a lot of new customers that think of EMC as a low-risk brand. We will continue to drive our technology down and open the market up. As we do, more resellers will want to play with the technology because they are dealing with organisations that have 25-50 people. Are we going there now? No. Are we going there in the future? Yes. Our intent is to access markets with resellers but to do that you need to have the right technology for them.
As you continue to go further into SMB, can we expect to see an acceleration of partner numbers?
We probably have about 50 resellers signed up today. Our strategy is to have a partner community that do good business with us and their customers. They need to be profitable in doing that because there is no point having partners sign up and then disappear when there is a high level of investment required in building their business. We advocate quality over quantity because we think over-distributing really doesn't reward a partner for training in your technology. Over time we will see partners do more and more of our business for themselves with less involvement from us. That's a trend I see continuing and the real focus is on getting a quality reseller channel ecosystem where they are making money, get good leverage from the relationship and can trust us. To do that effectively, you don't want to be just signing anybody up. You need a relationship where both parties know how to work together. By and large I think our reseller community reflects those values.
What are the challenges for a vendor with an enterprise background looking to extend its reach in terms of getting a message across to users and resellers?
Vendors need to understand that all resellers are different and you cannot easily categorise them. There are resellers that are leaders in the subset of what they do and by looking at them as individual entities that have their own needs, you get the ability to work with them on a different level. If you try to homogenise them, it's dumb and dangerous for the future. Resellers have different value propositions so it is important we respect that and work with it. I think we do that particularly well and understand what our resellers are trying to achieve. I don't know a reseller that doesn't have the principal involved on a day-to-day basis and there are often family relationships. Those factors mean they have to be able to make money so profitability is foundational for a healthy reseller community. I think that has been a challenge in the past because parts of the market have been over-serviced and resellers end up operating in a slice and dice, cutthroat environment where the focus is on selling boxes quickly and cheaply. We advocate a focus on quality of business rather than just volume and that is helping put more profit back into the partner community. We as a vendor must change more to meet their requirements than they must change to meet ours.
How does the move into mid-market and SMB change your competitive landscape?
It takes us into markets where competitors haven't had to deal with EMC before. We have a high level of confidence in our ability to enter these new markets, particularly IP storage. That's an area you will see us investing in and I assume it will have a negative competitive impact on our competitors. If you look at the IDC data for Australia and New Zealand we exited calendar 2006 with a 26 per cent market share in external storage systems but that had reached 38 per cent by the end of March. That's not a trend I expect to change.