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Storage & Media

Storage & Media

Information is like money. The more you have the more you need and the more precious it becomes. That's why in the "information age" the business of selling storage and media is a thriving industryStorage and media fulfil such a fundamental part of our lives we rarely stop to consider what's going on. We save, seek, transfer, retrieve and sort all with barely a thought to the process; that is, until it's lost or someone moves it - the old misfiled record scenario?

With prices tumbling it is not only fast becoming a buyer's market but it's also a huge opportunity to make money.

When it comes to the solution, customers have some specific demands: reliability, security, accessibility and speed, with the order of preference varying depending on individual needs.

What's driving this market?

Information, and the power it has in competitive business issues, is the first factor to consider when looking at the market. Service organisations trying to recycle their clients for new business rely on historical information to track customers' activities. To keep up, they are implementing data warehousing and data mining applications to take advantage of optical and CD storage solutions in order to provide cost-effective access to users. Replicated databases also offer opportunities for selling additional storage.

"This demand is being driven by an overall demand to have more information available on-line," says Paul Rushton, StorageTek's Australasian marketing manager.

This information isn't restricted to just existing computer files, it includes paper-based and microfiche files that need to be scanned, plus everything from text, charts, graphs, animations, video clips and sound files to anything else that multimedia and networks can offer.

Added to this is the exploitation of the Internet which has opened our eyes and our minds to the whole idea of keeping and distributing vast amounts of data.

Even within the computer industry some players are not without their shortcomings in being able to keep up with the market. Testimony to this fact is one large storage manufacturer who, when asked if he knew how much storage was sold to new versus old customers, was unable to answer.

Any accumulating mass of information requires increased storage. Hence the second reason for the market growth: the need to upgrade. Existing systems need to expand their existing storage capacities as well as invest in different types of storage.

The technology is exciting and it's matched with a growing variety of solutions that allow for vast amounts of information to be made available faster. DASD, RAID and traditional hard drive technologies are growing like topsy, but newer technologies like CD, optical and removable products are creating opportunities for resellers to provide economical on-line solutions to customers who want access to information on-line.

Thirdly, at the end of the day the value of any information can be assessed by the value of its loss - the final key to selling storage and media solutions is backup. Backup represents the insurance policy of information systems: your bet against the customers, that their information is at risk.

Helicopter shots

Taking it from the top of the market and spot-lighting some of the business opportunities provides a clearer view of where products fit.

According to IDC's John Blair, the extraordinary growth of the mainframe storage market during 1994/95 is now being mirrored in the mid-range market and is valued at $200 million per year with the possibility of new opportunities on the horizon.

Rumour has it, Blair says, that the worldwide DASD market for Unix servers, worth $4.9 billion in 1995, could be worth around $8.3 billion in 2000.

"This may well suck in vendors we haven't even seen in Australia yet who would choose to use the channel rather than move in on a direct basis," Blair said.

As already mentioned, prices are dropping and some figures suggest a 30 per cent drop in price per year per gigabyte, requiring additional sell-through to the tune of 44 per cent extra capacity each year in order to turn a dollar.

The real action is being created by an explosion in the corporate LAN server environment. As more and more organisations migrate their "mission-critical" applications from the mainframe to more distributed environments, the opportunity to sell additional storage and archiving products is created.

No-one is ever alone in a marketplace and as the downsizing era matures, the traditional mainframe manufacturers are providing products with a price to match. Meanwhile the lower-end manufacturers are scaling up to meet the market's needs. So, with a meeting of minds on the middle ground a war begins.

"EMC with its aggressive pricing strategy is pushing vendors such as IBM, Amdahl, and StorageTek to the mid-range market," says Blair.

Even companies such as StorageTek that have a large share of the large system's automated tape market admit there is an explosion in the requirement for the distributed LAN and mid-range server market.

Robert Ek, general manager of SCSI Corporation, promotes Optical and CD technology as a way of providing accessible information.

"Optical storage is great for large image repositories and CDs will become more price performing towards the end of this year. The key to success with these solutions is getting the data off the disk quickly," says Ek.

Chris McCabe, account manager at IT Connections, one of SCSI's distributors, has noted success in this area. A typical sale consists of selling CD recorders for document imaging from microfiche on to CD-ROMs. These are then arranged in towers to be accessed by hundreds of people on a network.

"Prime Minister John Howard may be threatening to put the razor through the government IT budget and cut one billion dollars, but since storage represents added value to current sites it's a fine opportunity for resellers to find niche sales," says McCabe.

"The wide acceptance of CDs and the drop in price of CD recorders makes these products more acceptable to use in-house for publishing information and either selling it externally or distributing internally."

Likewise, Gary Cook, marketing director at Wang Australia, says the optical market is set to take off.

"The need for storage is going to be driven up so dramatically with information that people want from the Internet and also internal networks," he said.

According to a recent presentation by Cook at an IIR conference, optical's write-once-read-many provides higher capacity at a lower cost than other mediums. This, combined with hierarchical storage management (HSM) software, is central to any developments in the optical environments, he said.

Backup solutions

Quarter-inch tape (QIT) still holds the balance of power for backup popularity, although the last five years has seen the introduction of DAT. However, some problems associated with DAT, which have forced some users back to QIT, has left the gate of opportunity open for DLT, a technology which has migrated down from the high end of the market.

"DLT is starting to gain groundswell because of the huge amounts of data you can back up. But although it's faster it's expensive, says IT Connections' McCabe.

A player in this market is StorageTek with its large robotic systems and RAID storage. Having traditionally serviced the larger organisations on mainframe or large Unix systems, it recently released its small version. Timberwolf is a DLT high-capacity tape system popular in the Unix market. It provides 20Gb on a single cassette and 580 cassettes in a single library system.

"We are introducing a range of systems that support a smaller requirement which don't need everything backed up centrally but need a solution for their mid-range systems and LAN servers," says Rushton.

Exabyte, with the recent release of its Mammoth product, is rising from the PC market and looking seriously at staking a claim in the mid-range market. Its new 40Gb 8mm tape drive for $11,114 claims to be the fastest in its class with twice the transfer rate of its closest competition. It also promises the lowest cost of ownership over a year when rated in dollars per Gb per hour, compared to existing technology drives like DDS-2 and DLT. Added to this is its backward compatibility, with more than one million 8mm tape drives shipped since 1986.

Small business - big backups

Mike Ferris, managing director from Tdata and distributor of Tandberg products, cannot under-estimate the significance of quarter-inch tape. With the recent release of its library systems which provide one terabyte of storage off-line, and after a bad experience with a DAT product, he is a strong proponent of the tape market.

"Some sectors of the market are getting disillusioned with DAT devices," he said, "and are coming back to the tape cartridge.

"It might be old, but the truth of the matter is there is a 13Gb variety on a quarter-inch cartridge which not many others can offer - DAT devices tend to top out at 8Gb," he said.

Ferris's market is businesses with small networks that need the option to back up the network from a single server and where everyone is responsible for their own backups.

The opportunity for repeat business comes from increased storage.

"Five years ago if you'd told me you needed a 5Gb storage I would have laughed - these people are less discerning about what they want to back up - they back up everything".

The added bonus is the supplies.

"Whoever buys a tape drive will usually buy at least ten or fifteen tapes to go with it."

Retail heaven

IDC's Bruce McCabe says that traditional floppy disks are destined to be replaced by newer technologies such as the Zip and writable CDs. He believes that these will be coming onto the market and becoming more affordable in the next few years.

Why? The humble 1.44Mb floppies are just not big enough to hold that powerpoint presentation anymore, although for the time being it still has a market. Anyone buying a PC for the first time should not leave the showroom floor without a stash of floppies for backing up critical data files, along with a storage case and some colour-coded do-dads that will let them distinguish their disks from the preschoolers.

Hard drives don't go away, they just get bigger, and again IDC's estimations predict hard drives will increase roughly at the rate of 250Mb per year. Anyone who bought a PC two years ago is likely to be ripe for an upgrade in the form of a larger hard drive to replace the old one, an additional hard drive, or some other media such as Syquest to give them expansion.

Even at the low end PC users who want to take advantage of faster drives need new controllers and are happy to pay the incremental price difference to make it worth while to achieve the benefits of increased speed.

Also in the wings are enhancements to CD-ROM drives which will give way to NEC's PD-CD drive, a device which lets you place your audio CDs, use your convention CD-based software and still back up your data onto a removable 650Mb PC cartridge.

Compaq has already started shipping NEC's PD-CD product and Acer plans to include the Zip drive as a storage device in its new PC Line, AcerBasic, this month.

Punters predict PCs will start to be sold with either CD-readable or Zip media as a standard feature within the next two years. And as the higher-end technologies trickle down to the desktop, so will the prices, boosting turnover.

There's no limit to the amount of information that can be made available. Whether it is on paper, on a computer or microfiche, the neat trick is to make it accessible to the customer at an agreeable price. Do this and there's a motza to be made.

Removable storage

One interesting wrinkle in the market is the advent of removable hard drives. This is a personalised drive which lets the user roam from site to site with their work under their arm.

At the mid-range end of the market, the RS/6000 and AS/400 Kingston's DataExpress is made up of a receiving frame and carrier, into which the reseller fits a hard drive.

Keith Hamilton, marketing manager for Kingston's in Australia, touts it as a good reseller product.

"Because you're looking at the higher end of the market you're looking at more margin."

The education market is an example where different educators are coming in and out and teaching different courses, each with their own removable hard drive which can be used in a single machine.

"It gives flexibility to use different operating systems and makes it swappable," Hamilton said.

Another Kingston product in the same line is the DS500 Fault Tolerance Box which accepts these drives.

"The opportunity is you have the option to source this with the drives or you can source the drives yourself using Seagate or Connor," he saidThe PC end of the market is fast adopting a similar technology. Syquest and Polaroid Zip both have multipurpose products that can act as backup devices, hard drive expansion and are a solution to the large files transfers problem.

The benefit is the flexibility it gives small businesses, home office users and family PC users by way of unlimited storage - once they buy the drive they can buy extra cartridges as they need them. Syquest's removable hard drive facility particularly suits those who occasionally work from home and need the same information in both places.

The range, which starts at EZ135 135Mb and tops out with the SyJET 1.3Gb product, means whole applications and systems can be stored on a single disk. No matter if the hard drive fails, these systems can be used to boot from.

Also in this range is the Polaroid Zip Drive. This product is based on floppy technology with a capacity of 100Mb, the equivalent of 70 floppy disks.

The flowthrough for anyone selling these products is the media cartridges.

Syquest's marketing manager, Meyer Mussry, says that, on average, for every sale of Syquest, dealers will receive orders for seven cartridges.

"This makes for a very profitable supplies business, because without any effort on their part, the customers keep calling them up," he says.

As Maureen Hugh, from Polaroid, explains, media is often an afterthought.

"There's often room for resellers to tell customers this and encourage them to buy one or two extra cartridges at the time of the sale," she says.


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