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Opportunities in store for whitebox channel

Opportunities in store for whitebox channel

Marketing director for storage vendor EMC, Jordan Reizes, is out to dispel some myths around backup technology.

Like many vendors in the sector, he points out that network-attached storage is cheaper and easier to install these days and is increasingly in demand among small to medium business customers.

"Traditionally, storage has been the domain of companies like Dimension Data and Volante because it has been complex and hard to install," Reizes said. "But over the past 12 months, Dell has done extremely well selling network attached storage into the small to medium business sector. There are clearly opportunities there that the whitebox channel could take advantage of."

Reizes said Dell had got the jump on the whitebox channel in this case because it had managed to shift focus away from server based storage, and tested the market for a low-cost, easy to install network attached unit.

"At the moment a lot of resellers are solving storage issues by simply connecting up another server," he said. "But with just a little more knowledge they could connect a network attached storage unit and provide the customer with a better solution.

"They understand putting storage in the server. It will just take a small shift in thinking to put it outside the server."

EMC is hardly the only vendor targeting the SME market with storage solutions. With the corporate market saturated StorageTeK, IBM, Hitachi Data Systems and HP are all making a play for a piece of the action, offering cut down versions of high-end products.

This is good news for whitebox resellers looking to expand their storage portfolios and bundle low-cost solutions with locally produced systems.

Commercial channels and OEM sales manager for StorageTek A/NZ, Sam Srinivasan, said the cost of high-end storage had dropped from 25c to 1c per megabyte over the past two years, and continued to fall by 20-30 per cent annually.

"Disk technology is now cheaper and a lot of the complexity has been reduced, making storage attached networks a more cost effective and attractive solution," Srinivasan said.

Such networks are most suited to organisations at the upper limit of the SME sector, and network attached storage of kind offered by EMC becomes cost effective for organisations with two or more servers.

Nonetheless there are also storage solutions aimed at mini and micro businesses, and even home users.

Traditionally limited to enterprise customers, hosted storage vendor DYO Services has made the offering available to the SME market, designing it to be affordable and easy to manage.

"We offer an automated offsite, backup service," DYO Services director, Col Poulter, said. "It's extremely low cost. In fact, we've priced it at about 10 per cent of what a customer will spend trying to do it themselves. The service starts at around $9.90 per month."

Poulter said the DYO offering was particularly suited to locally manufactured PCs, because it targeted a market where whiteboxes traditionally do very well.

"Small businesses have every single cost accounted for, and this is a way the reseller can reduce costs and the time they spend trying to do their own backup," Poulter said.

According to research Poulter conducted amongst the DYO Services customer base, up to 85 per cent of small businesses had poor or non-existent backups prior to adopting the DYO product.

"The same businesses valued their data at an average of $66,000," he said. "That's more than 10 times the value of the computers it was sitting on, and yet they would insure their computers but not their data.

"Resellers who can make the customers aware of the value of their data, can make themselves an extra sale, and also do their customers a real favour."


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