Storage Opportunities For Channel Partners

I've been invited down to the xChange gathering next Monday to speak on a panel with some of my industry compatriots on the above topic.

Although I can improvise as well as the next guy (and sound pretty good in the process!), I really enjoy open-ended topics like this that make me step back and reflect a bit.  As a result, I came up with way more material than I could ever fit into a 90 second panel soundbite.

Defining Terms

I tend to dislike the legacy terms of "channel" and "value-added reseller" and the like -- they don't reflect the true role and ultimate value-add of these important partners.

I tend to favor terms like "integrator" and "consultant" and "solution provider".  When I meet these partners, I tend to be less impressed by revenue numbers, and more impressed by the skills of their people -- and their relationships with their customers.

Every conversation I have with these folks starts with their business: where have they come from, where are they now, and where would they like to go?

IT Trends Favor The Customer-Focused Integrator

Running IT at any sort of decent scale isn't getting any easier.  Customer organizations large and small find it increasingly difficult to attract and retain the critical mass of skills required to be even marginally effective in IT delivery.

The opportunity is clear: by investing in the skills that customer organizations can't do themselves, VARs can climb the value chain from IT product fulfillment to trusted IT adviser. 

It's a natural business model progressing I tend to see almost universally.

So, one way of rephrasing the above topic might be as follows:

What new storage-related customer challenges are arising that require differentiated skills from value-added providers?

The Big Picture For Storage

Sure, demand for storage continues to grow dramatically.  No surprise here.  If you'd like some evidence, I'd point you to the annual study we do with IDC that forecasts ~40% information growth -- year in and year out.

More information.  More responsibility to manage it and protect.  More responsibility to manage the costs associated with all that information.  More growth in anything that touches it.  It's an industry dynamic that shows no sign of slowing down.

But it's not simply about more capacity.

At a big picture level, there are basically three things going on with storage: it's now built differently, it's now operated differently and it's now consumed differently.  It's a radical shift that's already underway, and sometimes I think most people don't have a good sense of what's really going on here -- and what the impact is turning out to be.

Whatever storage technology, capabilities and skills a customer might already have in place is getting obsoleted -- and fast.

This broad statement is largely true for just about every aspect of storage: primary, secondary, backup, replication, archiving, etc.  So let's dig in a bit deeper behind these broad statements.

Storage Arrays Are Now Built Differently

We tend to think of storage as enclosures of rotating physical disk media -- and that's been changing for a while.  First, enterprise flash drives continue to offer eye-popping performance effects in a vast majority of environments, and the prices associated continue to drop like a rock.

Second, various forms of compression and deduplication continue to get better, and are finding their ways into more and more mainstream use cases.  The benefit here is obvious: cost per usable terabyte drops like a rock as well.

Put both of these together -- and automate their use (EMC's FAST comes to mind as one example), and you've got an amazing opportunity to both dramatically improve performance as well as dramatically reduce costs in one fell swoop. 

Regardless of what part of technology we're talking about: servers, networks, storage, etc. -- these sorts of dramatic cost/performance shifts don't come along too often.  Since just about everyone is concerned about how much they're spending on storage, it's not hard to get substantial interest in this topic.

I think this shift opportunity favors value-added integrators who (a) understand the substantial business impact of these newer technologies, (b) help customers make the case for the newer technologies, and (c) assist in the implementation and migration to the newer environments.

To be more direct, if you compete for storage business, you certainly want access to the latest weapons :-)

Backup And Replication Technologies Have Changed As Well

No surprise, tape is being replaced by disk,and data deduplication is the key enabling technology.  Just about every decent-sized backup environment will be replaced over the next few years -- if it hasn't been already.

Some customers want to get the benefit of the new technology without any substantial process or software change.  But a suprising number are up for a complete re-thinking of how they do backup from a process and software perspective.

Of course, EMC is at ground zero of this opportunity -- leading dedupe backup technologies such as DataDomain and Avamar, enterprise-class backup packages that can leverage both newer and traditional approaches such as Networker, and service management portals that enable IT to deliver data protection as a service, such as Data Protection Advisor.

This shift tends to favor value-added integrators who can engage their customers around a broad discussion of how well they're protecting their information -- and at what cost.

The huge opportunity in re-engineering backup and restore has overshadowed an equally interesting opportunity -- remote replication for disaster recover, business continuity and other purposes.

The newer replication engines (such as EMC's RecoverPoint) can be far less expensive, far more heterogenous and far easier to operate than the traditional remote replication solutions.  As the capex and opex associated with these environments has fallen dramatically, more and more customer environments realize that they can now afford a remote protection approach.

There are other examples in the storage world where a fundamental technology shift has created the opportunity for new and better technologies, but new and better skills and services as well.

Storage Is Now Operated And Managed Differently

Continuing to operate and manage storage the way you've always done it makes no sense -- if the underlying technologies have fundamentally changed.  Sooner or later, the operational model around storage has to be addressed, and that's a pure services play.

The forcing function is that storage landscapes continue to grow and grow and grow.  And growing storage costs aren't only about hardware and software -- there are people involved as well.  In many organizations, you'll not only find the storage team touching storage, but server people, VMware people, database people, etc.

You usually can't simply scale more people to handle the additional capacity: not only is that prohibitively expensive, but the processes themselves tend to break down: things take too long, things tend to break more often, and there's inefficiency everywhere.

One core example is virtualization: virtual servers being used by virtual storage implies a storage operational process that's very different -- and far more efficient -- than what came before.  Ideally, you'd acquire, deploy, provision and monitor it completely differently than you did in the physical world.

The payback? 

For the customer, it's not only exploiting the cost savings and the performance of what the new technologies can do, but doing it with fewer people, fewer problems and more agility.  And this same general discussion applies to backup, replication and just about everything else in the storage ecosytem.

Storage Is Now Consumed Differently

Traditionally, IT groups bought a bunch of technology, put it in their data center, and hired people to go run it.  That was the de-facto storage consumption model, and that's changing rapidly as well.

First, we've seen explosive growth in more linearized consumption models -- a fixed investment to get in, and a scalable component that matches consumption.  Second, there's far more interest in using insourced help to run their storage environments.

And we've seen much stronger interest in using external service providers for certain aspects of storage: backup, archiving and remote replication.

From a partner perspective, I see this as a clear opportunity to move up and play an increasingly important role as trusted consultants.

The Bottom Line For Partners

Some of the partners I work with look at all of this as a strong rationale for investing in storage proficiency skills as a standalone business opportunities.  Everything has changed rather quickly, and there's a huge category that deserves a fresh look.

Other partners look at this as a good way to increasingly differentiate their overall proposition around solutions and applications.  Storage is a part of just about everything in IT, and there's a strong rationale to invest on that basis alone.

Either way, there's no question that there's a brand new opportunity around storage.

The real question is -- what do you want to do about it?