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SMB to increase storage spending in 2004: Evans

The research firm predicts a 10 per cent jump in enterprise storage product revenues for this year.rn
That's why VARs are advised to sell bundled storage services for this market

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A Toronto-based research firm said selling storage to small- and medium-sized businesses is a lucrative opportunity for resellers because vendors don’t typically go after the smaller accounts.

Jennifer Ewen, senior market analyst for Evans Research Corp., said vendors like IBM Corp. and Hewlett-Packard

Co. will be heavily marketing to the SMB market and encouraging them to spend more this year.

“”Virtually every major vendor over the past four or five months has announced major new product initiatives aimed at the small and medium business market,”” said Ewen.

Dell Computer Inc., for example, is designing a new storage area network priced lower than its existing entry-level SAN.

While small and medium enterprises traditionally tend to be slower on the uptake of technology in general, Ewen predicts that they will spend more in 2004 than in previous years.

Evans Research has forecast a 10 per cent growth in enterprise storage revenues this year in Canada and the U.S. In 2003, enterprise storage revenues totalled slightly more than US$1 billion — an increase of 34 per cent from 2002. Enterprise storage encompasses DAS, SAN, NAS, tape storage, backup and recovery software, storage resource management software and storage switches and routers.

Ewen cited a strong economy, job growth and new regulatory requirements as contributing factors.

But the majority of growth came from the strengthening of the server market.

“”Storage and servers often go hand-in-hand,”” she said.

In terms of strategies for selling to this market, Ewen advises VARs to offer bundled services such as storage audits to help companies find out what they have and how to add new products to their existing mix.

Echoing Ewen’s comments, Michael Mercer, channel sales manager for StorageTek Canada, of which 80 per cent of its resellers sell to the SMB market, said: “”Storage today isn’t about point products, it’s about solutions.””

Mercer, who recently came to StorageTek after serving as Bell Micro’s vice-president, said the Louisville, Colo.-based storage vendor has introduced a sales certification process that focuses on sales and consultative selling to help its resellers recognize storage opportunities.

“”You’ve gotta fish where the fish are.””