NetApp (NASDAQ: NTAP) has stepped up its storage offerings for midsized businesses, lowering the price point on its entry-level product in an attempt to woo more customers in the market segment.
Virtualization is really driving the need for storage among midmarket customers, according to Jeff Goldstein, general manager of NetApp Canada. “What we find is the staff in these size organizations are typically generalists, not storage specialists,” he said.
The vendor has updated its Fabric-Attached Storage (FAS) 2000 storage family. It has lowered its entry price point on its FAS2040 storage appliance to US$7,500 for 6TB and added the new FAS2240 products, which scale up to 432TB and begin at US$19,000. The FAS2240 is about two to three times more powerful than its smaller cousin, which scales to 400TB.
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NetApp defines midmarket customers as having 100 to 1000 users, 15 to 100 servers and one to five IT staff. The market represents about 30 per cent of the company’s revenue and it saw growth of 24 per cent in the last year. “I’d love to drive a Cadillac, but I can only afford a Chev,” is what many midmarket customers are telling NetApp, and he said this product refresh is meant to accommodate that.
“We never have to do a data migration to go from smallest to biggest (in the product line),” Goldstein said. “We challenge our competitors around that topic.”
He argued that instead, competitors such as EMC Corp. or Hewlett-Packard would make midmarket customers scale up to enterprise product lines, which cost too much.
“We have one family that scales,” Goldstein said, as opposed to having to move to an entirely new product line. “You don’t have to be a storage black belt or expert to make it work for you,” which is crucial for businesses with “generalist” IT teams.
The new entry price point and scalable line also make for an easier sell for channel partners, Goldstein argued. “They have to be able to turn around a quote and a configuration … quickly, and we’re helping them do that.”
The scalability of the products is crucial for Roger Singh, CTO of Toronto-based Scalar Decisions Inc., a NetApp partner. Midmarket customers tend to have longer buying cycles and need to buy products that can accommodate their growth over periods as long as five years, he explained.
“We think we can go after some opportunities that right now we’re leaving alone,” he said, including remote offices of larger enterprises. “There’s more opportunity to sell.”
Partners can make 10 to 20 margin points on NetApp products, according to Goldstein. The reason they can do that is because of the company’s software offerings that bundle with the storage products, he said. The company includes, for example, NetApp OnCommand System Manager 2.0 for IT staff to simplify, control, and automate setup and ongoing management of the storage products.
