The striking thing about the distribution sector is how different theilor their sales and services model to fit the particular sector they choose. approach of each individual distributor is becoming. Some distributors treat the disk drive as a commodity; others try to add value in specific ways; while a few focus entirely on the high end, and some try to do all of these things. Like the vendors, distributors are having to select the market they are in and tailor their sales model and services to fit that sector.
Ideal, for example, addresses the volume market but is trying to lower its cost of sales using electronic ordering, while pressing sales people to focus on working with resellers on higher value sales. It is also providing services through its Unisolve business unit.
At Computer 2000, volume disk drive sales are handled - as they are at Ideal - through the components division, while high-end equipment is channelled through a specialist storage team. The approach taken by CHS - with Karma handling the volume - and Ingram is not dissimilar.
Focusing entirely on the high end market are distributors such as Hammer and Storm. Hammer prides itself on matching systems to customers as does Storm, which deals solely with Compaq Storageworks, IBM and Sun products. Then there are smaller, more specialised distributors such as Primary, which package up the storage system into one box for specific systems, tapping into the after-market and upgrade opportunities.
But in the volume market, conditions are tough. Seamus Twohig, director of the components business unit at Ideal, thinks most distributors are feeling the effects of a slow first-quarter.
'Everyone needs to liquidate their kit and make sure they avoid cash flow problems. If you buy stock and then have to pay for it before you have been paid yourself, this is a problem. So you have to make sure you move product rather than worry about margin. We are seeing a lot of grey market problems as well.'
In what seems to be turning into a Wild West-type market, firms such as Ideal are having to be smarter about how they go about their business.
Ideal is relaunching its own-branded Blue Disc range and looking at higher value sales. The volume market for disk drives does not appear to have very bright prospects. Aside from the current stock position and general slowdown in the growth of the PC market, there is the millennium bug to worry about, too.
If that causes a further slowing down in sales, the fourth quarter of this year could be very poor for the distribution sector. There are signs that some distributors may try to minimise their stock exposure through the summer, but first they must shift their current stocks and so prices will remain low.
Distributors must seek out other ways to make money from storage. But even companies with a different package are finding it hard going. Frank Lavery, sales director at Primary Distribution, which sells pre-configured drives for top brand systems such as Compaq, IBM, Hewlett Packard and Dell, says prices are under pressure, even in the high end, but that's just something the industry has to live with.
'In the network-attached market, you are talking about 80Gb of Raid going in,' he says. 'Yes, prices will come down, but that gives us and the reseller an opportunity to add value - you can't have just any Tom, Dick or Harry installing it.'
With storage becoming as easy to click into the Lan as a printer, and more high-capacity plug-in products coming to market, Lavery says network-attached storage will be a big area of growth for the channel.
As you might expect, it is in the high end and the services business areas that distributors see most money being made now. 'The storage management software market is astronomical at the moment,' says Andy Shepperd, director of the storage specialist unit at Computer 2000. 'People are trying to strategically manage their information. They used to say they needed a back-up - now they say they need to be able to restore, and quickly. It's not just about capacity anymore - it's about performance.'
Resellers have long ago bought into Raid and are ready to move on, says Shepperd. He thinks network-attached storage and Sans will be good areas of opportunity over the next few months. 'San is still emerging. There is an awareness of it and it is an early market, but all the factors that will drive it are there - massive growth in capacity, closing back-up windows and an increasing need to manage the storage resources.'
He also sees there being a lot more integration of the storage element within the overall IT infrastructure. 'The whole area of storage and networking is overlapping. You need to manage networks as well as data, and if you look at speed and availability you are into networks as well as storage.'
If this is true, it gives the broadline distributor with wide technology experience an advantage. But broadliners, as ever, have their detractors.
Paul Sangster, sales and marketing director of Hammer Distribution, says distributors can only operate in the high-end market if they have the right skills. 'The majority of broadliners do not fully understand the high-end market and their staff don't understand the difference between high-end and commodity products. Vendors are reluctant to give broadline distributors high-end products as they are not focused.'
Whoever provides the products and services to resellers, all agree that the high end is the place to be. As well as a growing interest in the storage resources and upcoming technologies, the drive to put more control and resource at the centre is increasing the pull for management products and services. Storage is becoming a much more central part of the overall system.
The high-end storage market is very healthy, says Derek Warry, strategic business manager at Storm, and he notes a tangible shift onto the NT platform.
'There are an awful lot of applications going in. It is an unmanaged entity.'
Users are putting more strategic applications onto the standard platform and this is partly what is driving the growth of large-scale systems under NT and the need for networked and managed storage. But Warry thinks it will drive the purchasing of even more drives before it triggers off a boom in management software. 'If you have a capacity problem and you can either go out and buy another disk or do some management, what are you going to do? Ninety-five per cent of people are probably going to buy more disk.'
Warry is also sceptical about the early prospects for San. He does not believe the key vendors have got their act together. 'San is still in its infancy. It is starting to get there but it's a softly-softly approach and one of the things vendors don't like is that it makes storage very open so you can use anyone's boxes.'
IS THE SAN ALTERNATIVE ALL IT'S CRACKED UP TO BE?
The storage area networking (San) systems being offered by some of the big-name vendors are, according to some storage industry experts, simply not up to the job yet.
US vendor Storage Computer, for example, claims that it is a 'prevailing myth' that fibre channel is synonymous with building a functioning San and that its Raid approach means customers don't need to wait for other vendors to solve compatibility problems or establish interoperability standards.
Glenn Brackenridge, product specialist at Raid vendor Baydel, says if you look closely at the functionality of the current San systems, they offer little more than greater cabling distance over a well-constructed open Raid system using direct-attach SCSI. 'With low-cost multiple SCSI channels, it is possible to construct configurations which outperform the fibre channel-based San, yet still benefit from the San-like capability of failover.' Veritas, for example, he says, supports dual servers and failover in a SCSI-based environment. Similarly, direct-attach storage benefits from the standard and established file-serving protocols in the host server, which allow its clients to share the storage. Brackenridge claims this offers a clear advantage over San, where a standard file system will be required before true data sharing becomes a possibility.
'Even then, the lessons of mainframe clustering show that sharing overheads may severely affect performance levels,' Brackenridge says.
In fact, most IT functions are based on a single-server, single-storage approach, with failover and secondary access available as options. The arrival of a San promises to increase flexibility, but access is still likely to be of a point-to-point nature.
Other companies are also offering alternatives to the full-blown San approach. Storage Computer has a Raid system that it claims provides San functionality without the need for additional infrastructure components and the cost that such an upgrade implies.
Baydel, meanwhile, has decided to continue with its development of direct-attach storage, increasing functionality and performance so that users don't need to migrate to an entirely new architecture to get higher performance.
But, as if to hedge its bets, Baydel is also ensuring that it is following the San line by designing systems that have the ability to connect to both/either SCSI and fibre-channel. Fibre channel connectivity will be introduced by the company when San standards have been settled, but not before, says Brackenridge.
Mel Taylor, business development director at enterprise storage vendor StorageTek, agrees. He says Sans won't work for anyone if they are kept proprietary. 'The key issue for San technology is openness. A San is made up of a multitude of products and all have to work together. Standards bodies such as the Storage Network Industry Association (SNIA) and the Fibre Channel Association are vital to the success of Sans for everyone - whether user, manufacturer or dealer.'
Herein lies the opportunity for the channel, he says. 'Sans are complex combinations of technology from different sources and require considerable service to set up and support.'
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