The looming SAN storm in the SMB market part 2; continuation of the roundtable discussion on the emerging SAN market for small to medium-sized businesses sponsored by Computer Associates, Dell, Emulex, Intel and Microsoft.

Marrone-Hurley: Anders, you had mentioned before, from a management perspective, that you think that there might be different requirements in the market. I wonder if you could elaborate on that a little bit more?

Lofgren: Well, just at a very high level, it's back to what some other panelists said, it's really that they don't need the "137 features and functions." They just need the five. In many respects, it's a subset of the functionalities that the people in the data center have.

But I want to go back to this point about technology. If we are having a discussion of Fibre Channel versus iSCSI with a SMB customer, we've lost already--we've failed. It's a losing discussion; you can't win it. Just by our own definition, we're saying they don't have storage administrators. They have system administrators who do storage part time in kind of a hallway conversation. So if we're talking about Fibre Channel and iSCSI, it should be absolutely irrelevant to the end user. It's just a protocol we're using. What we're selling them is a solution. That's what we need to get to. Part of that is, as Marc pointed out, standards. Standards will get us there because then we don't have to deal with the interoperability issues that we did with Fibre Channel. But I think that when we start to talk about technology and we admit that they're not technology people (not specifically storage people) then we've got a real problem.

But back to your original question on the feature functions, I think that it's all about understanding what the customer experience is and what things they are using. So for example, lots of SMB customers have Windows, and a lot of them are using Exchange. So it would behoove us to fully integrate with applications like Exchange and make sure that we're serving the needs of those particular customers through the applications. That's also very key in the data center, obviously. With SMBs, however, you've got to deal with the ease of use issues because they're expecting it to be very easy; whereas, if you're talking to the people in the data center, they don't mind going through a little bit of work. And some of them actually enjoy it in some way.

[laughter]

Marrone-Hurley: Well, what's interesting is that ESG has just recently done a study on the future of data protection technologies, and exactly what you said came out--across the board--and we were able to get SMB and enterprise responses. And the number one application that needed the fastest recovery time was Exchange. It didn't matter if you were a small to medium business or an enterprise. So you're right, you have to be able to address the needs. The needs are the same. But now you have to provide solutions that address all these other issues that we've talked about--the low cost, the ease of use, the abstraction--and not have that technology discussion.

So, how are you guys going to do that? Can you elaborate on what your company's solutions are that are going to address all those needs that we just talked about?

Lorenson: I'm going to talk about specific things that Microsoft is doing that we hope will help with the issues we've heard about for SMBs. One thing we do is a lot of ease of use studies with different groups and try to understand what goes wrong when they deploy a certain application on a SAN, and we share that with our storage partners. The other thing we do is, we bring new storage technology--and one good example is Virtual Disk Service (VDS) which allows our partners to build an application on top of that to make storage provisioning much easier today than it was a year ago--so that it is almost at the level of a Windows administrator to provision storage on his storage array.

So, by sharing ease of use studies and pinpointing where the problems arise when the SAN gets deployed, we can help on the deployment front a lot, and we can also help in guiding which of these services and technologies we should add in the platform. And the other side of the equation, which we're very passionate about, is iSCSI. We think iSCSI has a lot of play in the small businesses that are moving from a direct-attached environment when they need to upgrade their hardware, and that's the trigger to move to a storage area network. Many of these companies go to iSCSI and we're enabling iSCSI with our server platform.

Marrone-Hurley: Mike, what's Intel doing to really address the needs we just discussed?

Wall: Intel views this market as a great opportunity, similar to what we realized in the server marketplace over the last 10 years. If you think about the transition in the '90s--where large mainframes were the predominant enterprise compute solution, and then the advent of standards and the high volume manufacture of microprocessors, and different operating systems--we were able to move the marketplace to a standard high-volume server model. When it first started, it was a desktop on its side, and it went to a two-processor server, and today we have 32-way and better Itanium processor-based systems that are as powerful or more powerful, with more features than any mainframe that ever existed. And we see that paradigm duplicating itself in storage moving forward.

So what we are focused on is delivering families of microprocessors and components that will enable that transition to happen in the marketplace. Our division is working with partners like Emulex to deliver a full system on a chip technology. For example, we're integrating protocol capability--Fibre Channel, SAS, SATA--with high-performance microprocessors based on the latest fab technology that will deliver levels of features and cost performance that have not been ever realized in the marketplace before.

Now, on top of that, we know that the application solutions and the standards must be there as well, so we apply a lot of resources to ensure that the standards continue to make progress throughout the industry. And we are working with the storage applications providers to ensure that they take full advantage of these building blocks so that we can deliver these capabilities.

Marrone-Hurley: Mike, what is Emulex doing?

Smith: I think the most important thing to be recognized when we go after this market--collective "we"--is that it is a big market and there are lots of shades of gray. There's not one target customer. And it's critical to understand who, within this market, the customer opportunity is, and who isn't our customer. Lots of customers I've talked to out there, lots of small business customers out there, are perfectly happy with internal DAS storage, and that'll do a great job for them for years to come. I talked to one guy whose idea of external storage was a USB disk. Probably not a candidate for a Fibre Channel SAN.

[laughter]

And that's okay. So, understanding that is the foundation for building the right products. In this market, one of the things we recognize is DAS and NAS kind of set the bar for ease of use and price points, and we recognize that. If you make it harder to use than plugging it in, you're going to have a problem. If you need to send an engineer with every system, that's a problem. If you have to require specially trained service people, that's a problem. So I think we all understand that at a conceptual level, but the devil's in the details, and understanding what it means for product design, for software design, for support organization design, and getting to the point where you pick the right five features that really nail it for this customer and get the price point right--that's what we're doing. We introduced our first product a couple of months ago. It's the Emulex LP101 HBA. I think it's a great product, but it's the first of, we think, many.

Marrone-Hurley: Marc, how about Dell?

Padovani: At Dell, we're going to continue to offer a broad range of solutions. Just as Mike said, customers have different needs and work from internal, direct attached, external NAS and SAN solutions. We're going to continue to drive and work with our partners to scale the solutions down and make them easier to deploy for our customers.

For the small business, there's a variety of technical knowledge that they have in deploying the solutions. We continue to make improvements in sales and implementation and servicing solutions. We offer a broad range of training programs for small businesses that just want to deploy the solution and not have to worry about it. There are others that are interested in understanding more about how the technology works and how they can get the maximum use out of it. With our training and certification programs, we can really enhance their knowledge and make it easier for them to understand how they can scale up their products over time.

We continue, again, to drive the standards. We're very active in the standards community to make sure standards move forward aggressively so we can implement them. The sooner standards are implemented across a broad supplier base, the sooner there's more interoperability, more choices and lower cost for the customer. And that's what we're going to continue to drive and continue to drive the best value in the solutions for our customers.

Marrone-Hurley: Anders, what about Computer Associates?

Lofgren: I agree with Mike in regards to recognizing what the market opportunity is, and that there's actually not just one target customer here in the SMB market, just as there isn't in the high-end. There's real need to understand that there are--I think he used the phrase--"various shades of gray." And there are certainly various customers within this marketplace. It's really about understanding that opportunity and, from my point of view, really looking at what the end-user experience is. What is that customer looking at? How is he interacting with the products? What problems are they trying to solve? And really thinking about what that experience is for them and then defining a product and a feature function set that meets that need. And then, my group hands it off to development and they can build it.

Two things. There is ease of use--and I'm repeating what's been said before--but ease of use is very, very critical. And there's also the time it takes to deploy. So you can't have a thing where the installation process takes weeks and you have to send somebody on site. It's not going to cut it: (a) they don't have the money; (b) they don't have the time. And so the ease of use, ease of install and user interfaces are critically important. At the same time, those five feature functions you're also bringing are really critical to that market. Some of those feature functions may be new, but a lot of them actually are just a subset of what's going on in the high end, and we're just able to bring that feature function down. So one of the things we did recently with our ARCserve 11 launch for Windows is, we introduced multipathing there. So now you have multipathing for those SMB customers in that market area.

There are technologies that trickle down that we eventually can move in to these products because, again, it's just a subset of the high-end's data center experience. Chances are, at some period of time, the guys in the SMB market are going to experience the same issue unless we can solve it for them ahead of time. So obviously, it's better for us to be proactive rather than reactive. Unfortunately, that's not always the case for us because the market moves so quickly. But I think it's really about that end-user experience and understanding that, defining products and designing products towards that, because their experience is--if you think about it--very different because they're different people than we have in the data center.

Marrone-Hurley: I have a lot of questions for you folks, but I assume our audience does too, so I'm just going to ask one last question. In all this discussion, we're talking about "taking the technology piece away," or abstracting this, ease of use, different types of needs in this market .... You're traditionally selling into the enterprise space, and storage networks have been traditionally sold in that space. How does this affect the go to market strategy? Are we talking about new partners, new channels, a different sales force? How do you end up actually targeting the SMBs versus what has been, at least in your case certainly, a traditional market?

Smith: That's a great question, and I think for a lot of us, it's going to be a "let's walk before we run" kind of thing. We want to make sure we nail this, that we do it right. And we've got a lot of experience working with OEMs. The key is to recognize that we provide what we think is a very important piece of the puzzle. You need storage, you need the switching technology, you need the server. And right now, I think, the right approach is to let guys like Dell (they're experts in bringing this directly to customers) do that and provide a really tightly integrated, easy to use solution and get that to market, prove the marketplace exists, prove the technologies can work, do the job. And we'll build out from there.

Marrone-Hurley: Anders, I know you've been selling solutions into the SMB market, but do you consider that there's going to need to be any changes from a channel perspective?

Lofgren: We have a fairly substantial channel organization today, and I think the focus on that will only increase. But I think that in terms of the go to market, the keys in the channel is that, again, it's just like the customers. There's not just one profile for that channel partner. There are different types of channel partners. You have some that are more value add, that can do a little bit more; and you have other guys who are in some sense more of a commodity play, where they're just basically pushing products out. What you really need is to be building that awareness and you need to be creating the demand. Actually, a lot of the fulfillment occurs through the channel. And that happens with some channel partners. But there are other channel partners that obviously are more value-add, where you can actually go to market with them and build that awareness and build that demand in those particular marketplaces. And it really takes an intensive effort to recognize which market you want to go after.

If you're going towards more of a value-add partner versus somebody that's more of a commodity who's pushing boxes out there--each type of partner is going after different customers. So again, it's a little bit about pricing and a little bit about packaging; but it's a lot about building that market awareness and understanding what the needs are and the pain points are for those particular customers.

Marrone-Hurley: Did anyone else want to answer that question?

Wall: Well, you've got one big systems provider sitting on this panel, so I'm surprised you didn't direct that question at Dell. We all sell software components--or as Mike said "a piece of the puzzle." This is the guy here that takes a lot of those and then goes out and will create the growth, we hope, in this marketplace.

Padovani: We use the direct model to drive our customers, to communicate to our customers. And part of the growth and improvement in standardization, and working with our partners here on stage and others to really drive the simplicity around putting together a SAN solution, is going to make it easier for us to offer it online and make it easier for customers to order it. We will continue to work to get there. We want to make this so that it's very simple, so somebody can just go online and just point and click and buy a SAN. That's where it needs to go.

Marrone-Hurley: And, Claude, how about Microsoft?

Lorenson: Most of our revenue comes from channel partners, so we're working with our storage partners right now to bring a solution that's simpler. But we don't do too much in the way of direct sales, so channel partners are critical to us.

Part 1 of this roundtable appeared in the June edition of CTR. To obtain copies of the issue, please contact [e-mail].

RELATED ARTICLE: PARTICIPANTS

Nancy Marrone-Hurley: senior analyst with the Enterprise Storage Group and roundtable moderator.

Mike Smith: executive vice president of worldwide marketing at Emulex.

Anders Lofgren: vice president of BrightStor product management products at Computer Associates.

Marc Padovani: senior product marketing manager at Dell.

Claude Lorenson: technical product manager for storage technologies at Microsoft.

Mike Wall: general manager for the storage components division of the networking and storage group at Intel.