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Microscope recently gathered together representatives from across the storage industry to take the pulse of the market and discover what the channel needs to be doing to put itself in the best position for the future. In the first part of our coverage of the roundtable debate, our panel of experts looked at the the EU's General Data Protection Regulation (GDPR). In the second part, they talked about DevOps and cloud.
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In this third and final part, the experts discussed storage hardware, flash, and the challenges facing their channel partners.
Can you still make money selling storage hardware?
Andy Corcoran: There are still some extremely large reseller partners in the UK that make lot of money from hardware, and long may it continue. But there is a general level of understanding that the market is moving on at a dramatic pace and they need to keep pace with their customers. There aren’t too many that are locked into the idea that they are just going to do hardware.
Mathias Grobet: There is a need for transformation and education in the channel. Today’s vendors and partners need to answer to business challenges and should be able to discuss business-specific pain points at C-level. Whether it is with HR, DevOps, production or finance, the approach must change and competencies with it.
Andy Corcoran: Some traditional hardware partners are seeing a 20-25% decline year-over-year in their results, so you can see that those traditionally labelled as hardware need to change.
What is happenng with flash? Is it being widely embraced by partners and customers?
Nicholas Maigne: There is a global flash shortage right now, so the industry has invested in new technologies to increase densities and lower costs, but that’s kind of provoked a surge in demand. So, we are not quite in a normal cost decline curve right now – pricing is not decreasing, because demand is exploding, notably in the enterprise storage segments. There are older segments in the industry that are seeing this growth as well, and it’s interesting – you talk a lot about all-flash arrays, but we actually see faster growth in not only hyper-converged, but everything around server-side storage and PCIe NVMe flash. The growth there for flash is very strong.
Dan Chester: The journey to that future state of the all-flash datacentre has been like the journey to the cloud. There’s a clear desire from a technology perspective, and in some cases from a business perspective, to go all-in and have the performance that flash offers for all workloads, but I think things will settle in the middle ground. It will be about what workloads work best on a performance tier, which will end up on flash, and which are better suited to a capacity object storage tier. The economics will be a tipping point for picking off more workload for flash as the economics of Nand and future flash technologies improve. But there are fundamental challenges around the economics of building Nand factory capacity, whereas you’ve got disk drive vendors with a mature technology pushing ever higher drive capacities. Disk will be around for the capacity tier for a long time to come. Just as tape continues to be around – despite many predictions, it still isn’t dead.
- Dan Chester, regional sales manager (UK & Ireland), Cloudian
- Ezat Dayeh, regional technical architect, Cohesity
- James Hall, EMEA strategist (storage), HPE
- Nicolas Maigne, senior business development manager, EMEA – storage, Micron
- Jerry Rijnbeek, director of sales engineering, EMEA & APAC, Rubrik
- Andy Corcoran, UK sales director, channel, Dell
- Mathias Grobet, managing partner, Velocity Business Design
- Chris James, marketing director, EMEA, Virtual Instruments
- Bob Plumridge, CTO and member of board of directors, SNIA Europe
- Nigel Tozer, solutions marketing director, EMEA, Commvault
Nicholas Maigne: The way to look at it is to understand that there are technology evolutions in flash that will change the economics and potentially make flash viable for backup and secondary storage. Now, the caveat is that the flash industry production capacity cannot today replace the entire HDD [hard disk drive] production capacity. SSD [solid-state drive] “bits” shipping this year represent about 10% of the total storage industry “bits” – so there is 90% room to grow for the industry. The industry needs to invest in flash production capacity.
Chris James: I’ve just got one caveat here that we see a lot of: that flash isn’t suitable for everyone, though there’s a general view that it is the panacea and it will cure everything. I’ll give you an example. There was a very large financial services company that went out to three flash vendors and said, ‘This is our application workload. You come up with your recommendation and we’ll test it in the lab.’ They had benchmarked their application on spinning disk and it ran at around 4ms response. Two suppliers came in at under 2ms, and one at 70ms – one supplier was way slower. It was just the way the finance company’s operating system was set up that wasn’t compatible with that supplier’s flash, and that’s with the supplier giving its optimum system.
James Hall: The last four or five Tier 1 organisations that released orders I’ve been involved with have been driven by TCO, not performance – it’s all space, power and cooling. For the size of those estates, and the numbers they were talking about, you didn’t even need to reduce the data. It’s still worked out over five years in cost savings to go from what they had to all-flash. But it has to be the right delta, and in a city like London where the cost of cooling is astronomically high.
Some of the smarter partners are going to customers and having the TCO conversation – they get engaged in understanding the landscape, understanding whether it’s oversubscribed and how efficient the customer is today, and then working out what it looks like from a flash perspective over five years and taking that business case to the back to the customer because it’s better to start flash without having to reduce the data because then anything the customer gains is a benefit and that’s always good.
Flash is not right for every workload. The precept is ‘all-flash is magic’ – it’s absolutely not.
Do you feel your channel partners are in the best position to face current market challenges?
Andy Corcoran: As vendors, we still have to spend more time encouraging resellers to invest in skills and to be able to have a conversation focused on the problem. So, making access to the certification and that kind of stuff is still a really important aspect of the programme we offer partners. The second thing we would do, that I see as being quite new, is the consumption models we provide through financing for the partners to take advance for their users. That is a very exciting part of the portfolio going forward because we are able to say to a partner, ‘You don’t have to adopt any of the risks in deploying some of the solutions. With the finance we can provide, you can take a sort of module position that you want to take a good chunk of the revenue for the first year and then we will decrease that payment that you operate with that customer and we won’t charge the user a note from capex [capital expenditure] to get on with the technology.’
And then say that if it turns out by the end of the year that it wasn’t the right thing for the user, then we can deploy something that will fit. That’s something I haven’t seen available before, and it probably gets it closer to the idea of the true utility model that is available. So we’re seeing an awful lot of interest in that – in that Cloud Flex solution we launched couple of months ago. So I think the channel has seen that as a huge help in being able to move in, particularly for the hyper-converged solutions that we were talking about.
Mathias Grobet: We work with some of the largest IT brands and help their partners transform. The partners must rethink their business models and make the transformation required to survive the next three to five years – how to become that trusted advisor. It’s about business model design and how you can transition for the next three or five years and rethink your model and become that trusted advisor, because that’s what users are looking for.
Nicholas Maigne: So we are in the process of deploying an enterprise channel programme in Europe, starting in the UK, then France and Germany. It’s really centred around helping the channel create value around some of those new platforms, including hyper-convergence.
Jerry Rijnbeek: At Rubrik, we are lucky to have been born three years ago, in an era where convergence, cloud, DevOps and ransomware were already on the agenda. We are challenging channel partners by saying, ‘This is going to happen, so go on this journey with us.’ We are guaranteeing a 100% business model through partners. In our first three months of existence in EMEA, we were doing partner web-based training and hiring channel managers. We have been completely focused on the channel and finding partners that want to take that next step.
Ezat Dayeh: We are relatively young and we are opening up a part of the market that is new to a lot of our partners, so it’s all about education and training and marketing. While they are new to hyper-converged secondary storage solutions being deployed, we’ll help them as much as possible, through joint marketing programmes, until they get up to speed and can carry on without our guidance. Also, for those partners who are looking to broaden their horizons and do that as-a-service piece, we have dedicated service provider programmes as well. That’s something they always want to hear about, and going to a customer it can help tie up quite nicely if they want to do DR as a service, for example.
James Hall: It’s about enablement and accreditation. Providing not just product information, but solutions that they can take to a customer that address a relevant use case. Creating financial mechanisms that enable partners to be creative themselves and take less risks themselves, and improving how internal processes work to make it easier to deal with HPE, so we’re going for a big programme at the back end. We want to provide one system that does everything. There’s a long way to go, but from a partner perspective it makes us a little faster and more reactive, and gets us into a much more proactive state. That’s the focus for the channel, as well as recruiting new partners. We want to move as much business as we can into the channel because partners deliver value and they can get to our customers.
Dan Chester: So we, too, understand channel focus, and we help our partners in a number of ways. First and foremost, we have had a conversation around hybrid, so for customers that are on a cloud journey, whether that’s driven from the top down, we enable our partners to go in and have a conversation around hybrid.
Especially around TCO, we provide tools and training on how to have that conversation and we also work with some of our partners who want to become service providers in their own right.
We have the ability to help service providers or resellers become service providers. We’ve seen that in a number of cases, people bringing out their own sets of services that they can then resell.
And we also offer consumption-based finance in that service provider model. We can also offer consumption pricing. And then finally enablements and accreditation as well, so we help our partners hold those conversations around the whole range of business and commercial issues and technical issues that affect their customers’ buying decisions and help them hold those conversations credibly.
Chris James: We have just set up a new reseller portal and are actively looking for boutique channel partners to work with across the whole EMEA region, if not the whole world. The channel needs to be looking at the entire infrastructure from an application-centric point of view as well. The business is looking down, and it’s not really interested in looking at the technology, it’s interested in how an application is running. So they need to be reporting back up to the business. If the channel can focus on the entire infrastructure performance and that message, then they will succeed.
Nigel Tozer: Commvault has a very mature channel programme, with different levels and options to support many types of partner, from traditional resellers, through to service providers and GSIs. We have mid-market products that are easy enough to set up, so they don’t need any help from Commvault, but for more complex enterprise needs we have a certification programme for partners to provide services, or they can resell Commvault professional services, plus our education services. Renewals are passed through partners, and our partners can even provide first-line support, so it’s really an end-to-end story.
Bob Plumridge: So from us, as I said from the beginning, vendor-neutral education and vendor-neutral certification. It’s something we have supplied for 15 years or so now, but increasing also the ability for people to get involved in standards development. We are finding more and more of these partners want to be involved with these standards and the development of this stuff.