Users' Data Storage Requirements Creating Sales Opportunities For VARs
As end users continue to generate more data, they are adopting storage technologies such as digital linear tape (DLT) drives and libraries in record numbers.
Storage technology VARs can capitalize on end-user requirements to store and manage greater amounts of electronic information by selling DLT tape cartridges, according to two industry observers.
Some large, corporate end users are doubling the amount of data they generate on an annual basis, according to Steve Whitner, director of marketing for Advanced Digital Information Corporation (ADIC). (This is partially due to the increased use of databases and communication via e-mail and the Internet). Many of these users are adopting DLT tape technology and automated tape libraries in order to meet their increased data storage requirements. DLT is used for the storage and archiving of data.
A 200-employee company, ADIC (Redmond, WA) manufactures automated data storage products that file and archive electronic data. For the six months ended April 30, ADIC's net sales rose 13% to $47.7 million.
As users increasingly opt for DLT, they are abandoning other technologies such as 4 mm digital audio tapes (DAT) and 8 mm-drive technology, Whitner says.
DLT offers advantages over those technologies, Whitner says. Among them are higher data storage capacities, higher data throughput rates, and greater reliability.
Opportunities For Resellers
Whitner sees the trend of users creating and managing more data as a positive one for storage technology resellers. "As users generate more data, they often add additional servers, or more disk capacity to existing servers," Whitner adds. "However, some end users may not know that DLT tape libraries can help meet their storage needs. Resellers should see the potential for sales opportunities when users add more disk space or servers."
An Alternative To DLT?
Currently, Quantum (Milpitas, CA) is the sole manufacturer of DLT tape cartridges and drives, according to Whitner. However, Bob Martell, president and CEO of Breece Hill Technologies, says storage VARs may see an alternative to DLT in the next year and a half. Breece Hill (Boulder, CO) is a manufacturer of tape libraries for backup applications. The company is projecting 1998 gross annual sales of $60 million.
According to Martell, several companies are in the process of developing a half-inch tape storage technology that would compete with DLT. Any new products will have a difficult time easing the stranglehold that DLT has on the market, Martell says. For example, he estimates that when an alternative product is released, there will already be 12 million DLT tape cartridges in use.
VAR Action Points
According to Martell, many storage resellers don't service their customers' tape storage systems. Rather, many resellers outsource service to third-party providers. Martell acknowledges that offering service requires VARs to make significant investments in personnel. "Larger VARs should have enough working capital to establish service departments," Martell concludes. "However, the margins that VARs can earn from service justifies the up-front investment."