Channel Innovator: Mass Storage Winner
TOpen Systems Technologies increased revenue by more than $5 million in one year by developing storage consulting practices.
VARs in the storage industry often focus too much on hardware sales and overlook more lucrative opportunities that frequently exist on the service side of storage. Not Open Systems Technologies (OST). This VAR has grown its business significantly by leading with storage consulting services.
The interesting thing here is that storage isn’t even OST’s core competency. Founded in 1997, OST built its business around delivering high-availability, performance, and systems architecture services. The VAR is seasoned at implementing clustering services, integrating servers from many different platforms, including MCServiceGuard, HACMP, Oracle FailSafe, and Veritas Cluster Server. Performing these types of clustering and consolidation services to increase the performance and availability of IT infrastructures helped familiarize OST with many large data center environments. While working in these environments, OST recognized an underlying problem with many of its clients’ storage configurations.
“The storage industry is characterized by complexity, and many of our end users faced compatibility, utilization, and change management challenges when it came to their storage environments,” says Jim VanderMey, VP of tactical operations for OST. “That complexity was a paralyzing factor for these companies when it came to implementing new technologies. We felt we could provide customers with great value by applying the best practices we learned for high-availability and performance to our clients’ existing storage infrastructures on a presales or consultative basis.”
For example, if a company has invested $10 million in storage and its utilization rate is only 25%, then it has effectively wasted $7.5 million of that investment. While no one would want to run at 100% utilization, that company could gain a huge economic advantage if its utilization rate could be increased from 25% to 60% through better data classification, management, and provisioning models and no additional investment in infrastructure.
Build Credibility By Leading With Storage Services
With this goal in mind, OST spent a year researching storage technologies, gaining necessary platform certifications, and interviewing end users to identify the storage pain points they frequently encountered. Through these interviews, OST established several storage consulting practices within its organization, covering areas such as complex SAN (storage area network) design, infrastructure rationalization, storage consolidation, SRM (storage resource management), and ILM (information lifecycle management) and compliance. OST believes leading with these consultation services is the key to its success.
“The storage industry is full of product-centric VARs that try to sell clients a new technology to solve their problems,” says Dan Behm, president of OST. “Not only is this not always necessary, but adding a product can actually make a customer’s storage infrastructure more complicated. We felt helping customers optimize their existing infrastructures would allow us to build close customer relationships and help us gain credibility when we do suggest an infrastructure addition.”
This approach has paid off for OST. The company increased revenue 94% — from $5.4 million in 2003 to $10.5 million in 2004 — as a direct result of its storage consultation services. These consultation services contributed to another 29% revenue increase in 2005. OST believes one of the main reasons it has been so successful at landing large service accounts is its high-availability background with multiple technology platforms.
“Most large companies have different types of storage devices in their infrastructures,” says Behm. “For example, we recently worked with a company whose storage environment was made up of Hitachi Data Systems, IBM, and HP storage devices. We stand out amongst our competitors because we have worked with each of those architectures as a result of our high-availability background. That particular customer looked at a number of different solutions, but we were the only one that could come in and understand their entire environment.”