Is DVD In Your Future?
Strong growth, high margins, and value-add opportunities make DVD a profitable technology for VARs.
DVD continues to be a hot-selling storage technology. That's the word we get from four companies involved in the DVD market. Although the different DVD formats continue to cause some confusion among end users, that confusion has not slowed the adoption rate of the technology.
"We are seeing growth in all of our DVD products," said Jeff Ash, VP of marketing in the Computer Products Division of Fujifilm (Greenwood, SC). "There is still some work that needs to be done with standards, so the market remains a little challenging for resellers."
DVD arose from the Hollywood movie business and has managed to work its way into data storage applications, mainly because of its high capacity (4 to 9 gigabytes of data). "Because of graphics, e-mail, the Internet, digital photography, and audio and video, users need higher and higher capacity products," said Ash. "Corporate users keep finding new applications that are a great fit for DVD."
DVD-RAM Takes The Lead
Ash believes the DVD format currently getting the most attention is DVD-RAM. "Corporate users see DVD-RAM as a removable storage product," he said. "However, it is still the job of the VAR to determine if the technology is appropriate for the customer. When choosing a storage product for a customer, VARs need to know what the customer is trying to accomplish, how the data is going to be used, and whether there are cost, compatibility, or capacity issues." Answering these questions will help resellers determine if DVD is the best fit, or if the customer should look into another type of solution, such as tape.
Rich Gadomski, director of marketing for Maxell (Fair Lawn, NJ), agrees there has been strong channel demand for DVD-RAM in the data storage area. He believes the reasons are the error correction code (the error protection system used for DVD-RAM), as well as the random access feature and the ability of DVD-RAM to have a high number (100,000) of rewrites compared to other formats. "With pricing on hardware and media coming down significantly, we are seeing DVD-RAM as an attractive option for nearline storage," he said. "The broadcast industry has embraced the technology, but it is further reaching than that. Insurance, medical, and finance are all embracing the technology."
DVD-R Proves Reliable
Gadomski stated that DVD-R is another viable option for nearline storage. The write-once feature of DVD-R makes it a good solution for archiving as well. "The federal government has approved the use of DVD-R media for e-mail archiving, which has been a big issue ever since Iran-Contra," he said. "DVD is a perfect fit in the whole hierarchical storage management [HSM] scheme. When users are ready to migrate data from online storage devices, but are not yet ready to relegate that data to tape, DVD is a great nearline solution. VARs need to concentrate on the vertical markets where DVD-RAM and DVD-R are good nearline storage alternatives."
Mark Strobel, VP of sales and marketing at Primera Technology (Plymouth, MN), a DVD-duplication technology vendor, believes DVD will open up many new applications for VARs. "CD and CD-R have become commodities," he said, "but DVD is opening up new avenues for VARs, especially in video. Most corporations are using DVD for everything from training videos to product demonstrations to promotional videos."
However, in corporate America, you rarely make one DVD. Companies will typically make one master DVD and must then distribute the data. Unfortunately, Strobel believes an infrastructure to distribute that much data, video in particular, does not exist. "There is not enough broadband, and the broadband that does exist is not fast enough," said Strobel. "Companies wanting to distribute their video inevitably have to make copies."
Strobel believes storage and distribution of video is definitely the killer app for DVD. "Storing video on DVD can be complicated, so the value add for a VAR selling a DVD video production system is quite high," he said. "Because of that, the margins are very good at this point, and I think they will be for some time to come."
Opportunities Continue To Grow
Dave Suden, CTO for DVD-duplication vendor Rimage (Minneapolis), agrees that distribution of video presents an opportunity for VARs. "In the landscape of digital content, there are three main applications: creation, storage, and distribution," he said. "While there are many solutions for creation and storage, the distribution application has been largely ignored."
Suden sees demand for recordable DVD applications growing in several areas, including corporate video, video production/dailies, information and/or video archiving, photographic slide shows, corporate presentations, and medical imaging. "Any VAR who is engaged in those markets should be looking very seriously at the opportunities for DVD distribution solutions," he said.
Suden believes VARs can build a business with a strong focus in these areas, or they can augment their involvement with creation and storage products by offering DVD publishing and distribution solutions. "In the world of digital content, paper and microfilm are obsolete," said Suden. "Tape and MO [magneto-optical] are inflexible, not cost-effective, and also not compatible with desktop or conference room systems. DVD is rapidly emerging as the distribution medium for digital content, and selling solutions that produce DVD-based content on demand is a compelling new opportunity for VARs who have traditionally focused on storage and creation."