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Disk Drive shortage affects partner business in India

Added on Feb 24, 2012 by Kartik Sharma

The acute shortage of disk drives due to Thailand floods and consequent price rise caused worry for vendors and their partners. However, the enterprise storage vendors are foreseeing new business opportunities by introducing alternatives to HDDs and leveraging technologies like Virtualization in this crisis situation.

The acute shortage of disk drives due to Thailand floods and consequent price rise caused worry for vendors and their partners. However, the enterprise storage vendors are foreseeing new business opportunities by introducing alternatives to HDDs and leveraging technologies like Virtualization in this crisis situation.

The storage vendors to the likes of EMC and NetApp in a bid to gain market share are keeping their loyal partner base updated on these new opportunities. Sanjay Lulla, Head, Global Services, EMC India & SAARC says, “We look at it as a good time for our business. There are some fantastic technologies in market like thin provisioning, de duplication, compression and virtualization where the customer can do more with the same number of hard disks.”

NetApp views the shortage as an opportunity for seller as well as buyer. Surajit Sen, Director- Channels, Marketing and Alliances, NetApp India says, “We can now help customers to achieve higher levels of storage utilizations. It is the best time to apply our innovations to let customers buy fewer disks in order to get more storage,” he adds.

More Expensive, Delayed Delivery

The channel partners on the other side are worried about factors like delays in delivery, ad- hoc price rise, deferred purchase orders etc. Neeraj Mediratta, Director at Ace Data says, “The biggest challenge we are facing is not with the price rise, because prices can be tweaked according to market demand. The real issue is that deliveries are impacted badly. The orders that were to be delivered in December have not yet been delivered.”

Praveen Dwarkanath, Co-Founder, MN World Enterprises says, “We are not affected much on price level. But the customer perception about the particular brand is under question.” For the customers who proposed storage order earlier but are buying post floods, price could be a serious roadblock as per him.

Debashish Dasgupta, Marketing Manager at Kolkata based Computer Exchange agrees, the biggest issue is that the prices have gone up abnormally apart from delayed delivery.

“There is some better availability as customers are accepting the new higher price level. We are now able to understand that we can sell at the higher prices also because demand is there,” says Gurpreet Singh, CEO, Arrow Technologies

Few months back there were phenomenal amount of delays as normal delivery of storage shipments of typical 4 weeks took six to eight weeks, says Dwarkanath.

The Alternative Technology

Lulla at EMC accepts the problem facing partners as he says, “The delivery has become the bigger issue now but whenever there is a big issue of this sort, there is always a blessing in disguise.”

The vendor has adopted a new approach in storage with enterprise flash drives. “We have increased the efficiency and removed the footprints of storage from customer’s datacenter. The flash drives and advanced tiered storage has helped to minimize the effect of the shortage of drives,” says Lulla at EMC.

However partners do not expect flash to be easy alternative solutions for HDDs in the marketplace. “Flash drive prices are expected to substantially come down as the demand goes up. But customers will continue to stay invested in the disk technologies they invested earlier in their technology roadmap,” says Sanjeev Khushu, Founder - CEO & Director of eMicro Data Technologies.

Alternatives to HDDs like SSDs are still very expensive and impose limitations in sizes. Dasgupta comments, “1TB or 2TB in SSDs is not available as yet. For storage requirements with multiple hard disks, deploying SSDs at the present price point will be an expensive proposition.”

We are closely working with the customers but, right now, we have not gone through any such particular case of replacing HDDs with the alternatives, says Singh at Arrow Technologies.

Prices of SSDs have to come down to replace the standard HDD market, comments Dasgupta.

End of Crisis?

The precarious situation of delivery would hamper financial results for storage partners. Mediratta at Ace Data says, “This year is projected to be crucial and we do a chunk of storage business. If this situation continues, it will largely impact our balance sheet by 20 to 30 percent for sure.” Computer Exchange expects the same as Dasgupta states, “There will be at least 20 percent of impact for a partner’s balance sheet. We have to wait at least till the next quarter to let the customers get attuned to hiked prices.”

Delhi based Arrow Technologies has realized not to remain only on the hardware side. “Such crisis like shortage of disk drives can occur any time. We have started generating businesses like building solutions and services around cloud too,” says Singh.

The exploding volumes of data undoubtedly makes storage as one of the most critical components of enterprise architecture. The current situation looks beyond anybody’s control though vendors and enterprise partners are mending their roadmaps to reduce the affect on their storage business.

 


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