Saturday, May 15, 2010

Storage after the financial panic





During the EMC show in Boston several folks stopped by our booth to discuss business, and wanted to know my thoughts on how the year of 2010 was going to turn out. Some of the conversations lasted a couple of days when we had time between events with friends. I assured everyone that asked my opinion that I am not much of a forecaster, but I was willing to discuss the trends that our business is experiencing.


Our NetApp support business is strong and it is growing, our new customers tell us that they are looking to extend the life of their hardware, and add storage to their existing systems. Zerowait has a great reputation for reliable and affordable service and support and so they are comfortable relying on us while they consider their primary storage options. For customers migrating toward EMC equipment we help them with parts replacement while they migrate and then we can purchase their equipment when they have completed their migration. Our solution helps managers struggling with tightened budgets solve their capacity requirements.


According to Gene Sperling in the Wall Street Journal -page B6 5/13/10 " The squeeze on small business credit " has been and remains a serious economic challenge""


Andrew Schwedel and Karen Harris wrote on page A17 5/14/10 " For managers, the end of the easy-money era means a fundamental rethinking of how to finance investment.funding projects from internal cash flow will be more reliable but may constrain growth and will certainly favor businesses with ample cash and strong balance sheets."


These statements confirm my understanding of why our third party support business is growing. Many customers can't get credit to purchase new equipment. Because of this situation storage managers are rationally choosing to extend the life of their current assets while supporting them out of their operational budgets. As Schwedel and Harris say later in their article "Companies must also figure out how to keep driving down costs".


Maintaining and optimizing already owned storage assets is an easy way to reduce a company's IT costs while still maintaining the high availability storage they require. At EMC world it seemed that everyone agreed that business has gotten harder in the last couple of years, and it may be quite a while before storage budgets increase substantially.


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