Storage resellers cite channel conflicts as No. 1 challenge

Some things never change: Your cellphone battery runs out when needed, it rains on the family picnic and channel conflicts still bedevil storage resellers.

Complaints about those conflicts were the number one challenge listed by North American storage resellers according to a recent survey of

the industry by Gartner Inc., drawing a chuckle from the report’s author.

“”It was a little confounding and disappointing that channel conflicts remain even on the services side to be the number one issue,”” Adam Couture said in an interview this week.

“”With all the time vendors have had to resolve them from hardware sales, we’re still seeing them spilling over into services.””

These problems range from a vendor having several resellers close to each other fighting each other for business, to customers taking bids from integrators on products from EMC Corp. and then going to a Dell Computer Corp. Web site to see if they can get a better deal by ordering EMC products direct.

“”That’s giving them a lot of indigestion,”” Couture said the survey shows.

The report offers more evidence that storage vendors are focusing on software and services, despite the increasing demand for hardware, because equipment prices are plunging.

By 2005, Gartner figures, vendors will be shipping 4 petabytes of hard disk storage systems worldwide a year, more than twice as much as this year. But hardware revenues will remain flat during the same period.

To keep profitable, resellers and vendors have been pushing software and services. That’s good news for resellers, says Gartner, because the channel can also augment service sales.

Gartner’s survey bears that out. While 44 per cent of resellers polled said their hardware revenues increased in the past two years, 78 per cent said their services revenue had gone up in the same period.

While only 18 per cent of respondents said storage services accounts for more than 20 per cent of overall revenue today, more than half believe that in the future it will contribute to at least that much of their income.

The second biggest challenge storage resellers said they face is the lack of interoperability between hardware and software from various manufacturers. The high cost of vendor-demanded training was the third biggest problem.

“”We’re quite pissed off,”” agreed an Alberta reseller who asked not to be identified so his suppliers won’t get angry. “”We don’t get any business on the services side even though it cost us a lot of money to get certified.””

“”A customer wants the manufacturer to do the design and implementation, and I can understand that, but how do we get the experience to get in that space if they don’t bring us in. Yet we have to be certified to be able to sell the equipment.””

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Jim Love, Chief Content Officer, IT World Canada

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Howard Solomon
Howard Solomon
Currently a freelance writer. Former editor of ITWorldCanada.com and Computing Canada. An IT journalist since 1997, Howard has written for several of ITWC's sister publications, including ITBusiness.ca. Before arriving at ITWC he served as a staff reporter at the Calgary Herald and the Brampton (Ont.) Daily Times.

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