HDS looks to move up the storage food chain

14.12.2005
Despite taking some market share from EMC Corp. this past quarter, Hitachi Data Systems Inc. remains in fifth place for external and internal disk storage sales, behind EMC, Hewlett-Packard Co., IBM and Dell Inc. Dave Roberson, president and chief operating officer of HDS, spoke with Computerworld Monday about how virtualization and tiered storage has been instrumental in grabbing market share. He also acknowledged that his company's go-to-market strategy needs an adrenaline boost, with lower-end systems and better reseller partnerships being key to moving up the food chain.

Why aren't you grabbing more market share? Well, let's look at where the market share is being gained. We're gaining a lot in what's traditionally been called the enterprise, which has three main players: IBM, EMC and us. Dell is primarily gaining its share in the small-to-medium-business market. We've been preparing and building our capabilities, but that's where we've not been as strong as we have been in the enterprise. Our enterprise share is in the 40% range, depending on what set of figures you look at, whereas the small-to-medium-business market [share] ... is more in the high single digits. So we're investing in building our channel capabilities, and we're investing in our new products and looking at a lot of things to gain share in that market. I'd hope we'd be making some announcements early next year.

What technologies are you planning to use to break into the SMB market? Actually, I don't think this is a technology driver. This is more of a go-to-market issue. I think we have the technology. We already have the Serial ATA drives. We can do iSCSI. Part of it is price points, the ability to be aggressive in market with a price point. In this market, it's typically about half the price of the enterprise, give or take. We can meet that price point, but sometimes there's an advantage to having a lower price when going to market. The other key driver in this market is people are a lot of times not looking for a storage-only buy. So one of the reasons you see Dell doing so well is that they're selling a turnkey solution with the [storage-area network], with the server, with the storage and everything.

Are you seeking out partnerships to help you increase your market share? Yes.

When and with whom do you expect to finalize a partnership? You'll see something from us in the next six months, but don't necessarily expect to see another server partner. There are other ways to get to that market than through servers, and I'll just leave it at that.

So the obvious follow-up question is, are we talking about a pure reseller partnership? That would be the obvious other choice. We are looking at how we can expand our presence in that market and looking at who's available on the reseller side, who they're aligned with and how we can add value on their side and ours to bring some unique value propositions to the market. We're really looking at who we can partner with who's not aligned or who is neutral enough, because we really need to be in the first position with someone -- but someone who's large enough to make a difference.