Compaq Moves Towards Storage Success
An interview with VP of enterprise storage software business,
Mark Lewis
By Chris Bucholtz, VARBusiness
5:47 PM EST Fri., Feb. 09, 2001
When Mark Lewis was promoted from vice president of
Compaq's Enterprise Storage Software Business to vice
president and general manager of the Enterprise Storage
Group, he took charge of an increasingly important
component of Compaq's product line. Lewis, who holds
eight patents in various areas of storage technology,
shared with VARBusiness his views on where Compaq
stands and what it has to do to succeed in the crowded
and cutthroat storage business.
VARBusiness: How big a stretch will this new position be
for you? Will you have to alter your thinking to include
both hardware and software?
Lewis: I started up the storage software group for
Compaq, and I've grown that for the past two years. This
is obviously a new role and a little different, but storage is
no different to me. It's a hot area right now, and even in
the economic downturn, storage is going to be one of
those areas where investments are going to maintain
pretty well.
VB: You're in one of those interesting situations where,
even if Compaq's sales increase dramatically, you could still be seen as not doing a good
job because the entire pie is getting bigger so quickly. In other words, Compaq's slice could
become much bigger, but the market share could decrease.
Lewis: That's a great question, because we saw that reflected in IDC's recent numbers on
the storage market. We have an existing business, and there was an overall decrease when
you look at it one way. What we didn't like about the IDC numbers is that they didn't talk
about enterprise storage. We're doing something to ourselves--we're cannibalizing our own
direct-attached storage market, which has been a big base for us. If you look at enterprise
storage and compare apples to apples--what we sell in the enterprise vs. what EMC
sells--what you actually find is that we grew as fast, if not faster ,than even EMC and gained
a lot of share in the enterprise storage space. It was an interesting way IDC did the numbers,
because they counted individual disk drives as enterprise story. We didn't necessarily agree
with that. We doubled our storage capacity, and yet it shows us really losing market share.
VB: It's a difficult market to quantify unless you really get granular and see what type of
storage is being sold into what spaces. NAS and SANs do cut into attached storage sales,
and not to the detriment of the customer.
Lewis: No, not at all! And we have a bigger existing market to cannibalize. That's one of the
reasons we said in our Q4 earnings announcement that enterprise storage grew 50 percent
year over year. All of storage grew 17 percent. Both are good numbers, but we knew storage
would grow a lot less because a lot of what we're doing is moving our own direct attached
customers to enterprise storage. In that report, one of the interesting things they didn't
point out was that Compaq shipped more storage than EMC and Sun combined. We
shipped between 70 and 80 pedabytes. That was more than the next two combined.
VB: A lot of time, people get hung up on high-end storage, but in reality resellers are
starting to work into smaller companies--they're focusing not on tiny businesses, but
businesses that aren't Fortune 1000 companies that may not have the need or the desire for
a high-end storage system.
Lewis: SANs are going to take a lot of the market. We have a strong NAS offering,
independent of our SANs for smaller and medium businesses. A lot of media companies
who have different geographic locations who want to have file servers at those locations
love the small NAS products. And then we can combine the two, where we use the NAS as
the front-end for the SAN for the bigger companies who need some NAS and even some
attached business to go along with it. The mix--with one common management, one common
disk drive, one common hardware--we think is quite powerful as a portfolio.
When you think about some of the NAS companies, NAS is important, but it's hard to sell
NAS as the complete storage solution, because it's not. It fulfills a need for a subset, but
you have to have a whole portfolio to really address the market.
VB: With so many companies realizing how valuable storage is in terms of leveraging the
rest of their product lines, how do you set about differentiating Compaq's offerings from
other companies' offerings?
Lewis: From a product standpoint, we think we are there. We have built a no-compromise
product, which means you can have all the features and functionality that would exist in
anyone's enterprise-class product today--data replication, snapshots and all the advanced
software. We've done it with a modern architecture that's very up to date. We've done it in a
very price-performance aware way. Even the market growth we're seeing says we're doing
great. We're essentially doing everything the high-end folks are doing for half the money.
Now, we're spending time talking to people, because when you get into the general
populace of the IT folks, they think of EMC and then they think of what I would call "et al."
Compaq, HP and the rest all get grouped into the et al. It's not et al at all if you really break
down the storage market. There's EMC and Compaq positioned in most markets in a
leadership position, and then lower down there's a pack of folks. What we need to do is
distinguish our storage business from all of the other server suppliers.
VB: How are you making that case to the VAR community? They're looking for an
interesting set of qualities in the vendors they buy from. Some of them are intangibles that,
no matter how much engineering goes into the product, another part of the business has to
deliver in order for those VARs to be spurred to use those products.
Lewis: That's huge for us. While we've built a strong specialty sales force--we have over
650 people worldwide in just the storage specialty sales force--we remain very committed to
our partners in the VAR community to build complete solutions. One of the things that's
helping us is that many of those very high-end oriented enterprise vendors have a very, "I
go direct and direct only" approach, or "love affairs" with the channel where they're in then
out. We've been very consistent in our approach. We have moved up the value chain in
building better enterprise solutions, but we've kept the VARs really involved in the sales.
We say it's the customer who gets to choose how they buy from us, not Compaq. We look
at that as our strength against an EMC. We may not have the number of sales folks they
have, but we view our VAR partners as a strength in attaching to more of the addressable
market, in going to market with more complete solutions. We're even looking at service
providers as VARs themselves, providing an added value. The great thing with SANs and
NAS is that there is more up-front consulting and configuration work. While we think SANs
will save lots of money in operational costs, they're more complex. They require more of the
kind of thing we want VARs to partner with us to do.
VB: Is consistency in the channel programs one of the keys to winning resellers over?
Lewis: It is. Even a few years ago, I would have looked at the likes of EMC and said, 'oh,
we've just got to go direct!' Sometimes you get envious of a model and think, well, that's
how to do it. Instead, we think we have more strengths, but we have to capitalize on all our
strengths. We've been consistent in the past, and instead of saying, 'we're going to move
the model,' we're going to sell the model we have. We'll take the costs out where we need to,
make sure the supply chain is in position, and optimize our model. We believe the impact of
that is huge, because VARs, resellers and distributors see Compaq as a stable player, are
very engaged with us, understand that we know how to partner, understand that we will
give credit for where value is added. And that's been great for us. So we don't think you
necessarily need to play only by our own rules.
VB: Could you give us an idea of Compaq's roadmap for the near future?
Lewis: Sure. We share our roadmap literally on the Web. We think that our customers,
when they're investing with us in storage, it is a partnership that is ongoing, so we have to
tell them what we're doing. We'll tell you everything that we can talk about beyond product
specifics. We'll never tell you embargoed stuff.
Every product we're shipping will be new within 12 months. We're doing a major new
generation of products focused on SANs, but including management capabilities,
extensions for direct attached and appliances for network attached, and we'll keep evolving
those. We'll keep evolving our SAN strategy to what we call the open SAN, which is real
any-to-any connectivity, a true Storage Area Network that has heterogeneous connectivity.
The major thing we'll be introducing in the fourth quarter of this year, and have released as a
technology already, is called Versastore, which is our SAN storage virtualization schema.
That software will take all storage in a SAN--be it based around Compaq, EMC or other folks
storage--and virtualize that and create a single pool of storage resources. That's going to be
huge for us. It's what's going to make SANs and network storage worthwhile to customers.
There are benefits today, but it's a little like a power utility. We have one power utility and
you have one power grid being built by all these companies, but we really don't share
power. We don't re-distribute power. One server gets its storage from one or two storage
systems. It's networked but it's not sharing. This virtualization scheme will allow all these
resources to be truly shared. We think it will be as significant as when RAID first happened.
VB: Virtualization moves the key component of the solution from the device itself to the
software, the management of all the devices. What kind of expertise can you leverage to do
this, and are there any partners you're going to work with?
Lewis: There are a lot of new players. The interesting thing for us is that we figured this out
years ago, so we have been for the last several years siphoning off a significant part of our
R&D funds to this program called VersaStor, obviously years before we announced it. So
we built a very strong internal base. But we decided we wanted to deliver this with partners,
so we have an endorsement on compatibility and an agreement for compatibility for the
technology with IBM. We've announced partnerships with nine major companies in the
fibre channel space that are going to help deliver VersaStor agents and technology. Those
are companies like the major host bus adapter companies like Emulex, Q-logic; Store-age,
which is a storage virtualization company. We have agreements with Brocade and McData
around virtualization within the SAN fabric. We're building the right partner base for it.
We're doing SAN virtualization using SAN appliances that are literally within the SAN, so
it's a technology that's very powerful but we do want to have some good partners as we
bring it out to market. |
