Fast-moving markets produce changes that ripple across industries and sales channels. As phenomena such as Pokémon Go demonstrated, viral content has the potential to scale so rapidly that customers can change faster than infrastructure. This puts tremendous pressure on IT teams and business leaders to react quickly to market changes and to exhaustively prepare for all contingencies. And that’s where enterprise storage enters the picture.
“As digital transformation disrupts businesses across all industries, many companies are asking themselves, where can we invest in IT to assure we’re flexible, responsive, and competitive? Which IT investments will bring the best ROI and position us for the future? Increasingly, a common answer to those questions is hyper-converged infrastructure,” says Lee Caswell, vice president of products, storage, and availability for VMware.
Hyper-converged infrastructure (HCI) is the fastest-growing category of enterprise storage because it delivers superior performance and agility by closely integrating compute, storage, networking, and virtualization functions in order to maximize performance. As HCI moves toward mainstream adoption, it’s affecting not only the enterprise but the sales channel, too.
While businesses increasingly move to HCI for their storage needs, traditional enterprise storage is becoming a shrinking market trending toward marginalization. For decades, though, selling storage has delivered solid margins for resellers. Today’s resellers understand that they’re losing potential customers if they’re not selling HCI, but how should resellers shift traditional resources and strategies to stay competitive within a dynamic market?
Shorter Sales Cycles, Better Relationships
For many years, large businesses have met storage needs by making big-ticket IT purchases that were managed by five-year planning cycles. For resellers, sales lead times were long and complex but profitable. With HCI, the sales cycles are much shorter, and the profitability opportunity is equally compelling.
Today’s customers need flexibility and responsiveness. Firms want to buy infrastructure in bite-sized chunks, not large, infrequent purchases. In order to remain competitive, firms need to reconfigure on the fly and to do it all with IT generalists, not specialists. HCI meets these demands.
“We’re seeing that forty percent of our HCI sales are repeat customers,” says Caswell, “and that customers are buying more with repeat orders. That’s because they’re initially trying out HCI on non-critical loads. Once they experience the benefits firsthand, they come back to buy more for their mission-critical applications.”
The less you know about traditional storage, the better.
Lee Caswell, Vice President, Products, Storage, & Availability
By compressing long sales cycles, resellers interact with customers more frequently. These shorter sales cycles offer more opportunities to build long-standing customer relationships.
“We did a customer survey and found that—for the first time ever—a clear majority of our customers are running business-critical operations on HCI,” says Caswell. “As HCI goes mainstream, resellers can make money on data protection add-ons and professional services tied to hyper-converged infrastructure value.”
Better Value, Lower Overhead
Once an organization deploys HCI, support costs go down and performance goes up. Hyper-converged storage is far more flexible for changing business demands because HCI components can be added quickly and easily. Additionally, firms no longer need a storage specialist on staff to manage HCI—an IT generalist will do.
“It’s like the all-in-one printer. At one time a small business owner had to buy a printer, a scanner, and a fax machine. Eventually, that became one device,” explains Caswell. “HCI is similar. It leverages emerging technologies and synthesizes functions in order to deliver simpler management and improved performance.”
This evolution carries over to the sales channel, too. Resellers no longer need dedicated staff to understand, explain, and sell complex storage systems to enterprise customers. One of the many benefits of HCI is its relative simplicity. “The less you know about traditional storage,” says Caswell, “the better.”
New Ways to Profit from Server Expertise
Commodity hardware has become powerful enough that, for many businesses, it’s no longer necessary to buy specialized hardware. For resellers, the value has moved to software, and now there are emerging opportunities in simplifying storage management, data protection, and ancillary services.
“There is fear in the channel because selling servers has historically been a low-margin business,” says Caswell. “But HCI opens up a new profitability model where enterprise storage margins are blended with server margins tied to a faster sales cycle than traditional enterprise storage and an easier support model. Change is inevitable. One door shuts, another opens.”