Channel survey upbeat for Q4

By Dave Simpson

Last week, Thomas Weisel Partners (TWP) released results of its quarterly survey of the storage channel, and indications point to increased revenues in the fourth quarter. Here are some of the survey findings:

* 61% of the resellers report that sales are up more than 5% over the previous quarter. That compares to 40% in the last quarter. And a record 85% (versus 73% last quarter) of the respondents feel better about storage spending prospects over the next year. Reasons for the optimism include upcoming product refreshes, an improving economy, and increased end-user focus on disaster recovery.

In other positive news, a record 74% of the surveyed resellers have pipelines that are tracking ahead of the prior quarter.

* Somewhat surprisingly, VARs report that sales of disk arrays are going better than sales of storage software or SAN components such as host bus adapters (HBAs) and switches. Looking forward, however, VARs expect the spending to focus on software.

* In this reseller survey, TWP queried VARs specifically about iSCSI, and responses varied widely. Some resellers said they have already implemented iSCSI SANs, while others don't think that iSCSI will gain traction for another two to five years. And the majority of resellers think that iSCSI will change the storage landscape when 10Gbps Ethernet takes hold.

* TWP analysts also queried resellers about which vendors were gaining, or losing, mind-share in the channel. In software, Veritas and EMC increased their perceived momentum in the third quarter, while QLogic continued to gain mind-share in the HBA market. And in another surprise, resellers reported that Cisco lost mind-share while McData gained over the last quarter. When asked which vendor was gaining the most momentum in the switch market, 45% (vs. 38% in the last quarter) cited McData, while 25% (vs. 19% last quarter) cited Brocade and 20% chose Cisco. In the previous TWP survey, 35% of the resellers cited Cisco as having the most momentum.

The TWP survey results are based on in-depth interviews with 20 resellers/distributors in North America.

This article was originally published on October 25, 2004