VARs remain neutral about Q2 outlook

By Dave Simpson

—Robert W. Baird & Co. recently completed its quarterly assessment of the storage and server reseller channel, compiling survey results from 32 VARs representing about $8 billion in revenue. Overall, resellers are reporting modest expectations for Q2 revenue, with 47% of the VARs saying they're on plan for the quarter, while 31% are ahead of expectations and 25% are below expectations, suggesting a mixed IT spending environment.

Baird's surveys also query the channel regarding which vendors are "hot"—and which are not. On the storage front, Network Appliance scored highest, while Hewlett-Packard topped the charts on the server front. Also scoring high were VMware and Cisco. A number of vendors had net negative scores, including Dell, EMC, Hitachi, IBM, Sun, and Symantec.

About 90% of the survey respondents are currently selling server virtualization solutions, which was one of the fastest-growing technology segments. R.W. Baird analysts also note that growth in server virtualization will spur end-user storage spending.

Although the survey results suggest a mixed spending environment for server/storage products, the results also indicate that a number of cost savings technologies will drive overall revenue growth, including data de-duplication, virtualization, and iSCSI.

More than half (53%) of the VARs reported either "strong" or "moderate" demand for iSCSI. NetApp held a strong lead as the best-positioned iSCSI vendor, with HP and EqualLogic tied for second place. Also receiving mentions in the iSCSI race were vendors such as EMC, IBM, and LeftHand Networks.

Data de-duplication emerged as another hot technology, according to VARs. Nearly 60% of the resellers indicated either a "strong" or "moderate" ramp in data de-duplication sales, and another 38% of the respondents were actively evaluating various data de-duplication solutions. Data Domain was viewed as the top vendor (by 39% of the respondents) in the data de-duplication space, followed by NetApp (31% of the respondents). In another indicator of how hot data de-duplication is, Data Domain last week completed a successful IPO (see Data Domain IPO: Barometer for de-dupe?).

This article was originally published on July 02, 2007