A June survey of storage VARs’ views of the market shows growing demand with core infrastructure refreshes as the US economy re-opens and ransomware becomes a top-of-mind concern.
William Blair analyst Jason Ader produces a quarterly VAR Enterprise Tracker. It is worth paying attention to because of the light it casts on the storage market generally and on five suppliers — Commvault, NetApp, Nutanix, Pure Storage and VMware — in particular.
Ader’s second quarterly edition, surveying 115 VARs, tells his subscribers: “Interest in Commvault’s tech continues to be buoyed by prominent ransomware attacks, with VARs also noting a newfound energy in the organisation. NetApp is seeing strong win rates as more customers appreciate the firm’s revamped solutions set, especially around cloud services.”
HIs summing up of the general market explains: “Our June-quarter survey of 115 VARs revealed a strengthening demand environment, with economic reopening causing many customers to come out of their shells. Top areas of spending in the quarter included cloud, security, and wireless. VARs are also seeing a pickup in core infrastructure refreshes as pent-up demand is activated. From a vertical perspective, financials, healthcare, manufacturing, and SLED saw strong momentum, while federal remained soft (though VARs expect the fiscal-year-ending September quarter to be much stronger).”
Ader observed that just under half the VARs saw five per cent or better year-over-year growth — the highest in three years. More than four-fifths of them had growing sales pipelines, and 74 per cent think the sales environment is improving — the highest proportion since 2014.
The surveyed VARs said Commvault has regained its mojo and is executing well, with ransomware protection a key concern. “This is making it easier for Commvault and data protection competitors like Cohesity, Druva, Rubrik, and Veeam to get in front of customers and promote their ability to perform immutable backups, air-gapping, and rapid recovery”
Ransomware-driven data protection is like a rising tide that lifts all boats, eg. Cohesity, Commvault, Dell, Rubrik, Veeam and Veritas. VARs said SaaS and IaaS data protection is another major concern, and this benefits Commvault’s Metallic offering.
NetApp’s hybrid cloud story is playing well in the market, with one VAR saying NetApp’s offering is “light years ahead of competitors.” Ader writes “NetApp is successfully reinventing itself and aligning well with high-growth areas in the storage market like cloud services and all-flash arrays (AFAs) — not to mention its growing exposure to areas outside storage like Spot for cloud computing optimisation.”
Some VARs saw “double-digit year-over-year growth” in their NetApp business, while others said “NetApp’s [AFA] technology is now generally on par with that of AFA technology leader Pure Storage.”
According to Ader’s survey, “VARs had generally positive feedback on Nutanix’s momentum in the market, praising the company’s expanding product set, increased channel engagement, and new pricing/packaging efforts. That said, a few VARs noted elevated sales rep turnover, and one of Nutanix’s top partners has seen demand quiet down for Nutanix’s solutions over the last few months.”
Hyper-converged infrastructure is a two-horse race between Dell/VMware and Nutanix. “Some VARs think the pendulum is swinging back toward Nutanix though, with Nutanix winning more head-to-head deals against Dell.”
“Pure VARs highlighted strong demand in the quarter for the firm’s Pure-as-a-Service subscription model, where the customer rents the array from Pure and pays a monthly fee. We heard of multiple seven-figure wins for PaaS in the quarter, and multiple VARs told us that the vast majority of their Pure conversations today are centred on PaaS.
There was positive feedback on the Portworx and Cloud Block Store offerings, with an upsurge in Portworx deals. Pure has initiated a marketing effort around ransomware protection, with Cohesity-powered FlashRecover being the main product due to its near-instant restore.
The surveyed VARs “indicated that while Pure’s Evergreen maintenance model disrupted the market when first introduced several years, competitors such as Dell and HPE now have similar offerings. That said, VARs generally still believe that the Evergreen program is superior.”
According to the survey: “Given the recent executive turnover (including the departure of longtime CEO Pat Gelsinger), the pending spinoff from Dell, and the multiple market transitions the company is navigating (VMs to containers, on-premises to cloud, etc.), several VARs told us that they believe VMware has lost its mojo. That said, VMware continues to be a highly relevant vendor in the hybrid cloud journey for most enterprises, and we continued to hear of good wins and deal activity in the quarter.”
There is growing traction for VMware Cloud on AWS, but mixed feedback on Tanzu. This is VMware’s Kubernetes and container-focused portfolio of products, with some seeing it as a complex, expensive offering that still needs time to mature.
Ader pointed out this nugget: “VARs indicated light activity with vSAN deals in the June quarter, with some attributing this to VMware de-prioritising the product by eliminating the dedicated vSAN sales team.”
Ader also noted: “Dell PowerStore is still not yet seeing the traction that the company has hoped for — despite Dell sales reps strongly promoting the product.” This file and block array product is facing strong competition in what is probably the most hotly-contested area of the on-premises storage market. Dell is trying to beat HPE, NetApp, Pure Storage, VAST Data and others such as StorONE, Silk, etc, and Huawei outside the USA.