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Small Is Beautiful: Page 3 of 4

The advent of SMB storage networking is also affecting how products are sold. Given paper-thin margins at the low end of the market, vendors need to sell storage to SMBs by the truckload to earn a crust – a volume game not everyone's up to playing.

Of course, if you're Hewlett-Packard Co. (NYSE: HPQ), you know about shipping volumes of PCs and printers. Even IBM knows a bit about that market. EMC Corp. (NYSE: EMC), on the other hand, was a confessedly high-end kinda company and eventually realized that, if it were ever to exploit the Clariion business to its full potential, it would need help. So it went to Dell Computer Corp. (Nasdaq: DELL).

Indeed, don't we all? I'm writing this article on a machine I bought over the phone from them last Christmas, and these days the SMB market for direct-attached storage is much like that. As one of the interviewees for this month's report put it, "The tendency is increasingly to just pick up the phone and call Dell." Dell is, in essence, a big, efficient sales machine that assembles some things and OEMs others, a model that's worked well in the low-end computing world, where storage is turning up.

Now, EMC's not actually giving Dell the responsibility for marketing all the products it wants to sell into the SMB space – just somewhere between half (for the AX100 box) and a third (for the rest of the Clariion line). What EMC does want to do, though, is learn from the master about how to sell to SMBs.

A visit to Dell's Website demonstrates the state of the art: It's all old prices crossed through and new, lower ones in larger red letters alongside, with splashes saying things like "For a few more days only!"