HP makes it clear it is competing in this segment primarily on price. When it announced the MSA, it declared intentions to undercut Dell Computer Corp. (Nasdaq: DELL) and IBM Corp. (NYSE: IBM) on EMC/Dell Clariion and IBM FasT low-end SAN gear for the SMB market.
HP's chances of success with SMBs seems good, given its solid position in the Fibre Channel and iSCSI SAN markets, where IDC ranked them the 2003 market leader. In the Heavy Reading Fall 2003 Storage Networking Market Perception Study, HP ranked third in SAN name recognition, behind EMC Corp. (NYSE: EMC) and IBM.
Competition is building, however, and it's not clear how long HP can compete on price alone. A growing number of vendors have targeted the SMB SAN space, including well-backed newcomers like Sanrad, which claims over 100 customers have bought its V-Switch technology for linking servers with a range of storage devices. HP, with its emphasis on its own hardware and those of its partners, may get a run for its money from vendors with wider support.
Still, HP ProLiant servers are prolific -- HP claims to have sold 8 million of them -- and server sales are strongly tied to storage sales from the same vendor. Every time we go into a business, we find a ProLiant somewhere, Schultz crows.
HP says $21 billion of its total revenue came from SMBs last year. That includes more PCs and printers than storage systems, but the numbers could shift this year.
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