IBM Continues To Expand Midrange Storage: Page 2 of 2

So why is IBM's new DS3500 Express relevant to the larger market? The midrange market is a battleground for large IT vendors, as well as storage specialists that live or die in that space. Competition in the mid-market is heating up among vendors of every sort, but opportunities are finite and the number of vendors who want them is large. Moreover, mid-market success tends to require an indirect sales strategy, using partners rather than direct sales forces, and its customers have greater cost sensitivity compared to larger organizations.

IBM has strong indirect sales channels, and the use of the word Express in conjunction with DS3500 Express is related to the bundling the solutions for the channel. This announcement demonstrates how IBM is trying to supply its channel with the hardware and software they need to compete, such as the price for the TPC for Disk MRE as compared to the enterprise version of the software.

Now, customers do not like to be pigeonholed and do not necessarily follow vendors' market segmentation. For example, enterprise customers have long used midrange storage for applications for which those solutions were good enough. In IBM's situation, some customers may want the TPC for Disk MRE due to its low price and find the DS3500 Express good enough. Although that might cannibalize some sales of higher-priced storage, IBM is likely to consider it better to cannibalize itself rather than have someone else do the job.

After all, it all gets back to the topsy-turvy Alice in Wonderland world of IT where deflation in prices or continuing to get escalating technology features for the same price is considered a good thing in contrast to what economists worry about if deflation occurred in the broader economic world. IBM, along with all of its competitors, are betting that what is good for its customers in terms of price/performance is also good for their own bottom lines. IBM has had good storage numbers lately and with its strong channel, its new DS3500 Express, combined with TPC for Disk MRE, would seem to be in a good position to succeed.  Disclosure: At the time that this story was published, David Hill of the Mesabi Group is doing business with IBM.