When a company over $14B focuses on a market, even if this represents a smaller percentage of their total revenue such as 5% to 10% , that could represents nearly a $1B business. That can probably be said about EMC‘s Small-to-Medium (SMB) focus.
Over the years EMC has offered a number of products that are appealing to SMBs. These products can at times be targeted to its larger, more prevalent account base. So as SMB Research LLC spent 3 days last month attending EMC World, we attempted to soak in as much content that could be applied specifically to an IT audience within companies that have less than 1,000 employees. EMC positions some of its key SMB offerings in the area of storage consolidation as Clariion, Celerra, and Iomega. Other SMB offerings include Retrospect (backup and recovery), Mozy (online backup), and then partner products within the VMWare ecosystem.
In the emerging Cloud Market, EMC has secured clients with its Atmos offering. Atmos represents EMC’s cloud storage platform to enable content to be distributed globally. It offers web services to enable web-scale applications. EMC has a number of customers now that are utilizing this model to support the hosting needs of their clients. The price they can offer through EMC is a 15 cents per GB/month low cost footprint. One such company is Peer 1. Peer 1 has been offering hosting through the Atmos framework for the past 6 months. Previous clients have been using Amazon but Peer 1 does not find the support capabilities as significant as with EMC. Certainly having clients able to access large amounts of data for at low costs like less than $15 per month is an attractive offering for SMBs.
Founded in 1999, Peer 1 has several dozen clients in a number of verticals including High Tech, Retail, Dating, Social Media, Gaming and Entertainment, and Education. They heavily focus on the SMB market and some of their clients have since grown beyond this size classification. A few additional service providers using Atmos to sell to prospects and clients include Hosted Solutions and AT&T.
The SMB message is particularly apparent with cloud-type pricing options. As we attended a number of Cloud sessions at EMC Worlds, it was easy to see that much that can be of interest to this audience like the ability to rent GB space at low costs and not purchase as much hardware. However, SMB’s should not be fooled into believing that getting on the Cloud effectively is easy. There are a number of steps needed to ensure success from setting up the correct Use Case examples, ensuring security to paying close attention to the Service Level Agreement with the hosting provider. This can take monts. Some SMBs may need help from the vendor or a consultant with the planning as a great deal of strategy is needed to ensure success on the Cloud.
Certainly it was refreshing to hear new Chief Marketing Officer, Jeremy Burton, talk about the importance of SMB to EMC. In an analyst briefing he even referred to the different sizes within SMB using the “S” for the smallest, “M” for medium and “B” for the larger SMBs. Mr. Burton went on to state that the SMB market was untapped. Given his past background with companies like Symantec, Serena Software and Veritas Software that derive the vast majority of revenue from indirect channels, you can bet that he will be working closely with EMC channel executives to better leverage the channel to grow SMB customer base and revenue. Mr. Burton referred to EMC as being great at Account Management from a sales perspective. He would like the same to be said for Marketing at EMC. He will likely use his past background working at Oracle, known for its marketing clout and success, to accomplish marketing transformation at EMC.
Mr. Burton will have some recent EMC channel accomplishments to leverage in his new role. In CRN’s 2009 Annual Report Card its top marks among its Channel Partners for Storage Software and Network Storage (SAN or NAS) was extremely pervasive. EMC was ranked the top vendor for both of these categories and more specifically received top billing in ease of doing business (Storage Software), Managing Channel Conflict, Marketability, Marketing Support, Partner Portal (Storage Software) Presales Support , Quality and Reliability (Network Storage), Revenue and Profit Potential, ROI, and Services Opportunity (Storage Software). Now high channel partner ratings do not always translate directly to revenue but it certainly helps and the fact that Channel Partners rank EMC high for revenue and profit potential, indicates that the channel is doing well with EMC and that success transcends upward to EMC.
However, finding SMBs at the showroom pavilion or locating SMB specific EMC staff was a challenge. Of course part of this is that many of their products like Clariion could be used by both small and large companies so SMB doesn’t always stick out at you. Given the company does generate a lot of revenue from SMB, to help generate more, we believe that having more dedicated staff to SMB is essential. Hosting more SMB specific events will be needed as well to educate the end user that there products can be effectively utilized by small organizations. We hope Mr. Burton can try and make some of these changes to better position EMC’s offerings to SMBs.