March 22, 2005

Generally speaking, B2B companies in the mid-market are underserved when it comes to simple and affordable solutions that help them keep their online applications running smoothly.

Mid-market companies face the same IT issues as big companies, but they have smaller staffs, smaller budgets and often lack storage expertise. There is little margin for error, yet these companies struggle every day with diverse protocols and operating systems, multiple vendors and classes of storage.

Because vendors historically have focused on the enterprise space, big companies can choose from many different solutions at various price points. Medium-sized companies are forced to spend time and money to retrofit enterprise-class solutions, assemble a complex set of technologies from point tools, or avoid implementing a storage solution altogether by doing nothing. These approaches raise cost, increase risk, consume time and provide a limited view of operations.

Faced with this dilemma, many mid-market companies do nothing. They lose the flexibility to react confidently to changing requirements. They may not migrate to new technologies. They may lose ground to competitors. The overlooked opportunity in the mid-market is a software solution that provides a comprehensive view of storage, networks, hosts and applications with at-a-glance monitoring and reporting.

What is the mid-market? Companies that have:

*100-1000 employees
*IT budgets of $3-20 million
*Annual revenues of $50-500 million
*10-200 application servers

International Data Corp. counts 93,000 North American-based businesses with less than 999 employees, compared to 9,000 large companies with 1,000 or more employees. Talk about opportunity! In fact, IBM and HP are among several large vendors that have historically focused on the enterprise and who have recently announced offerings tailored specifically for the mid-market. The problem is that these vendors have not gone far enough to address the real needs of this unique space. Over the next year, the vendors who can truly help these companies simplify operations and lower TCO will be positioned to capture market share and customer loyalty.

Currently, network administrators at mid-sized companies must address several key business issues without the resources and expertise that larger organizations enjoy. These include:

1) Keep applications up and running. Think about e-mail and databases, two business-critical applications that often sit between a public Web site and disk or tape storage. If the applications go down or end users cannot access the data they need, service interruptions can cost thousands or millions of dollars in addition to the damage to customer relationships.

2) Assure backup success. The ability to monitor and report on backup success is vital to businesses for which data is everything. Yet the failure rate of backups is close to 15 percent. And worse, if backups fail, IT administrators usually have no way of quickly identifying what caused the problem in order to fix it. Since 9-11, disaster recovery and business continuance are top of mind and successful backups have become more critical for a variety of reasons.

3) Migrate to new technologies or expand services. Many mid-market companies would like to move to networked storage, but they stay with direct attached storage. Or, they want to add a branch office or remote facility that needs to share data with the primary facility, but they delay or forego expansion. Why? They are intimidated by the IT complexity involved. The risk of failure is high without a comprehensive tool to help them see the big picture. How can they go about it when they have no visibility and scarce resources?

Today, mid-market companies typically use these tools to oversee their applications and storage infrastructure:

A) Open source tools. Shareware may seem like a good deal, but all too often it turns into a hobby for someone who likes to tinker with code. More important, open source tools are unsupported, so companies are on their own to solve bugs or problems. The potential long-term hidden costs far outweigh the business benefits.

B) Vendor-specific tools. Vendor hardware usually comes with a management tool that generally permits management of its own device and possibly related devices, but not heterogeneous views. Plus, each tool, which may involve a long learning curve, probably resides on a specific server with its own interface. Imagine the frustration of IT administrators who have to use 10 or 12 tools to manage applications, networks and storage for an entire environment. Imagine the difficulty of providing solid metrics to support business decisions.

With retrofit solutions and point tools, mid-market companies do their best, blind to many critical pieces of information that could support better decision making. Some bring in local trusted advisor solution partners to help set up and configure new applications or devices, after which the IT administrators take over. As long as nothing goes wrong, this approach works fine. But things go wrong. Things change. Experts may be recalled at considerable expense.

Without a holistic view of the infrastructure, IT administrators cannot easily provision storage, troubleshoot backup issues, or conduct root-cause analysis with any confidence. Add revision cycles and various protocols to this mix, and "complex" doesn't begin to describe the situation.

Companies in the mid-market are highly motivated to reduce complexity because it creates uncertainty and drives up costs. They want to eliminate layers of training and administration. The simpler the storage management strategy, for example, the simpler it is for them to go to market faster and maintain their business agility in the face of changing market conditions. With limited staff and budgets, medium-sized companies are looking for solutions to help them accomplish more with less intervention and overhead. In other words, reduce TCO and you've got their attention.

The mid-market offers rich opportunities to vendors who can develop software solutions with three key features: the right visibility, right price tag and right delivery through solution partners. Start with a clean sheet of paper. Leverage industry standards. Come up with solutions to help mid-market companies level the playing field through a variety of products that allow them to be more competitive. Solve business issues - not storage issues or application issues or technology issues.

Opportunity abounds. Enter the B2B sector and be ready to compete.

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