Blade Servers Gaining Traction In Small Business
"The product [c3000] is fairly new, but we've sold a couple of dozen, which is 100 or so odd servers," said Brady Flaherty, a principal in Altos Technology Group, a Sacramento, Calif.-based solution provider. "The reason they are selling so well is that they don't have the power requirements that the other blades do. They use normal three-prong that goes right into the wall."
Flaherty explains that blade systems that use standard power represent a breakthrough in cracking the SMB market. "If you didn't have a data center, the first c-Class chassis wouldn't work because you need three-phase power," he said. "The form factor dictates the power because you can load the [HP c7000 BladeSystem] up so much, that you need three-phase power to do the redundant stuff."
The HP c3000, introduced just last month, runs all current c-Class server blades, and can fit up to eight blades. The c7000, by contrast, can hold up to 16 blades.
HP blade sales through distributors in the first half of 2007 totaled 44.8 percent, down 3 percent from the comparable 2006 period.
Solution providers say market share numbers in the future could tip toward HP because of the company's strength among SMB resellers. One VAR who heard blade pitches from both vendors this week at Ingram Micro's Venture Tech Invitational said he was impressed with IBM's BladeCenter S. "But I sell HP and I don't sell IBM," said the solution provider, who asked not to be identified.
Solution providers note that the vendor hype surrounding blades has generated a lot of interest among SMB customers, but most viewed them as a curiosity rather than a practical business solution. Costs, power requirements and a feeling that the larger chassis were overkill for SMB environments.
For example, Camera Corner Connecting Point, an SMB solution provider in Green Bay, Wis., last May held its annual customer conference in which its accounts meet with vendors and view the latest technology. Of the more than 20 customers attending an HP blade breakout presentation, only one was using blades in his business. But all that has changed.
"Blades since our show have skyrocketed," said Bill Voelker, CCCP's enterprise storage specialist. "The c3000 is half the size of the c7000 and it will be more affordable for the SMB market. The c7000 is definitely an enterprise product. If we have a small business with four, five or six servers, we can put them in a single cabinet [c3000] and one manageable unit. People are coming out of the woodwork asking about this thing."
Likewise, Pete Busam, COO of Decisive Business Systems, a Pennsauken, N.J.-based solution provider, says blade technology is now a legitimate solution for his SMB customers. "We have been quoting them but we weren't getting any traction," he said. "But the 3000 is positioned well. It's got a lot of features of the 7000, but at a price point that makes it more affordable for SMB. Now when I look at my customers that are eight servers and below, why would I take them to a 7000? We've now closed several blade deals in the last month."
Distributors also see the new blade technology as opening the door to midmarket customers. Rick Alvarez, vice president and general manager of Avnet's HP Solutions business, said that before the BladeSystem c3000's launch, solution providers said end users had to have 50-plus server environments to make the solution cost effective for them. Now, HP's c3000 has lowered the bar to entry and Avnet can begin seeking out smaller environments ripe for blade technology.
"The [c3000] has significantly lowered the barrier to entry into this solution area for the end user, so now our opportunity to sell to a much larger number of end-users with our VARs has expanded significantly," said Alvarez. "From a channel perspective, HP wants its VARs and its distributors to really help them exploit the opportunity in the midmarket space. Everybody knows that there is a big opportunity in the midmarket. The challenge in the past was how do you get an affordable solution that creates a big ROI for the end users."