Called the Clariion AX100 and previously code-named Piranha, the device is a reworked, low-end version of EMC’s existing Clariion mid-range disk array.
The box will sell primarily through the channel, and will carry a recommended price price of $5,999 for a 0.5TB of storage, making it by far the cheapest of EMC’s mid-range Clariion disk arrays. The next cheapest Clariion is the CX300, which costs about $15,000 for the same capacity.
This is EMC making a plunge into the volume market for entry-level products where pricing is hugely important, and where customers are relatively unfamiliar with its EMC’s brand name. As a result, EMC appears to have thrown as much as possible at the AX100 in order to boost its prospects. According to analysts, the box will be very competitive because of its ease-of-use, and the mid-range features that it will offer at entry-level prices.
By the end of the year, EMC says the AX100 and other Clariions will have gained support for iSCSI (see separate story). Meanwhile EMC’s existing Clariion-reselling partner Dell Corp will sell the AX100 as standalone device, and as the basis of SAN package that can support up to eight server, when bundled with low-cost HBAs and Brocade’s latest and cheapest 8-port SAN switch.
This SAN package will cost $10,000 – half the price of some competing gear, according to Dell.
Alongside Dell, EMC’s existing reseller Fujitsu Siemens and several other channel players will carry the the device. These will include Samsung Corp, which has become a new partner for EMC.
Dell is the only major vendor that has really got to the SMB market. EMC believes it can leverage this, together with the lessons it has learnt from Dell about how to use the channel, said Peter Gerr, analyst at the Enterprise Storage Group.
Greg Schulz, analyst at the Evaluator Group, said: The trick for EMC will be to get everybody in the channel to sell this product, but without polluting the channel. They’ve got to manage it well. That pollution would consist of infighting between channel players attempting to undercut each other.
Pricing will depend on how resellers package the box with services and other products according to EMC, suggesting that it expects others to follow Dell’s example of SAN bundling.
Schulz added that EMC’s Clariion division had experience of managing a crowded channel when it existed as a separate company to EMC in the form of Data General.
Although EMC insists that the AX100 is built on the same architecture as its other Clariion mid-range disk arrays, it will not be upgradeable beyond its maximum 3TB capacity, and it runs only low-cost SATA disk drives.
EMC said it had to use cheaper hardware to build the AX100 in order to achieve a price that would appeal to its target market of customers connecting the device to up to eight Intel-based servers.
Along with the low price, EMC stressed the ease of use of the AX100, which includes software set-up and monitoring Wizards, and even comes with a color-coded installation wall chart. According to Gerr, the AX100 can be installed by relatively inexperienced staff in 30 minutes.
It’s been engineered for the channel, said EMC’s senior marketing director Mike Wytenus.
According to both Gerr and Greg Schulz, analyst at the Evaluator Group, the box carries free software that must be paid for on other Clariion arrays, or on rival IBM or HP hardware. It’s going to be very competitive. It includes functions such as snapshot tools, failover, and dynamic volume growth normally only associated with high-end products.
Where the AX100 sits relative to other products is not clear. EMC compared the box to the entry-level versions of HP’s MSA and IBM’s FastT arrays, but Shulz said it will compete with devices from companies such as IQStore, NexSan and Iomega. It sits right above Dell’s JBOD, and just below regular arrays, he said.
EMC is sensitive about the fact that when customers reach the maximum 3TB twin-processor capacity of the AX100, they will not be able to upgrade and convert it into a larger Clariion. Instead they will have to migrate their data onto a new box.
It is a Clariion – it’s got the same basic functionality as a Clariion. To meet the price, we had to make a hardware redesign, Wytenus said. The differences involve components such as memory, fans and power supplies.
EMC CEO Joe Tucci told ComputerWire that there is no danger of over-reliance on Dell as a sales channel.
It’s not even a thought in my mind, he said. Dell accounts for about one third of Clariion revenue, other channels sell one third, and we sell the other third. With the AX100 we expect EMC’s direct sales to account for far less than a third, that’s true. The AX100 is primarily a product for partners and channels. But we are still nowhere near the danger zone. Dell’s sales for EMC account for well under 10% of our total sales which is the point at which we would need to report it, so I don’t see any danger there. In fact I would like Dell’s sales [of EMC equipment] to grow as fast as possible.
As for the question of whether moving down to the lower end, and pushing even more sales via channels is likely to erode EMC’s gross margins, Tucci said that, This won’t have a negative effect on gross margins. Obviously you need to sell more little machines to get the same result as selling a few big [Symmetrix] machines, but overall the margins will come out about the same.
