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'Storage is becoming a strategic investment priority for companies'

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SummaryWith enterprises and government making significant investments to cut down on storage costs and making more efficient and reliable use of data, IBM sees increasing demand for storage capacity across verticals and market segments in India.

With enterprises and government making significant investments to cut down on storage costs and making more efficient and reliable use of data, IBM sees increasing demand for storage capacity across verticals and market segments in India. In an interview, Sandeep Dutta, vice-president (Storage, Systems and Technology Group), IBM India/SA, tells

Debojyoti Ghosh the next big growth drivers in the storage space and how it plans to tap into the mid-market segment. Excerpts:

How does IBM see its storage business growing in the Indian market and what has been the story so far?

Demand for storage capacity continues to grow at a compound annual growth rate of over 43% from 2008-2013. Data explosion is happening at an exponential rate across verticals and across market segments in India. The explosion of information created by business is making storage a strategic investment priority for companies of all sizes. IDC projects that the storage market in

India is expected to grow at CAGR of 13% in 2011.

We are investing both through acquisitions and organic development to drive innovation in key storage technologies across software and hardware. Additionally, we are making multimillion-dollar development investments in high-end file storage, archiving solutions, disk virtualisation and tape density to continue to drive IBM leadership.

Our storage business in India has been growing at a tremendous pace. According to the recently released IDC report, IBM maintained its leadership in 2010 with a 26.2% market share, in revenue terms, and over 4% points lead over its nearest competitor.

Do you expect business to grow from the current levels? Which are the verticals that will drive this growth?

Certainly, enterprises of all sizes and governments are making significant investments to address three main challenges: cutting storage costs and making more efficient and reliable use of data; increasing capacity to store data on a massive scale; and categorising and prioritising data to gain insight through analytics. We have invested billions over the last few years in innovations and believe that this will continue to help drive the momentum we are seeing in our storage business. In addition to the mid-market segment, we believe sectors including telco, public/government sector and banking driving growth this year.

How big is the small and medium business (SMB) market for IBM in India?

Mid sized businesses are responsible for 75% of the GDP globally and employ 90% of the global workforce. This market is, and will remain, a key focus for IBM. We will continue to focus on aggressively increasing its presence in tier 2 and tier 3 cities through our geo-expansion strategy and building our partner base to take our new launches, such as DS3500 entry level disk storage series and StorwizeV7000 which is suited to address the requirements of mid-sized clients.

Our focus on geo expansion and small deals resulted in about 75% growth in our entry level storage. We improved our share in the overall external disk storage market by upping our market share from 27.1% in Q3 2010 to 29% in Q4 2010.

How are you planning to tap into the SMB segment?

We are extremely optimistic about the potential for storage in the mid-market segment. To ensure that our partners keep pace with the fast growing storage business, IBM has been investing a lot in partner training and enablement under IBMís Storage Champions programme. We have over 35 mid-range storage champs and expect to increase this to 60 next year. In 2010, about 300 partners did storage business with us which is a nearly 20% growth over previous year.

Going forward, what trends will the storage market in India see?

2011 and beyond, will continue to see storage as a strategic investment priority for mid-sized companies. Customers will be focused on storage efficiency or doing more with the less, and this will see an increase in the adoption of consolidation, virtualisation and de-duplication technologies.

We have a robust portfolio to address these pain points, including Storwize V7000 that is specifically targeted at offering mid-sized companies. Going forward, we will continue to invest in and further strengthen our partner community by constantly educating and enabling them. We expect about 70-75% of our consolidated business to be driven through our channel partners.

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