StorageTek Moves Past Screwdrivers

Storage Technology Corp. (StorageTek) (NYSE: STK) has spun together two new storage management services that the company hopes will make customers believe StorageTek can provide more than just field technicians who know how to fix a busted tape automation library.

The first of StorageTek's new offerings is Enterprise Support Services, which provides first-line support for multivendor storage environments, including both software and hardware. The other is Remote Managed Storage, a 24/7 monitoring and problem resolution service, which is based on StorageTek's acquisition of the operations division of Storability Inc. last year (see StorageTek Buys Storability Assets).

StorageTek is able to broker back-end support agreements with other vendors, so it becomes a customer's proverbial "one throat to choke" -- or if all goes well, "one back to slap," says John LoPorto, VP of storage solutions at StorageTek [Ed. note: Or one nose to... oh, never mind.]

Companies StorageTek has worked with on this front include Hitachi Data Systems (HDS), IBM Tivoli, Legato Systems Inc. (Nasdaq: LGTO), Sun Microsystems Inc. (Nasdaq: SUNW), and Veritas Software Corp. (Nasdaq: VRTS), according to LoPorto.

"We've moving much more heavily into the software side," he says. "We're getting away from being just the guys with the screwdrivers."The Remote Managed Storage service, meanwhile, provides technicians that continuously watch over a customer's infrastructure to make sure it's up and functioning properly. The service is based out of StorageTek's network operations center (NOC) in Southborough, Mass., outside of Boston. StorageTek is also considering opening a NOC in Europe, but it can currently provide 24/7 support from the single facility, LoPorto says.

The two services are complementary, LoPorto says, in that the agents who are remotely monitoring a customer's SAN or backup infrastructure can alert the support personnel in the field to a problem immediately. "Our objective is, over time, for them to become the left and right hand of a complete solution," he says.

But Doug Chandler, program director for storage services at IDC, says StorageTek faces the same challenge as the rest of the storage systems vendors: "They're not really perceived as a services company. Customers don't think about getting services from a StorageTek, or even an EMC Corp. [NYSE: EMC]."

LoPorto, however, says StorageTek is getting more traction in its services business -- and it's also taking on larger-scale projects. He says the company recently took over a $6 million, three-year support contract for EMC equipment at a large media company in Europe. (Unfortunately, he was unable to name the customer.)

Services account for about one-third of StorageTek's overall revenue, and it's the fastest-growing revenue stream for the company, growing 11 percent in calendar year 2002. The services business unit has more than 2,300 employees based in 50 countries, who provide services to around 22,000 customers.Chandler notes that many storage vendors are increasing their services offerings, as revenues from products remain roughly flat. "What's interesting is that a few years ago, these companies' services were really entirely support services tied to maintenance contracts," he says. "Now they're managing to sell services beyond those maintenance contracts."

For more on this topic, see our recent report, SAN Consulting Services.

Todd Spangler, US Editor, Byte and Switch