Resellers Rally 'Round SOX

Remember the speculation a few months back that Sarbanes-Oxley was stalling storage spending (see Another Reason to Hate Compliance)? The theory was, large organizations didnt want to buy new software until they met their initial compliance deadline. Well, a recent survey of enterprise resellers found Sarbanes-Oxley to be much more of a spending stimulus than detriment.

According to equity research firm Robert W. Baird & Co. Inc., 44 percent of value-added resellers (VARs) surveyed said Sarbanes-Oxley helped them last quarter, and only 1 percent said it had a negative impact. The rest said it had no impact on sales.

Baird surveyed 40 VARs with aggregate revenues of more than $4 billion in mid September.

Sarbanes-Oxley was originally considered a boon to storage vendors because it requires organizations to retain more information and have the ability to produce it quickly when audited. But Veritas Software Corp. (Nasdaq: VRTS) and other software companies said sales dropped in June as organizations curtailed spending while concentrating on reaching compliance (see Veritas Rides Earnings See-Saw).

"Sarbanes-Oxley did not have that much impact on overall IT, and almost no impact on infrastructure at all," Baird analyst Dan Renouard says. “There were a lot of fears that it would hurt the market, as companies would delay spending and lock down their systems. Then Veritas missed its numbers and pointed to Sarbanes-Oxley as a major reason why."