Disaster planning boosts Dell’s storage sales

Dell Computer Corp. said last month that it has seen a significant spike in the sale of small storage devices as a result of new disaster recovery planning efforts by many of its small- and medium-sized business customers.

The hardware maker experienced as much as a 70 per cent increase in sales of third-party storage products in third quarter ended Nov. 2, compared to the same quarter a year ago, said Ro Parra, senior vice-president of Dell’s Americas region, during a conference call with the press. Dell resells a number of smaller storage products from other vendors in addition to its own high-end storage products.

Citing only its sales to small- and medium-sized business (SMB), Dell said much of the boost was due to new interest in external storage devices, tape drives and back-up disk drives. The figure didn’t include sales of Dell’s line of PowerVault larger storage products.

“We can tell you that customers are continuing to buy more third-party (small) storage products (from us) than they did last year,” Parra said. “Across the board we have seen a dramatic increase in the acquisition of these products.”

The company’s growing emphasis on data storage and back up highlights the need for small- and medium-sized businesses to bolster their disaster planning efforts, Parra said. He was joined by analysts from Gartner Inc.

“Most SMBs have under invested in these areas,” said James Browning, a research director at Gartner who spoke during the press call.

Companies of all sizes spend on average two per cent to three per cent of their data centre budgets – what Gartner described as capital equipment and outsourcing expenses – on disaster preparedness, according to Gartner research. That figure includes the purchase of additional storage and server devices. Companies in the finance industries spend about seven per cent of their data centre budget planning for disasters.

“Most small and medium businesses complain they can’t afford it. Big businesses also have that same complaint,” said Donna Scott, vice-president and research director at Gartner. “Nobody wants to spend money on this, but they must, to ensure the viability of the enterprise.”

Following the Sept. 11 attacks and as many as 40 other national disasters reported during the year by FEMA (Federal Emergency Management Agency) such as floods and the California power crisis, businesses of all sizes are beginning to reassess how prepared they are to respond to disasters, Dell and Gartner officials said. The amount of money of the data centre budget spent on disaster preparedness is expected to increase about 10 to 20 per cent in 2002, Scott said.

In addition to a boost in storage hardware sales, Dell said it has seen a noticeable increase in the need for related services from small and medium-sized business customers. Thus, new efforts by Dell’s Technology Consulting division will focus on helping companies get prepared for disasters.

“All businesses must continue taking steps to secure their data,” he said.

Dell, in Round Rock, Tex., can be reached at http://www.dell.com/. Gartner, in Stamford, Conn., can be reached at http://www.gartner.com