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Iomega Offers Storage Virtualization to SMBs

Iomega and VMware team on storage virtualization for small business
The days of virtual storage environments being limited to the big boys due to price point and management workload are over. Iomega today announced two NAS devices certified for VMware for the SMB and remote office location.

The Iomega StorCenter ix2 and Iomega StorCenter Pro ix4-100 desktop network start at $300 for one terabyte of data and are aimed at companies with under a hundred users. This offering is the clearest indicator yet that storage titan EMC, Iomega's parent company and the majority owner in VMware (NYSE: VMW), sees big money in the SMB sector.

Iomega said the move illustrates the first steps in bringing traditionally high-end storage technologies to the smaller enterprise and EMC's cohesive strategy behind its Iomega and VMware product portfolios. EMC bought VMware for $635 million in 2004 and acquired Iomega for $213 million in 2008.

"There is a wide range of technology being developed, and this is just one piece that meets the overall needs of SMBs. These companies can now achieve the benefits of VMware at a price point they can afford," Jonathan Huberman, president of Iomega and the Consumer and Small Business Products Division of EMC, told InternetNews.com.

According to Iomega, a small business running Microsoft Exchange on one server and Microsoft Dynamics GP ERP on another can consolidate both applications on one single server with VMware and an Iomega ix2 or ix4-100 NAS. That ability, said Huberman, reduces server costs as well as operational costs such as power consumption and server management time.

The products are good fit for remote office locations, as these environments typically don't have full time IT staff for managing VMware deployments, said Huberman.

The news comes as storage players, initially immune to economic conditions that hit some tech sectors hard last year, are experiencing financial strain as businesses slash tech budgets and delay capital expenditures. Research firm TheInfoPro has stated Fortune 1000 firms plan to spend 14 percent less on storage in 2009.

EMC, VMware close ranks

Strategically, it could also illustrate EMC strategy's in melding VMware into its expansive storage portfolio. The issue has been a hot button between EMC and VMware following the acquisition and played a role in VMware CEO Diane Greene being ousted by EMC last year.

Greene's insistence around VMware's independence meant EMC salespeople could not sell VMware bundled with storage solutions. As competitors such as Microsoft ramp up their own virtualization offerings, industry observers have said they expect to see more bundling of VMware in EMC products. Last July VMware unveiled its latest version of its ESXi 3.5 hypervisor, Version 2.5, available at no charge in its competitive play against Microsoft.

EMC told InternetNews.com that it does not sell VMware licenses and now serves as a VMware authorized consultant. "We just build solutions and make as many of our solutions, where possible, optimized for VMware environments," corporate spokesperson Todd Cadley said.

Delving deep into the SMB venue could pay off big time as it's viewed as an untapped, but highly lucrative, market. Storage titans have typically eschewed the market due to low margins and lack of up-sell opportunity.

But last year that market view changed dramatically as a slew of players began pumping out SMB products. In buying up Iomega, EMC gained a huge customer footprint and a deep channel, which better positioned it against other strong SMB market competitors such as Dell (NASDAQ: DELL) and Hewlett-Packard (NYSE: HPQ).

The latest move by Iomega to bundle virtualization into its SMB storage offerings could be a gamer changer in the race, noted one analyst.

"Virtualization has always had a layer of complexity that didn't lend itself to small shops with little or no IT resources. With this they've [Iomega and EMC] created a line of NAS devices already certified for virtualization and providing a plug-in solution," Charles King, principal analyst at Pund-IT, told InternetNews.com.

"All the vendors are moving down into the market, but providing a pre-configured and pre-optimized offering at such an aggressive price gives EMC equal footing against HP and NetApp," said King, noting HP and NetApp both offer storage products bundled with VMware.

But Iomega's Huberman said Iomega doesn't view itself as a NetApp competitor, given the vendor's storage offerings are in the $10,000 to $15,000 range.

"We are not saying we are a NetApp play. But if a company doesn't need a NetApp this gives them what they need to do virtualization," he said.

The StorCenter ix2, which can support groups of 12 users or less, is priced at $299.95 for the 1TB capacity unit, and $479.95 for a 2-TB capacity unit. The StorCenter Pro ix4-100 NAS Server, geared for up to 25 users, is available in a 2TB unit for $799.95 and a 4-TB unit for $1,299.95.

Update clarifies the two Iomega NAS devices are certified for VMware, but VMware is not included.