Adaptec gets into the SMB market in a Snap

During the past several quarters, one of the most interesting trends among storage vendors is the increased attention they are paying to the needs of small and midsize businesses. 

As I continue to research this market segment, I am increasingly struck by how the IT buying habits of SMBs, although similar in some aspects to those of enterprise IT buyers, also differ in some pretty fundamental areas.  Perhaps the most significant is that many enterprise IT purchasers have the “luxury” of making strategic investments, with the result that IT buys often occur as part of a cohesive long-range plan.

Smaller companies on the other hand, buy according to a more event-driven scenario.  They more commonly make a series of investments and purchases that are less driven by a coordinated plan and more by a need to fix a particular problem. 

In the U.S., we have the expression “When you are up to your elbows in alligators it is difficult to remember that your job is to drain the swamp.”  I am sure the concept rings true in other countries as well.  When we speak of IT in the SMB market, alligators are rampant.  As a result, the vendors are increasingly viewing the segment as a significant and under-addressed revenue source.

Last week, Adaptec announced plans to acquire network-attached storage (NAS) vendor Snap Appliance for $100 million.  Adaptec has been a known player on the enterprise IT floor for many years, although most typically IT managers never see their products, which for the most part have been host bus adapters (HBA) that are preinstalled in some servers.

Why did Adaptec go after a player that caters to entry-level NAS needs?  I spoke with Mark Delsman, vice president of Adaptec’s business development team, and Mark Pollard, Snap’s marketing vice president about this and here is what they had to say. 

The Snap acquisition provides Adaptec with two things: an immediate entry into the NAS business and an enormous presence at the lower end of the market where Snap is a well-known and trusted player. Snap is the largest provider of NAS devices in terms of units sold but these devices are in no way competitive with the more robust solutions from vendors such as NetApp and EMC.

For Snap, in addition to a considerable chunk of change for its investors, it gets a channel into the enterprise.

Adaptec has bought a number of companies within the last eight quarters, most notably Tricord in late 2002, Eurologic last year, and the component piece of IBM’s SCSI/RAID business last month.  The addition of Snap gives Adaptec a NAS product for SMBs.  Whether Adaptec can develop this into an enterprise solution as well (or if it should even try) we’ll have to wait and see.  At the least, it will give Adaptec more visibility with potential channel partners, and a chance for the company to increase the contribution, that channel sales make to its bottom line.