SME too, says NetApp

Network Appliance is set to announce it has entered the small and medium-sized enterprise (SME) market, expanding its footprint into a fast-growth area that is increasingly becoming crowded with some of its rivals.

NetApp is launching StoreVault S500 as its new product line for the SME, as well as creating a new division around that effort. For NetApp, the move into the SME market brings the 14-year-old company full circle, according to analysts.

Greg Schulz, senior analyst with StorageIO Group, said: "They started in the [enterprise] mid-market more than 10 years ago with an entry level filer you could say was for the SME market. But over the last 10 years, they have solely focused on growing the enterprise market and are now returning to their roots, while continuing their pursuit of the enterprise."

NetApp decided to make a play for the SME market, as storage costs became less expensive to offer to the smaller customers and surveys demonstrated this customer segment faced hurdles in managing data, said Sajai Krishnan, general manager of NetApp's SME business unit.

Krishnan said: "We wanted to deliver a solution that would address the right pain points," noting the project spanned 18 months.

The SME market often faces stripped-down versions of enterprise products and is often left with a delivery channel that is not suited for its market. But NetApp and other players have recently rolled out products that were tailored specifically for this customer segment, with its own dedicated sales team and distribution channel.

StoreVault S500 is an appliance which targets companies that generally need half a terabyte to three terabytes of storage and spend less than $20,000 per year on storage products and services. Most of these companies, which tend to have an IT manager to address their general needs, employ fewer than 1,000 workers.

The device supports both network attached storage and storage area networks that use internet small computer system interfaces. StoreVault S500 is also designed to scale up to Fibre Channel without requiring a separate network storage system.

The StoreVault S500 pricing starts at $5,000.

NetApps' arch-rival EMC began experimenting in the SME market two years ago but came out with targeted SME products in the past six months, StorageIO's Schulz said.

He added: "It's interesting to see NetApp and EMC pitted against each other in the SME but there are other players there, as well. HP is a big player in SME and Dell is coming into this area. This whole market is heating up."

NetApp is not only trolling for smaller customers via its move into SME but the company also recently announced plans to target high-end enterprise customers, said Patrick Rogers, NetApp's vice president of products and alliances.

Rogers said: "We had scalable mid-range enterprise systems but not like IBM… with the same level of capacity and through put."

NetApp's Krishnan noted: "SME completes our story. We've gone from the mid-market to the high-end market and now we're addressing the SME market."

Dawn Kawamoto writes for CNET News.com