Despite taking some market share from EMC Corp. this past quarter, Hitachi Data Systems remains in fifth place for external and internal disk storage sales, behind EMC, Hewlett-Packard, IBM and Dell. Dave Roberson, president and chief operating officer of HDS, spoke with Computerworld about how virtualization and tiered storage has been instrumental in grabbing market share. He also acknowledged that his company's go-to-market strategy needs an adrenaline boost, with lower-end systems and better reseller partnerships being key to moving up the food chain.

LM: Why aren't you grabbing more market share?
DR: Well, let's look at where the market share is being gained. We're gaining a lot in what's traditionally been called the enterprise, which has three main players: IBM, EMC and us. Dell is primarily gaining its share in the small-to-medium-business market. We've been preparing and building our capabilities, but that's where we've not been as strong as we have been in the enterprise. Our enterprise share is in the 40 percent range, depending on what set of figures you look at, whereas the small-to-medium-business market [share] ... is more in the high single digits. So we're investing in building our channel capabilities, and we're investing in our new products and looking at a lot of things to gain share in that market. I'd hope we'd be making some announcements early next year.

LM: What technologies are you planning to use to break into the SMB market?
DR: Actually, I don't think this is a technology driver. This is more of a go-to-market issue. I think we have the technology. We already have the Serial ATA drives. We can do iSCSI. Part of it is price points, the ability to be aggressive in market with a price point. In this market, it's typically about half the price of the enterprise, give or take. We can meet that price point, but sometimes there's an advantage to having a lower price when going to market. The other key driver in this market is people are a lot of times not looking for a storage-only buy. So one of the reasons you see Dell doing so well is that they're selling a turnkey solution with the [storage-area network], with the server, with the storage and everything.

LM: Are you seeking out partnerships to help you increase your market share?
DR: Yes.

LM: When and with whom do you expect to finalize a partnership?
DR: You'll see something from us in the next six months, but don't necessarily expect to see another server partner. There are other ways to get to that market than through servers, and I'll just leave it at that.

LM: So the obvious follow-up question is, Are we talking about a pure reseller partnership?
DR: That would be the obvious other choice. We are looking at how we can expand our presence in that market and looking at who's available on the reseller side, who they're aligned with and how we can add value on their side and ours to bring some unique value propositions to the market. We're really looking at who we can partner with who's not aligned or who is neutral enough, because we really need to be in the first position with someone - but someone who's large enough to make a difference.

To sign with a new server partner is just not realistic at this point, considering the relationships they have in place today -- not to say I wouldn't want to.

LM: Most users I've talked with consider the TagmaStore array and its virtualization technology solid. But how many are actually using it to pool heterogeneous storage vs. using just internal disk on the array itself?
DR: A quarter to a third of them. We've sold 1,700 systems, so that's a material number of users, I'd argue. One of the things we're finding people are using virtualization for a lot is data migration. Where it's more difficult to migrate other people's technologies, they'll use our engine for data migration - even on other people's [arrays]. But we do have people running in production with IBM, EMC and others that batch to the [TagmaStore] controller.

LM: Would you ever port your virtualization software to a network device, like Cisco's MDS switch?
DR: Not at the moment. We intentionally brought our midrange product out, the NSC55, to bring it down a level. But we haven't, at this point, looked at porting to somebody else's technology. That doesn't mean we won't. But that's not in our current plans.

LM: Booming almost as quickly as midrange storage are low-end systems for enterprises with many branches. Do you plan any products for that market in the next three to six months?
DR: That's an area that goes back to our channel discussion, where we need to have a good, viable, low-cost product to go into that market. And I think you'll see something from us in that six-month time frame. We see that as the key market we want to attack over time. That's where we need the distribution as well as the product. Having one without the other doesn't help you a whole lot. As HDS, we're really not set up to effectively enter that market, because our sales model isn't geared to that.

LM: HP, Sun, IBM and Dell all have their own servers to help drive storage sales, but would you ever consider partnering with a Dell, like EMC did, to help with distribution?
DR: Well, we could if they'd be interested. We are partnered with HP and Sun today in the enterprise. We do know how to do that. Today, we've not found a server partner of that stature.

LM: You mentioned getting aggressive in your go-to-market strategy. What are you doing to be more aggressive in your pricing?
DR: I think where we need to be more aggressive is in these low-end products, because price is a big driver there. We'll continue to be competitive, as we need to be in the enterprise, and certainly price is always an issue. But I don't think we'll get any more or less aggressive than we have been in the past when it comes to our traditional business.

LM: What about network-attached storage technology. Will you make any inroads there?
DR: That's another area we've not executed well. There are a number of things we're working on. In your six-month time frame, I think you'll see more from us in that arena as well. I think we need to have a stronger internal capability in that space. We may partner. How we get it remains to be seen.