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NEC pushes to expand U.S. storage channel, sales

NEC only began to sell storage product to the U.S. this year, but it's hopeful it will penetrate the market. Analysts have their doubts.

Yesterday's announcement that NEC Corporation of America is introducing a one-year, money-back guarantee program for its Express5800/320Ma FT series servers is one of a number of sweeteners the company is offering to entice new partners to resell its storage products in the U.S., analysts and company officials said.

NEC's entrance into the U.S. storage arena earlier this year gave resellers, value-added resellers (VARs) and systems integrators another opportunity to tap into a burgeoning set of storage technologies in an already crowded vendor landscape. Following Hitachi Data Systems success in the storage market, NEC wants to become another Japanese company that can eke out a place for itself, and NEC officials said they are depending on the storage channel with the assistance of key distributors to help them get there.

NEC officials do admit, however, that theirs is an uphill battle and that they are still getting the word out to soluton providers about their products, according to Matthew Wolken, vice president, fault tolerant server and data storage at NEC Corporation of America. He also said NEC is making steady progress.

"We've gone from having no VAR relationships to having around 20 relationships. We've gone from not having any distributors to having two — Avnet Partner Solutions and Team 1 Systems, Wolken told

Hoping to replicate its strong storage market in Japan — and banking on its relationships with many Fortune 1000 companies as well as small-to-midsized businesses (SMBs) that have bought various NEC technology products in the past — NEC Corporation of America, said it intends to combine its branding with its sales force to create leads for resellers.

In addition, Wolken says, to drive VAR sales the company offers incentives programs like giving disk drives for free if a customer buy's an NEC array, as well as structuring a sales program that benefits the VAR.

"We don't compete with our value added resellers and distributors necessarily, because we don't have a direct-sales force that would call on the same customer potentially," Wolken said. "That doesn't mean we don't have people in the field selling the product and acting as a sales person, but we don't have the conflict because we are not writing the paper if we find the deal. We're sourcing that back to the channel partner," Wolken said.

Advertising, offering sales promotions and ramping up channel activity is exactly what what NEC needs to do to get the channel motivated, according to Michael Fisch, an analyst with IT research firm The Clipper Group, Inc. In addition, NEC Corporation of America may find it more difficult to sell storage products in the American market.

"In Japan they have the home court advantage being a Japanese company, but that won't translate here. They are plugged into the local market in Japan, and so they would have an easier time getting their products to market there," Fisch said. "Here they will just be another player among many and there are some strongly established storage vendors in the market," Fisch added.

Still, NEC Corporation of America intends to continue its strategy and increae its offerings, including selling IA-64 processor-based servers as well as software for storage that it says is hardware agnostic.

Last month the company announced it had completed compatibility certification for its 4 Gbps storage arrays distributed in North America, becoming a member of McDATA Corporation's OPENready Partner Programs.

In July the company introduced its third-generation NEC Express5800 Itanium servers that amplify the capability of the new Dual-Core Intel Itanium 2 processor 9000 sequence. NEC said the product meets the needs of the highend server market.

In the meantime the one-year money-back guarantee program for The Express5800/320Ma Fault Tolerant (FT), has a limited time offer that's applicable to new purchases made from Nov. 6, 2006 through March 31, 2007, and is valid for one year from the date of installation within the U.S.

Under the terms of the program, if a newly purchased system does not meet 99.999% availability during the first year of production operation due to a hardware failure, NEC Corporation of America will refund the net purchase price of the Express5800/320Ma FT series server hardware.

To qualify for the money-back guarantee, customers must acquire a new Express5800/320Ma with Intel Dual-Core or 3.2GHz processor from and be installed by NEC Corporation of America or an authorized NEC partner. The model must be a Microsoft Windows-based Express5800/320Ma FT series server that includes Virtual Technician Modules (VTMs) and ActiveUpgrade support with an Uninterruptible Power Source (UPS) system, and must be purchased with the NEC Express Start Standard Implementation and Enhanced Warranty Service Package.

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