CNET también está disponible en español.

Ir a español

Don't show this again

iPhone 12 launch Tom Holland's Nathan Drake Apple Express iPhone 12 and 12 Pro review Remdesivir approval for COVID-19 treatment Stimulus negotiations status update AOC plays Among Us

Commentary: Brand isn't enough to capture appliance market

Toshiba will likely face many challenges because its brand recognition is greater in consumer markets than in enterprise server and storage markets.

By Pushan Rinnen, Gartner Analyst

If 1999 was the year of seeding for server appliances, 2000 should go beyond the seeding stage into cultivation.

The 1999 market share data

See news story:
Toshiba looks to tap server appliance trend
presents a fragmented market landscape, with the top five vendors capturing only 38 percent of the market in terms of unit sales. The entry of many major vendors may help further consolidate the market in 2000.

The server appliance market experienced 67 percent growth to more than $1 billion in user spending in 1999.

Although some major firms entered the market in 1999, most of their products started shipping in the last quarter of the year. Some of the products are the companies' first attempts to test this new market.

This situation changed quickly in the first six months of 2000, when the incumbents refreshed or enhanced their product lines, and the major-brand companies announced their full-attack plans.

Gartner believes the newly announced products from the strong brands will go beyond validating the market to push sales volume and user spending to new heights.

Survey data quantifies the popular image of who the market leaders are in unit sales and end-user spending--Cobalt Networks and Network Appliance, respectively. Cobalt Networks captured 14 percent of unit market share in 1999, and Network Appliance commanded 42 percent of the revenue market share.

However, strong brands do not guarantee success in this market--the positions of major systems sellers IBM, Compaq Computer and Dell Computer attest to that.

Although a partnership with Connex could push Toshiba into a higher-growth market (network-attached storage), Toshiba will likely face many challenges because its brand recognition is greater in consumer markets than in enterprise server and storage markets.

Companies need to commit themselves to educating distribution channels and end users, and products must stack up well against the competition.

To capture a larger piece of the pie in the market, vendors with strong brand recognition cannot rest once they launch their products. Besides best-of-breed features they aim to provide, they will have to make significant marketing investments to advertise effectively in the proper media.

For small vendors or start-ups that do not have the name recognition of Cobalt Networks and Network Appliance, finding a vertical market niche or nurturing a manufacturer relationship or acquisition opportunity will be vital to their survival.

Entire contents, Copyright © 2000 Gartner Group, Inc. All rights reserved. The information contained herein represents Gartner's initial commentary and analysis and has been obtained from sources believed to be reliable. Positions taken are subject to change as more information becomes available and further analysis is undertaken. Gartner disclaims all warranties as to the accuracy, completeness or adequacy of the information. Gartner shall have no liability for errors, omissions or inadequacies in the information contained herein or for interpretations thereof.