Qsan: ‘It’s our time to compete with the tier 1s’

NAS and SAN storage specialist Qsan has been in the UK since 2009, but it’s fair to say it has flown a little under the radar.

Now, having opened its first UK office, with a string of rave reviews and a new NAS product around the corner, it’s ready to shout much louder about the business.

PCR sits down with UK, Ireland and Nordic MD David Kao (above right) and technical sales manager Stefan Ferrari (above left) to find out why resellers should be aware of Qsan and the margins they can expect to make.

Tell us about Qsan’s background…
David Kao: We’ve always been in storage, but at the very beginning we only made the controller. So before, Qsan was more like an OEM business. We made controllers for tier one and tier two vendors. Then we made our first SAN in 2004. And in 2009 we had our own brand and our own unified storage under the Qsan brand.

So, we helped the tier one and tier two vendors to make products. In Taiwan they know how to make a great product for those vendors, but they don’t really know how to make the branding. That’s why Qsan invited me to join.

What are your ambitions in the UK?
David Kao: Qsan has been in the UK since 2009 with its own brand of products. We more than doubled our revenue growth in 2015 year-on-year over 2014 in the UK, and we want to increase our brand awareness and our business here further. Then we have France, Italy, Poland and Russia. The UK and Russia had the most outstanding performance for us in 2015.

Qsan really makes good products. If we can make a good product for a tier one vendor, then why not have our own brand products? We want people to know Qsan and increase our marketing so people understand who we are, why they should choose Qsan and the benefits of Qsan products.

Stefan Ferrari: In reality, we’re more of a displacement – a second option. If people wanted to have things they would get from a tier one but don’t have the money to afford it, brands like ours are positioned perfectly to pick up that business.

Why should resellers consider Qsan over your competitors?
Stefan Ferrari: There’s the old adage, ‘nobody gets fired for buying HP’. But more and more if you look at big businesses, they’re losing money, they’re merging – the market for tier one is becoming smaller and less diversified. Without diversification you don’t have any innovation.

“We’ve got some amazing very well-reviewed products, we just need to get the message right. After that, we’ll be unstoppable.”

Stefan Ferrari, Qsan

Vendors like us can go and say: “Look, we’ve got a product. It’s reliable and has these features.” If you look at our HA NAS for example, we were first to market with an active-active NAS product. When you’re a vendor like us, you have more freedom. We’re not bound by the minimums they have at the likes of HP, they can only do certain things or have a certain amount of investment. For us, 40 per cent of our entire company is R&D. It’s a huge proportion.

Tell us about your new UK office…
Stefan Ferrari: David and I are opening Qsan’s first office outside of Taiwan, because we know that the European market does require that kind of attention. That will open around January 22nd and it should be fully operational by Q2.

David Kao: We want to have local marketing – that’s very important. And we also want to have local RMA and local support. So in the future, customers won’t need to return their proper unit back to Taiwan, they will just need to return it to our UK base. So our RMA centre will be responsible for EMEA countries.

What’s new from Qsan?
David Kao: We’re launching a new NAS product based on the Intel Broadwell CPU for SMBs at CeBIT in March.

Stefan Ferrari: This is for SMBs and we’re punching at the high-end. It’s not like the little Synology J Series at the entry-level.

There’s no real value in those anymore. The problem is, people are going into stores looking for these products and they’re not there. They’re going to Amazon, Ebuyer and Dabs to go online and buy them instead. So retailers are starting to change how they model their businesses and the way they get smaller vendors in.

So the market and retail is definitely changing. It’s a good time to get in and that’s one of the reasons we’re launching the new product for SMBs, but also because we would look for retail later on as a different business model.

SAN is more for enterprise customers with virtual environments, but NAS is becoming a term that people generally know now. Three or four years ago, the man on the street wouldn’t have known what it was. People need constantly growing storage – that’s why our products are designed to expand up to 256 drives. They have de-duplication.

People need that future- proofing and expect something to last for a minimum of five years. The market has changed.

Can you tell us a bit about DAS and JBOD and your other solutions?
Stefan Ferrari: There’s DAS (direct attached storage) or JBOD (just a bunch of disks). Let’s use our U300 JBOD as an example. It has two SAS ports, you can either connect it to a dual controller NAS or a dual controller SAN (storage area network). Or you can plug it into a Windows Server, Windows Storage Spaces for example, and it will be able to provision the data within that. At which point, it’s literally just a bunch of disks sat in a shelf.

“We more than doubled our revenue growth in 2015 year-on- year over 2014 in the UK, and we want to increase our brand awareness and our business here further.”

David Kao, Qsan

What kind of margins can resellers expect?
Stefan Ferrari: RRPs vary. Because we’re very project- driven, we don’t have a standard price. The bottom product, the Qsan 1U Rackmount costs about £800 to £1,000. If you put drives in it, that obviously changes the price. Then it’s upwards of £2,000 for the next one up. Our top-end product is about £9,000 for our 60-bay SAN, which is still reasonable.

The average margin with other vendors is maybe six to eight per cent maximum, with us it’s more like 12. That’s with drives. Without drives it’s maybe 10. On the top-end, margins with Qsan are about 20 per cent.

Tell us how you’re increasing your brand awareness…
Stefan Ferrari: For our marketing strategy, we’ve decided on a basic principle: Secure, Optimise and Scale (SOS). Our marketing will have dashes and dots for the morse code. It’s supposed to show that we’re there to rescue.

If you think about our strategy in total, we’ve got the marketing going out with the SOS message, we’re increasing our product portfolio, we’re opening our RMA office in the UK, we’re opening a support office in the UK… all of those things are designed to a) grow the awareness of the brand and b) grow the confidence in the brand.

What’s next for Qsan?
David Kao: 2016 is the key time for us to compete with the tier 1s. We’re introducing new form factors.

Stefan Ferrari: At the moment we’re first to market – there’s no one else with a 2U 26-bay 2.5- inch chassis.

2016 isn’t just a launch for a couple of new products. We’re doing a full inventory refresh. Every single product will have a new version. The 2U26 is one thing, then for high density we’ve also got a 4U 75-bay. It will be shelf- driven with three drawers at the back of the unit, which you can unclip and pull out. It’s great if you have a lot of drives, like 60 or 75. In 2016 we’re also launching a new JBOD and SAN.

We’ve got some amazing very well-reviewed products, we just need to get the message right. After that, we’ll be unstoppable.

Qsan’s UK distribution partners are CMS Distribution and Origin Storage.

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