Shaking that AAS: It's time for vendors to stop selling storage

Exactly Cipher. If they have to hide the price, it ALWAYS means it's not competitive.

As for vendors of physical hardware, if you've ever dealt with printer vendors (ref recent BOFH) then you already know the drill. (or HR while trying to staff up your dept)

While I am no fan of cloud anything, this IS the one thing it (usually) get's right. WYSIWYG

Man, I've been saying this for years. But it's almost impossible to get through to them. Even new startups won't hear what's said here. They are all started by people who come from big storage vendors and, damn them all, they'll run them just like those large storage vendors.

The storage industry honestly believes the existing model works. More fool them; they won't comprehend their end until it's upon them.

There's a vicious circle element to this.

It's absolutely true that simplified pricing with transparent and well understood discounts based on quantifiable factors (volume, feature reduction, whatever) would add value to both sides provided the buyer is well setup to self-educate (and these days most even medium sized technical teams are given how easy the internet makes basic research).

The problem is twofold:

1) Big one-off sales carry more commercial risk to both sides than aaS offerings. If a storage array doesn't do what it's supposed to then either the vendor or the client takes a big lump, whereas turning your AWS account off after 3 days of POC testing couldn't be simpler (obviously the long-term lockin equation is different, but that's not the risk we're talking about here.

Because of that organisations tend to bulk up on presales people as they grow larger and their product set and client base become more complicated. EMC are the daddy of this.

Enterprise clients (and even more so government clients) expect this and have historically been willing to pay the higher costs associated with a vendor who'll send lots of people tell them what fits their use case (even if lots of things end up being missold in any case).

The technically astute target audience of this site don't need that, and so would rather have a price sheet and a feature set to do their homework on this and are sensible to think that a lower cost is worth the minimal risk of their getting it wrong. These people also buy second hand enterprise kit for themselves and their companies at hugely reduced cost for the same reason.

the aaS providers give some competitive pressure to this market, and IBM integrating Softlayer will be a fascinating exploration of the clash of two diametrically opposite cultures, but it's not a coincidence that the more the big public cloud providers try to move into the enterprise the more presales staff they're taking on. All of that will reflect in their cost base over time too.

2) Say a lean single item storage vendor like a specialist all-flash array startup did publish a price list and cut down its sales staff to a bare bones team of very technical salespeople. IT departments would love it, but would they actually sell anything to enterprise clients? I put it to you that procurement departments wouldn't know what to do and would immediately put the combination of low touch, no bargaining and low cost into the 'don't touch with a bargepole' category while the IT department wouldn't want to stick its neck out on something that the organisation couldn't front up the people to derisk.

It will be intriguing to see how things play out in the long run but I give you the G Cloud catalogue in the UK as an early example of the limitation of lean sales based on a transparent price list. Everyone nods approvingly and then goes back to working with the notoriously opaque enterprise vendors they were working with before.

You want list prices, but they cannot afford to publish them.

I can think of plenty of reasons they don't publish list pricing, but let's focus on just one - their route to market and I'll provide an example too.

Cloud based services - have a unique utility based go to market and some specific product and market characteristics. They can be priced and consumed by any unit or time period desired, they can be turned on and off, they can be trialled quickly and in most cases provisioned automatically. There is much less complexity in their service for an end user to worry about and most provide clear SLA's, so it could be perceived risk is less. But one of the clear reasons why they publish pricing is the commercial engagement between the service provider and the end user. Most cloud players lack a channel, or even a need for one. The decision making process and subsequent transaction is very clean in most instances. And because of the very competitive nature of the cloud market and lack of service stickiness, the pricing changes quickly and the winner is the one that best adapts to changing market conditions.

So let's look at a product sale. What's actually different? Well, because it's a product and not a service, the commercial model is entirely different. It's consumed differently and it's go-to-market in many instances requires the use of a channel, which is what complicates matters, as there is a third party variable which, depending on the type of partner and level of value and support is provided as part of the sale, changes the overall cost of the solution. This could turn into a very long reply. So let's look at an example which can perhaps best illustrate why modern enterprise storage systems do not readily provide list pricing online and purchase prices vary. You want to purchase an all flash array and you find 2 vendors that look interesting, lets assume the both publish their list prices, and let's play out a procurement scenario (these are made up numbers, don't read anything into them).

Vendor A - 20TB £150k SRP

Vendor B - 20TB £75k SRP

Let's assume on paper they all look like they'll do a job, because they have similar feature sets and roughly the same hardware.

You are immediately drawn to Vendor B because of the cost. So you ask yourself, how did they get the price so low? In your head perhaps you are now thinking that Vendor A is overpriced, you start to discount them, even your procurement teams are finding it hard to justify the extra cost of what seemingly is a similar solution.

Vendor B has adopted a cloud sales model and aggressively priced and promoted their solution, for wide market penetration. They don't use a channel and are light on sales resource. You make an inquiry and they give you a price, pointing you back to the web to get it. They happily provide technical support over the phone, and now you want to test it, you know, just to make sure! "Sorry, we don't provide units to test - but you can look at our GUI on the web and try out the management interface". Why don't you provide units? "Cost of testing and managing them is too high, we don't have the resource to integrate them on-site" (they'd never say that of course but would find a suitable excuse that means the same thing). Can I buy them from a channel partner? "Sorry, we are priced aggressively for the market leveraging a direct sales model" I'm sure you get where I'm going with this. Suddenly because you cannot test the solution properly, you are now looking at Vendor A again. But your still get the hump that they are 2x on price. But they do it because they want to advertise themselves as a premium solution and they have many resources and a channel to feed. They are helpful and supportive, a vendor guy comes to see you, and he turns up with your incumbent integrator, they help you test a box, provide free consultancy offer to support you with the integration. Indeed, the integrator help optimise you application environment to make better use of the solution you are interested in. All good stuff, but you still cannot get over the 2x cost. Surely, all the value is not worth that amount. So you decide to try and negotiate. Strangely enough they respond and you get the price down a bit, your procurement steps in and it gets down a bit more. Then you are left with a decision, go with vendor B, who's adopted a cloud service sales model, all looks good - still lowest rice, decent specs - but you cannot test properly or Vendor A? who's been very helpful, you've tested the kit and know it works but remains the more expensive option?

Answer: you may go with either (probably A, because you don't want your arse kicked if it doesn't work out as planned). But they were the only two choices.

Now, here's the bit where it doesn't work. Look at it from a vendors perspective. Take Vendor A and other companies like them. In the real word, there isn't just vendor A & B, but C through to Z as well. So many options, where do you start? Well, you can't review and test them all, so you start by eliminating the ones with the highest price and the less attractive brands. But you haven't even tested their great product!? It could be the one for you! But .... "Yikes, I'm not paying that, premium solution or not", something gotta give.

So you see, in the real world, vendors don't want you to discount them by publishing list prices. There's no room to explain all the value you get for it, the channel that helps. You've discounted them based on a number. They are not going to survive very long are they? And because of the different type of go to market each vendor may take - 1 tier, 2 tier that value changes. How do you explain that in a list price? Simple. They don't publish them, so you cannot make that decision until you understand their proposition better and they understand you and your requirements.

If enterprise storage ever becomes truly commoditised, tested and sold off a page, then things might change, but the technology, channel and market landscape would look remarkably different to what it does now.

Yes you can

Search AWS Marketplace for NetApp Private Storage. Pricing per system or per hour. Same is planned for Azure & SoftLayer I believe.