Shaking that AAS: It's time for vendors to stop selling storage
They should follow Amazon's lead
Storagebod In the shower today, I thought back over a number of meetings with storage vendors I’ve had over the past couple of weeks. Almost without exception, they mentioned AWS and the other large cloud vendors as a major threat and compared their costs to them.
We’ve all seen the calculation and generally we know that for many large Enterprises that the costs often favour the traditional vendors; buying at scale and at the traditionally large discounts mean that we get a decent deal. Storage turns out to be free at the terabyte level and only becomes an appreciable cost once we start getting to the petascale – this is pretty much true for both the cloud providers and the traditional vendors.
But when I look round the room in a normal sales presentation/briefing, it is not uncommon for the vendor to have four or five people present, often outnumbering the number of customers in the room: account salesman, product salesman, account technical specialist, product technical specialist and probably a couple of hangers-on. A huge cost to the vendor and hence to me as a customer.
And then if we decide that we want to purchase the storage, we then drift into the extended procurement mode. Our procurement and finance teams will talk to the vendor teams and there may well also be legal teams and other meetings to deal with. The cost to both the vendor and the customer is enormous.
However, if we go to a cloud vendor, we generally deal with a website. The cost is there: it’s displayed to all and the only discounts we get are based around volume. Now, I know that there are deals to be done with the larger cloud vendors – otherwise I wouldn’t be fielding calls from their recruitment people looking for people to work in their technical consultancy/sales teams – but their sales efforts and costs are a lot less.
It seems to me that if the traditional storage vendors really want to compete with the cloud vendors, they need to change their sales model completely.
This means stripping out huge amounts of the cost of sale; this means that they also need to consider how they equalise the playing field for customers both large and small; and this means published volume discounts and reduced costs for all, especially the smaller customers. The enterprise customers will not initially see a huge difference in their cost base, but smaller customers will have greater choice and long term it will benefit everyone – perhaps even some vendors.
Basically, vendors should stop selling storage. Instead they should build better products, sensible marketing and reduced friction to acquisition.
I kind of hope that the move to "storage delivered as software designed to run on commodity hardware" could drive this but at the moment, I see many traditional vendors really struggling to come up with a sales and marketing strategy to support this transition.
The one who gets this right, could or should do very well. The ones who continue with sales model that is based on how they sold hardware in the past…could fail very hard.
Yes, there are customers who still like the idea of buying hardware and software in an integrated package – although arguably that’s what the cloud-providers do with serious limitations – but they will look at disaggregated models and do the cost modelling. Your prices should not attract some of the serious premium that you believe that you deserve... so look at ways of taking out cost.