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Shopping for storage: One vendor or more?

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Mixed storage
Today, almost all enterprise storage managers work in a multivendor storage environment consisting of storage systems of various ages and capabilities from a variety of vendors. Sometimes these mixed environments arise due to corporate mergers or acquisitions. In other cases, different storage acquisition strategies have produced the mixed environment. However the enterprise got there, mixed storage is a fact of life.

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Tips for getting the best price
Robert Passmore, a research vice president focusing on storage at Gartner Inc., Stamford, CT, offers the following tips for negotiating the best storage price:
  • Learn professional negotiating skills or enlist a trained negotiator.
  • Negotiate licenses for software functionality separately from the storage hardware.
  • Shop for the broadest hardware compatibility.
  • Insist on support for software management standards.

Gartner Inc.'s "2004 Data Center Conference Survey" found that 26% of respondents deliberately turned to multiple vendors to gain a pricing advantage and 5% opted for multiple storage vendors to gain specific functionality. The mixed storage environment, however, is inherently more costly. The cost of managing different, often incompatible, storage systems drives up the total cost of ownership, as Halamka discovered.

On the other hand, Gartner advises its clients to aggressively play multiple vendors against each other to get the best price. Such an approach could bring an immediate pricing advantage of 20% to 30%, says Robert Passmore, a research vice president focusing on storage at the Stamford, CT-based research firm.

Negotiating with multiple vendors is a laborious and time-consuming process, so coming out of that process with a 20% savings may not seem to be worth the effort. "Twenty percent was our starting position. You can get 20% just by being difficult to deal with and not jumping at the first offer," says Brian Kilcourse, former senior vice president/CIO at Walnut Creek, CA-based Longs Drug Stores Corp. and currently chief strategist at Retail Systems Alert Group, a Newton, MA-based consultancy to the retail industry. Only after you've moved beyond the initial 20% to 30% discount does the real negotiating begin. Kilcourse says he was able to negotiate discounts of 50% off the initial price.

Even Passmore expressed reservations about Gartner's traditional approach of pitting one vendor against another. "You gain negotiation leverage with multiple vendors, but there's a tradeoff," he says. The tradeoff is increased complexity and a lack of compatibility between storage systems. In the end, "a vendor's drive to differentiation and lock-in, lack of standards and a lack of tools often make it very difficult for multiple solutions to co-exist," he says. You may end up giving back what you've gained in the initial acquisition price in increased management costs.

"Anybody who plays the two-vendor strategy will have to consider the cost of additional staff and training," notes Passmore. "If the organization is facing a shortage of staff to begin with, then you certainly don't want two or more vendors." But if you opt for a single storage vendor strategy, "you'll want to get a trained negotiator," he advises.

This was first published in February 2006

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