Shopping for storage: One vendor or more?

Buying storage today is more difficult than ever. You need to get the best acquisition price, the lowest long-term TCO and avoid vendor lock-in. On top of it all, you must decide which is best: one vendor or more?

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Some shops opt for multiple vendors, others stick with just one. Which approach will help you trim storage costs?

EFFECTIVELY BUYING STORAGE TODAY IS LIKE TRYING TO pull off a hat trick in hockey: Get the best acquisition price, the lowest long-term total cost of ownership (TCO) and avoid vendor lock-in. But scoring on all three counts is far from easy.

Yet IT managers increasingly find themselves under pressure to accomplish this trick repeatedly. "There's a constant battle in every organization over the cost of storage," says Richard Villars, vice president, storage systems at IDC, Framingham, MA. "If it's a commodity situation, the focus is on getting the lowest price. If there's a lot of complexity, then it becomes strategic. It's like a swinging pendulum."

Although there's no simple solution, IT managers aren't without some leverage. Some have sharpened their negotiation skills to get the best price; others play multiple vendors off each other, while still others have opted for building a close relationship with a single vendor willing to bend over backwards for them. In addition, new technology approaches, such as information lifecycle management (ILM), tiered storage and cross-platform storage management, promise to help managers lower their acquisition and usage costs.

"What I've learned is that storage has different characteristics and data has different qualities. Spreadsheets don't need the same storage characteristics as X-rays," says John Halamka, chief information officer at both Harvard Medical School and Beth Israel Deaconess Medical Center in Boston. By using a tiered storage and lifecycle management approach and committing to a single storage provider, "my total cost of storage is less today than when we were negotiating with multiple vendors," he reports.

Preliminary data from a recent study by TheInfoPro Inc., a New York City research network, suggests that a growing number of companies are opting for Halamka's single-vendor approach. "We're finding that almost 70% of respondents now want one storage vendor," says Ken Male, founder and chief executive officer at TheInfoPro. The reason, the InfoPro study suggests, is vendor accountability. "If there's a problem, the company wants one throat to choke," notes Male.

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.

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.

Single vendor storage environments
In its mixed storage report, Gartner predicts that "consolidation, continuing compatibility issues and staffing shortages will cause multi-vendor storage deployments to decrease 20% by year-end 2008." Gartner identifies the economic benefits of a single-vendor strategy as follows:

  • It eliminates the need to train staff in multiple storage systems.
  • On the operational level, storage administrators don't have to develop and maintain multiple automation scripts.
  • It avoids the need to migrate data between storage systems whenever a different vendor is the low bidder.
  • A vendor is likely to be more responsive to a loyal customer.
By committing to a single vendor, EMC Corp., Halamka was able to streamline his institutions' entire approach to storage and "save about 20%; plus we were able to greatly reduce downtime, which is also costly," he says. In the process, he avoided the finger-pointing encountered when there are multiple vendors.

You can still come up with a good acquisition price with a single storage vendor, but it will take some effort, starting with training the negotiator. A trained negotiator can achieve a better deal with a vendor than an IT manager who's distracted by other concerns and who must maintain a relationship with the vendor, says Gartner's Passmore. The trained negotiator may be part of the organization's professional purchasing group or an IT person who has received training in large acquisition negotiation.

Not all IT managers agree that trained negotiators can do better in a single vendor situation. "I get a better price than purchasing," says Todd Berube, Windows server engineer for the City of Orlando, FL's Windows servers and storage. Berube is responsible for the city's extensive Windows systems infrastructure. Orlando has standardized on Dell Inc. and EMC for Windows servers and storage. Although the city's purchasing department may have professional negotiators, "I have a better day-to-day relationship with the vendor," Berube says. "I'm purchasing devices every few months. I know the industry and the timing."

When to buy
Berube times his orders to coincide with the end of the vendor's fiscal quarter. "If I hit it right, I can get an extra 10% off," he explains. That discount is on top of whatever discount the professional negotiators had previously negotiated at the state and city levels, which typically start at 20% off list price. If he's doing a particularly large buy and hits the timing right, Berube does even better--perhaps 30% off the usual price.

By relying on the single-vendor relationship, Berube finds he'll get a better overall deal when buying storage systems consisting of components from multiple vendors, even though he might be able to buy the individual components for less. But there's a price, he's discovered, to making the individual pieces work together.

For example, the city recently purchased a virtual tape system consisting of an EMC Clariion disk with a third-party virtualization product as well as some other third-party components. "We could have negotiated for the pieces individually and saved, maybe, $15,000 over the turnkey package price our vendor offered," Berube says. But after figuring the cost of the professional services the city would have needed to integrate everything and then support it, "we would have paid a lot more in the long run and experienced a lot of finger-pointing by the different vendors whenever something failed," he says. The value of having one vendor assume responsibility for everything was worth paying more initially.

Avoiding vendor lock-in
The third part of the storage hat trick, after acquisition price and ongoing cost of ownership, is avoiding vendor lock-in. "The vendor's natural impulse [is] to try to achieve customer lock-in," says Passmore. Lock-in is abetted by the vendor's drive for product differentiation and the lack of standards and tools, which make it difficult for organizations to make storage products from multiple vendors work together.

Try as he might, Kilcourse couldn't avoid vendor lock-in. In the case of Longs Drugs, the company had storage from EMC, Hitachi Data Systems and IBM Corp. The crisis hit when Longs Drugs started to upgrade its storage. "We wanted to avoid buying new frames. We wanted the ability to upgrade components inside the frame, and we wanted the frame to support multiple devices, even from third parties," says Kilcourse. Longs Drugs finally standardized on Hitachi, which offered the most flexible storage--but that wasn't where the lock-in occurred.

The lock-in came later, at the storage management level. "You have to decide at what point you're willing to get locked in," says Kilcourse. He believes the only way to mitigate lock-in is through storage management software, which becomes a form of lock-in itself. "You want a flexible, standard storage management platform. You'll be locked into the storage management platform, but if you picked the software well, you'll have the most flexibility," he says. At the time, Longs Drugs chose Tivoli storage management. With a broad storage management framework, you can add storage from multiple vendors, which the staff can manage without having to acquire an entirely new set of skills.

Gartner came to a similar conclusion in its recommendation for organizations following the two-vendor storage strategy: "The trick to minimizing operational expenses is maintaining compatibility. In an ideal world, the arrays would have similar functionalities and compatible APIs ... SAN management, SRM [storage resource management], snapshot, backup and replication management tools would all use wizards for common look and feel, and would passively and actively manage both vendors' arrays. Finally, migration tools would provide transparent dynamic movement of volumes between the vendors' arrays."

Unfortunately, it isn't an ideal world. The SMI-S interoperability standard is a step in the right direction but in its present version "there appears to be more missing from SMI-S v.1 than [what] is in it," says Gartner's Passmore. "The value-added features unique to each storage device will always emerge in front of the standards. Managing these features will require non-SMI-S tools or nonstandard extensions to SMI-S," he notes.

Even storage virtualization doesn't eliminate vendor lock-in. "The hype suggests virtualization is great, but we haven't seen that," says Passmore. "The only way to avoid vendor lock-in today is to utilize lowest common denominator storage."

Theoretically, virtualization could help, but it comes with a lot of "ifs." In Gartner's mixed storage report, Passmore writes: "If the virtualization box replaces the value-added software in the back-end arrays, and contains its own cache, then having those features in the back-end arrays is a waste of money. And if the user is using a virtualization box to gather up existing arrays, then the investments already made would be lost for the remaining life of the box. This leads to a simple conclusion about the disk behind arrays--it should be basic RAID disk, without volume management, snapshots, replication, cache or any other features that would be duplicated in the higher-end array." And those basic disks should be put into the virtualizing array to avoid the added cost of another cabinet with controllers and power supplies, he adds.

Virtualization ultimately negates the advantage of a multiple vendor strategy. "The variation in price between vendors offering comparably configured arrays is mostly found in the value-added software and services," Passmore notes. "This means that most of the cost advantage gained from multiple storage vendor deployments will disappear when the software is single-sourced in the virtualization box."

Savvis Communications, a Town & Country, MO-based IT infrastructure managed services provider, turned to what it refers to as virtualization to help lower its storage costs as part of an initiative to reduce overall infrastructure costs. "Virtualization lets us decouple a logical service like storage from the physical implementation," says Bryan Doerr, Savvis' CTO.

Doerr's approach puts all the storage capacity--220TB at last count--in a single pool and then uses thin provisioning, not virtualization, to allocate the storage as needed. Virtualization usually describes capabilities that mask the differences among various vendors' arrays, but Savvis is provisioning disk within a single vendor's--3PAR Inc.--array. Other vendors, such as Zetta Systems Inc. (acquired by Overland Storage Inc.) and Network Appliance Inc., with its FlexVol capabilities, offer thin provisioning.

"We can create logical volumes for a customer, but we only allocate actual disk to the customer as it's being written," Doerr explains. Customers pay only for the storage capacity they actually use. This lets Savvis avoid having to overprovision each customer's storage, which can save the company money.

New approaches
Besides virtualization and thin provisioning, there are other technologies that can lower storage costs. Specifically, ILM and the tiered storage that accompanies it may allow storage managers to take maximum advantage of the price/performance characteristics of various types of storage, effectively lowering overall storage costs.

Beth Israel Deaconess Medical Center believes it can save big through ILM and tiered storage. When a patient enters the hospital for treatment, medical data is critical and must be kept where it's immediately available. That requires high-performance, high-cost storage with 99.999% availability. Shortly after the patient has been discharged, the same data can be safely shipped off to lower cost, lower performing storage.

"The key to saving money is to determine what data needs five-nines and what needs three-nines," says the hospital's Halamka. Having made those determinations, "I now have clouds of different classes of storage allocated as needed based on the service level required," he says. That allows him to buy less of the highest-priced EMC storage.

In the end, there's no inclusive best way to reduce storage costs. If people resources are limited and storage skills are hard to come by, stick with one vendor and improve your negotiation skills. If you have multiple storage vendors, strive for as much compatibility as possible between platforms and look for cross-platform management tools that provide a common look and feel, as well as broad hardware support. In all cases, try to categorize your data according to required service levels to reduce the need for the most costly storage. And never pay list price. "Even an idiot can get a 20% discount," says Kilcourse.

This was first published in February 2006
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