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Storage vendors: Where's the value proposition? |
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By Marc Staimer
08 Aug 2005 | SearchStorage.com
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Twenty years ago, there was a notorious fast food hamburger restaurant commercial with the tag line: "Where's the beef?" It implied that their competitors did not deliver much in the way of actual hamburger on their menus… the underlying assumption being more beef is better.
I use it here to emphasize that few vendors actually articulate clear, quantifiable value propositions for their products. In other words: "Where's the value proposition?" Most vendors assume their customers will understand the value proposition intuitively or that it does not matter.
News flash: it matters. This is especially true when it comes time for the economic decision maker (such as the CFO) to sign the purchase order. He/she will want some justification for the CapEx or OpEx. Providing the answer "because we need it," with little actual supporting financial justification, typically provides a response of, "Not until you can build a case for it." This means delays in purchase, implementation and benefits, assuming there really are any.
For the first half of this year, I sat through more than 70 vendor product presentations. I can count on two fingers the number of times there were demonstrable, quantifiable value propositions. Many times, the vendors touted features as benefits while skipping the value part entirely. (Note: features are not benefits and may have neither benefit nor value.) Many vendors say their products are better than their competitors'. That's nice, except it assumes that their competitors have clearly articulated their value proposition to the market (bad assumption.) Few people remember that the original value proposition of a SAN is consolidated shared storage. This means higher storage utilization (lower CapEx), fewer storage assets to manage (lower OpEx) and simpler DR, business continuity and overall storage management (lower CapEx and OpEx).
Quantifying value is harder than it seems. There are many issues and it takes time. I understand that when you are up to your neck in alligators, it is hard to remember your original purpose was to drain the swamp. However, before buying any network storage product, it is prudent to make sure the vendors have quantified the value of that product for your environment.
All value proposition quantification must be validated. This means the premises or assumptions must be correct. The arguments and formulas must be clearly understood, logical and sound. The conclusion (quantified value proposition) must follow the arguments. In other words, there should be no leaps of faith.
The value proposition will usually be couched in terms of total cost of ownership (TCO), payback (most CFOs prefer payback) and return on investment (ROI). These are comparative values against current or alternative products. The key will be the assumptions. One incorrect or absurd assumption will invalidate the results. Many payback and ROI calculators are based on reducing downtime or OpEx savings that will be difficult to prove or capture after the fact. Do not be afraid to get the promised quantified value proposition in writing. If possible, get it in a measurable service level agreement (SLA) with refunds based on missed targets.
Quantifiable value propositions means proposed network storage products have internal credibility. That credibility increases if the results match or beat the prognostication. My recommendation is to always insist on quantifiable value propositions. Some vendors will be unhappy with this demand; some vendors will step up to the challenge. In the end, you'll end up with a better product.
About the author: Marc Staimer is president and CDS of Dragon Slayer Consulting in Beaverton, Oregon. He is widely known as one of the leading storage market analysts in the network storage and storage management industries.
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