With so many storage vendors facing slowing product demand and thinner profits there is no doubt the environment for storage customers is far different from a few years ago. But what does storage malaise translate into in terms of dollars and cents leverage for storage customers?

Mike Kahn of the Clipper Group, a consultancy that focuses on storage procurement strategies, says, "If there was ever a time to be aggressive this is it -- vendors are hoping for every bit of revenue they can get." However, he cautioned, "you won't find people making profitless deals -- it is a profit game now and you can only squeeze the lemon so far."

Michael Karp of Enterprise Management Associates, an analyst firm, offers similar suggestions. "I think buyers will find more flexibility among hardware vendors because they have stuff on the shelf and their inventory costs are higher than software vendor," he said. But Karp cautions against expecting big cash discounts. Instead, he says, vendors will be more likely to offer extended free support and similar ancillary products.

"This is also a good opportunity to strengthen your relationship with your vendor," he said.

Stan Zaffos, an analyst with Gartner Group suggests that the current state of technology also provides leverage since "a lot of software functionality has become ubiquitous and no longer provides as much differentiation between vendors." Thus, he says, there now many possible combinations of vendors

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and architecture to get a desired level of functionality. Zaffos also agrees that vendors may be willing to offer discounts on hardware but suggests that they will be willing and able to offer discounts on software that are "more creative."

For more information:

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  • Alan Earls often writes about things NAS and SAN in his weekly "SAN/NAS Update: Trends" column. View the latest
  • About the author: Alan Earls is a freelance writer in Franklin, MA.


    This was first published in October 2002

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