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IBM financing plan makes SANs more affordable

A new financial package from IBM is geared toward helping customers overcome the biggest obstacle in the adoption of storage area networks (SANs).

The price.

A new SAN financing plan from Big Blue will offer its pre-configured storage hardware, software, switches and services at a financing rate 20% lower than the average market rate.

IBM's financing plan offers up its SAN packages at a rate of 6.3%, dropping the total cost of ownership by as much as 20%, undercutting the average market finance rate of 8%, the company said.

"We are beginning to see the activity pick up significantly now in SANs," says Jill Kaplan, director of storage solutions marketing for IBM Storage Systems Group, "We wanted to create a financing plan that was easy and painless." Kaplan said that the industry is not at the point of mass adoption yet, but IBM is trying to help expand the market.

IBM is not without competition in the SAN market and competitors such as Hewlett-Packard and XIOtech also offer financial plans. When contacted, neither company would disclose their finance rates. Price specifics for SAN financing rates are not readily available on the companies' respective Web sites.

There are stipulations and conditions involved in qualifying for the below-average interest rate, however. Kaplan said that there must be a minimum purchase of $300,000. The customer must order at least one storage tape or disk product and SAN fabric and at least one of IBM's storage services or Tivoli Storage Management products. Customers can choose from IBM's portfolio of open disk, tape and software components to build their customized SAN.

The package also accounts for customers who aren't comfortable with a one-stop, proprietary solution. "We're trying to stay sensitive to open systems and interoperability," said Kaplan. "We are able to include in the offering our competitors products. The caveat being that those products, since they are outside the SAN, would have to be financed at the standard industry rates."

John Webster, senior analyst and IT advisor of the consulting group, Illuminata, Inc., says comparing the terms and conditions of the IBM offering versus a competitive lease offering is key in determining whether the deal is the best option for a given customer. "It is true that cost has been identified as a major inhibitor to SAN adoption. Versus going with the storage service provider (SSP) model, it offers everything that on-site storage offers for users that are concerned about security."

Kaplan said that there has been a very high propensity by customers to lease recently and that IBM is offering another alternative to SSPs. "It's a question of where customers are today and where they're going and what works best," she said.

Webster said the comparison to be made from the point of view of users who shun the SSP model is the same as with any other alternative leasing arrangement the customer may already have in place for other IT infrastructure (i.e. mainframes, servers, desktops, etc.). It means comparing IBM's offering vs. competitive lease for the equivalent list of hardware, software and services.

The SAN solutions financing offer is available immediately to customers and IBM Business Partners through IBM Global Financing. According to IBM, the solutions are built around the four basic goals of networked storage: data consolidation, data protection, disaster prevention and sharing. Working with certified IBM Business Partners and SAN consultants from IBM Global Services, customers can select a SAN solution based on server platform, size of the enterprise and goals of the storage network.

The financing deal expires at the end of this year.

Let us know what you think about the story, e-mail Kevin Komiega, assistant news editor

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