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The Death of “Razors & Blades” Pricing…

Posted on March 20, 2012 by Mark Hall in Articles No Comments

The old-guard data storage and backup vendors have retained many of their habits in spite of all the recent technical innovation in the industry. Chief among them is their “razors & blades” pricing model. You know the old adage – give away the razors, make money on the blades. (If you’ve shopped for a new razor lately you’ll know that it still holds true.) The way this evidences itself in the storage & backup business is that it is not uncommon, when dealing with the old-guard vendors, to pay more for the options than for the basic arrays themselves. How do you know you’ve dealt, or are dealing, with an old-guard vendor? Here’s a simple test: take a look at the last PO you placed, or at the most recent quote you received, for a primary storage or backup solution. If it required more than 5 line items to complete the configuration, congratulations, you’re dealing with the old-guard guys. For them, almost everything is sold a la carte. Very few features are built-in, and the more features you require, the costlier the solution becomes. There are some product lines among the old-guard that require dozens of line items to complete a configuration.  It’s as though you were ordering a new car by separately ordering headlights, seats, engine, wheels, windshield, steering wheel, etc.

Why is this the case with the old-guard vendors?  There are several reasons, tradition being one of them. Another is that it can be darned profitable.  A big reason is that their “features” are often non-integrated (or partially integrated) add-ons that were added to the product mix through acquisitions, mergers or OEM distribution agreements with other vendors. Not only are these features sold a la carte, they are often separate products, sometimes developed without integration with the base array in mind at all. This can complicate the day-to-day use of their solutions because it requires dealing with multiple individual products (and subsequent multiple management consoles) although they may have been sold as “features”. The bottom line for customers is that the razors & blades approach by the old-guard vendors is costly, complex, and in the long run can be a very poor value.

The trend among the newer, more innovative vendors in the storage & backup business is toward configurations which are simultaneously simpler to configure and install, and yet are more feature-rich.  When features are built as integrated parts of the whole solution it is generally easier to install, learn & use, and is also usually less costly. All of the storage & backup solutions on the Southern Data Storage line card are like this. A full, no-compromise storage or backup solution, including support & maintenance, can be ordered with just a few line items. Among most of our select list of vendor partners there are few, if any, options, but that does not mean they are lacking in features.  Many of our vendor partners such as Nasuni, Nimble Storage, Unitrends, Veeam and NexGen are offering robust, fully featured solutions that include innovations not found among any of the old-guard vendors.  Of all our vendor partners, Nasuni is probably the most extreme example of killer functionality combined with configuration simplicity. Their solution can sometimes be ordered with just one line item.

Customers who are seeking new data storage or backup solutions have a clear choice – the complexity and cost of a la carte, non-integrated solutions from the old-guard, or the simpler, more cost effective, feature-rich solutions available from the newer innovators such as those on the Southern Data Storage line card.  To see a full overview of our vendor partners please select the “Partner Portfolio” tab on our website at: www.southerndatastorage.com.

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