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Time to get real about TCO

Editorial Type: Opinion     Date: 05-2015    Views: 2126   





Jason Phippen, Head of Global Product Marketing for SUSE explains why organisations must fully understand the true total cost of ownership for mass storage and why open source, software defined storage cannot be ignored

If you search on Amazon.com for books on pricing strategy, you'll find no less than 15,000 separate listings. Without a doubt pricing strategy is a complicated subject, and for tech vendors practically a science, if not an art. Big brand storage suppliers have legions of specialists working on pricing, trying to make their offer as compelling as possible and getting out the marketing megaphone to make sure potential buyers hear their most compelling offer first - whilst being, at best, a little coy about the less attractive features and hidden costs that sometimes lie down the road, hidden in the small print.

The fact is that pricing strategies work. Consider the famous HP personal printers of the 80s and 90s: the chassis was priced at rock bottom and consumables at a heavy premium, thus ensuring that buyers paid a lot more over the lifetime of the printer than they did upfront.

For this reason, rather than comparing products and services on the basis of marketing messages, which by their nature are never going to tell the whole story, IT buyers have long been used to calculating Total Cost of Ownership (TCO). This is a full examination not just of what something costs when you buy the item or services, but the running costs and upgrades that can trip you up down the line. A solid TCO examination can make you think twice and change your mind - and your supplier along with it.

At SUSE, we are making a bold, radical pricing claim: open source software based on Ceph, running on commodity hardware, is the cheapest way to run mass storage. And when I say cheaper, I mean cheaper not just than proprietary suppliers like EMC and NetApp, but also cheaper than mass storage in the cloud through providers like Amazon. I need to be open at this point: I am a marketing professional, and I know that you are probably already thinking that I would say that, wouldn't I. That's why we asked independent market analysts IT Brand Pulse to put our claims to the test - and what they discovered makes for compelling reading.

You might well expect open source to be cheaper than arrays from the likes of EMC. That's hardly a surprise. But would you expect a lower TCO from SUSE than Amazon Glacier? I expect not. IT Brand Pulse approached channel suppliers with an RFP with requirements over a five year period, including the volume of data to be stored initially and the expected growth rate. Then they made a cost comparison between similar arrays from Dot Hill, EMC, NEC, NetApp and the Amazon Glacier service with its claim of costing just $0.01 per GB, alongside the SUSE offer. The vendors were compared on the following criteria:

= Hardware product cost, the purchase price for a storage array chassis, servers and hard disk drives
= Recurring software license fees including any and all applicable fees for software
= Recurring annual service and support fees based on the cost of a service agreement providing 24 x7 on-site service and spares with 4-hour response time.

The most expensive brand based on TCO in our test was EMC, followed by NetApp. Even though Amazon's claim of $0.01 per GB is absolutely true, our test still found NEC and Dot Hill to be cheaper. And I should add that IT Brand Pulse didn't measure what happens when you actually want to retrieve data rather than just store it, which would have had an enormous impact. If you're thinking about your mass storage, you need to fully understand the true and total cost of ownership.

Full report available at:

www.novell.com/site/docrep/2015/04/Report_for_Enterprise_Mass_Storage_Case_Study

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