The question is always this is the market ready for this? 75% of our mainframe customers already use a scheme like this, and now they’re asking for something for storage, said Unisys.
Unisys’ scheme is dubbed Real Time Storage and is being offered only in Europe at present, on EMC Corp disk hardware. Unisys said it plans to extend the scheme to cover Hitachi Ltd hardware. Two customers in the financial services industry have already signed up for the scheme, between them taking on around 200TB of capacity.
The scheme will see the company help customers forecast their total disk capacity needs for time periods of four years, and then install enough disk to cover all of their needs for that period.
Customers will pay for whatever disk capacity they have allocated to applications, at prices ranging from $0.55 to $1.20 per GB-month, including all replication, management and other software. From day one, customers will be able to spread data across all of the spindles or disks installed by Unisys, in order to maximize performance.
Unisys likened the scheme to a phone card, and said that if customers had not consumed all of the GB-month capacity they had paid for before the end of their contract period, they would be granted a three-month extension. That implies that there will be no rebates.
Given that disk prices are continually falling, the process of buying all four years’ worth of capacity up-front might seem expensive. Unisys insisted however that it can acquire storage cheaper than its customers because of the volume of its purchases.
It also argued that customers’ standard practice is to decommission and replace disk arrays after around four years, along with all the disk drives bought during the life of the array.
Doug Chandler, analyst at IDC stressed that he had not studied the Unisys scheme. But he said: I’d like to see a cost breakdown. It’s not obvious how this saves money.
Chandler said that some customers may appreciate the ability to account for disk costs as operational rather than capital expenditure. Other vendors offering utility disk pricing schemes have also highlighted customers’ ability to increase or decrease their capacity at will.
The huge majority of customers still buy rather than lease disk hardware. According to Chandler, there may be more demand for utility-style pricing than suppliers are prepared to meet. If vendors get enough requests, they’ll launch a scheme. But they’re not going to make it widely available, he said.
Sales people are incented to sell boxes. Pre-buys and metered usage makes sales complex. And there’s a genuine concern that if enough customers get an idea into their heads to pay only for the capacity they use, there could be even more issues for vendors.
One major disk array supplier that did not want to be named told Computer Business Review that metered storage makes life difficult for suppliers because it creates problems recognizing revenue.
The vendor also said that suppliers who offer metered storage can run into conflict with customers over the amount of excess or buffer capacity to be installed at customers’ premises something that vendors may want to minimize, and customers maximize.
Also, suppliers make hay when customers step beyond pre-determined capacity limits, this vendor said. That’s when customers get stuck.
