Breaking the Purchasing Cycle

I once received a valuable piece of advice about responding to a changing economy: “Start giving away free what you used to charge for, or start charging for something you used to give away free.” In other words, be prepared to change economic models, which can completely change the way customers buy. There is a real challenge to infrastructure hardware companies. Cloud services have an entirely different financial model. We are seeing hardware vendors change their sales models in response. Changing the cycles of hardware purchasing can also have significant effects on customer loyalty.

The familiar purchasing model is to buy new hardware every three to five years. Most often, we replace servers and storage in different years, with networks kept much longer. In other years, we may have a budget to replace our DR environment or backup infrastructure. At each refresh, there is usually a benefit to buying from the same vendor that we bought from three to five years ago. Having a consistent management tool and support mechanism eases the upgrade process. However, the tools and skills used to manage one platform are often highly transferable to managing another vendor’s products. Often there is relatively little impediment to changing to a new vendor when we replace old with new. This is particularly so when the incumbent vendor has retired a product line, requiring customers to learn a new product even if they retain the vendor.

Storage vendors face another issue. Bulk migrating from one array to another isn’t significantly simpler when the arrays are from the same vendor. Either way, these refreshes are a forced decision point at which the incumbent vendor is reassessed. A decision to renew the relationship must be made. These wholesale replacements are very disruptive to the services that we provide. There is often planned downtime for the migration. Frequently, unplanned downtime occurs soon after upgrades, as we learn to tune and operate the new platform.

Some vendors are changing the way purchasers buy on-premises infrastructure. The first one I saw was Pure Storage, with its Forever Flash program. This program acknowledges the falling cost of flash storage. It also removes the decisions around a hardware refresh. Pure Storage allows customers with specific levels of paid-up maintenance to replace their entire array every three years at no additional cost. This means, effectively, a new array every three years without a large CapEx. Pure has a philosophy of continuous, non-disruptive, in-place upgrades. No bulk data copies from one array to another when the “new” array is deployed. Rather, the upgrades are a series of component replacements until the entire array is replaced every few years. This gradual and “free” upgrade means that there is never a trigger for reevaluating the storage platform. Customers will keep rolling over the maintenance on their array forever, and no other storage vendor will get a look in.

Other vendors remove the need for a wholesale refresh by staggering purchases. This particularly applies to hyperconverged vendors. Conventional infrastructure includes enough hardware for three to five years of growth, all paid for in year one. HCI customers buy enough for a shorter growth horizon, typically six to twelve months, and then buy more capacity slowly over time. This aligns spending on infrastructure with the value delivered by that infrastructure. Each purchase involves a small decision to remain with the HCI vendor for another three to five years. Naturally, each individual node will need to be replaced every three to five years. But this phased replacement means there is no large-scale decision point at which the client can change vendors with little penalty. Some customers will be even more bound to one vendor, as they must extract value from the latest purchases before considering replacement. If there are nodes being replaced every year, then moving off hyperconverged will always cause unacceptable loss of value. Again, we have customers who aren’t automatically reevaluating their infrastructure supplier.

These innovative purchasing models that are offered by newer infrastructure vendors can be very advantageous to businesses. Aligning the cost to the value and making upgrades seamless are big benefits. Removing the need for wholesale hardware replacement will deliver a more consistent platform. This consistency allows operations staff to gain mastery of the chosen platform. Just be aware that these benefits come at some cost. Whereas you never needed to think about when to reassess suppliers, now you might need to make a conscious decision. The platform that was the right choice when it was selected six to ten years ago may no longer be the best choice for your business. The great news is that if it is still the right platform, you have avoided significant upgrade pains.

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