When Software Defined Storage (SDS) is sold using the same, old business model, it effectively nullifies the flexible advantages of SDS. It’s time to take advantage of new business models to unleash agility and innovation.
When discussing Software Defined Storage (SDS), the attributes usually discussed are agility, flexibility, and hardware independence. These are certainly important advantages of SDS, and some would say are part of the definition thereof. By decoupling the hardware from the software, SDS is able to scale more easily and efficiently—both up and down—in all important respects: capacity, performance, and number of users. The result is increased business agility, thanks to the ability to rapidly respond to changing business needs such as launching new revenue generating applications or economizing during difficult times.
But there is an equally important aspect of SDS that is rarely discussed, and it needs to be discussed because without it the promise of business agility is an empty one. That aspect is the business model implications of SDS. After all, traditional, hardware based storage is sold using a rigid approach. In this approach one carefully selects a product, pays fully for that product, and keeps that product for a number of years. Once that product becomes fully utilized or obsolete, the selection process begins anew.
Because changing from one product to another—even another product by the same manufacturer—is expensive, disruptive, and time consuming, one must select very carefully and avoid mistakes. This means spending many months determining one’s future storage requirements, comparing the specifications of various products against those requirements, and performing tests on those products to prove they meet the requirements. In general, it also means over-purchasing both capacity and performance, to be on the safe side and to reduce the risk of having to migrate to a new product too soon.
3 Business Features that Can Maximize the Benefits of Software Defined Storage
This traditional business model is not compatible with agility. It involves a long cycle for research, testing and procurement. It discourages making changes on a scale that is measured in units of time shorter than a year. And it penalizes businesses for utilizing their storage devices to their limits. As a result, when SDS is sold using the same, old business model, it effectively nullifies the advantages of SDS and makes it far less attractive than it can be.
Instead, SDS should be offered using a business model that matches and even emphasizes the benefits that SDS brings. Accomplishing this involves a number of features.
1. Flexible technology demands flexible pricing
First, because the strength of SDS comes from its flexibility, it should come with a pricing scheme that is itself flexible. In fact, it should be elastic, i.e., flexible in both directions—up and down. In other words, SDS should be priced based on the actual and variable consumption of the storage. If the consumption goes up, so should the price. Similarly, if consumption goes down, the price would as well. The more granular the time unit, the more agile the customer can become. This is not science fiction; in public clouds today we see not only per-hour business models but also per-minute. There is no reason why the same metered approach cannot be employed in private environments as well.
2. No more paying up front
Second, the customer should not be made to pay up front for the storage. Paying in advance locks the customer in and prevents agility. The customer must amortize or depreciate the storage over a period of time measured in years. If the customer wants to replace their storage before the equipment is fully depreciated, he or she must write down the remaining value. This write-down reduces the customer’s apparent earnings and is frowned upon by investors. It is, in effect, a penalty for using capital equipment for too short a period. And yet, changing business conditions sometimes mandate exactly these types of unforeseen changes. With a pure operational expense (OpEx) model that features a zero acquisition cost, customers are free to make the choices they need to make to make their businesses thrive in a competitive environment, without being constrained by long-term accounting constraints.
3. Easy expansion
Third, expansion—to an exabyte and beyond—should be quick, easy and non-disruptive. Such an approach would break the research-buy-depreciate-repeat cycle which locks business into multi-year relationship with hardware that may be at maximum capacity or obsolete sooner than expected. Easy expansion with no limit in sight means the ability to focus on near-term needs and, when those needs change, respond to them with grace and speed. Because near-term needs are far better understood and predicted than long-term needs, the result is far better spending efficiency. One’s euros or dollars are always spent on actual needs, not on potential future needs which may or may not materialize.
Stop Buying Storage!
In summary, to get the most out of Software Defined Storage and fully benefit from the flexibility and agility which it endows, one must be able to consume it using a business model that is equally flexible and agile. By enabling businesses to fully utilize their assets and rapidly respond to the needs of the market, the combination of SDS technology with a business model that is consumption-based, requires no up front payment, and allows for rapid and non-disruptive expansion, has the potential to unlock business value and unleash innovation at a speed that was not before possible.
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