HP to offer pay-as-you-go storage
CMP Media Inc. - Saturday, March 04, 2000
Mar. 03, 2000 (Computer Reseller News - CMP via COMTEX) -- Palo Alto, Calif. -
A pay-as-you-go capacity expansion program for Hewlett-Packard Co.'s XP256
storage array could make it easier for VARs and storage service providers
(SSPs) to sell storage to enterprise customers and keep those enterprises
coming back for more, said resellers and analysts.
Under HP's instant Capacity On Demand (iCOD) program, the XP256 can be
installed with as much capacity as the customer expects to use that quarter,
said Craig Nunes, product and solutions marketing manager at HP's Extended
Platform Storage Organization.
A key driver is the speed at which the storage capacity of dot-coms grows, said
Nunes. "These are customers who want to start out with a small amount of
storage but are growing fast," he said. "They can't afford to pay for that capacity
up-front. And they don't want suppliers coming through each month."
HP's iCOD program is slated to start April 1. For the first two months, iCOD will
be sold and installed via HP's direct channels. Starting in June, it will be open to
resellers that will help customers plan capacity expansion and take their orders,
Nunes said. HP will work on-site with resellers to install the expanded capacity.
HP's iCOD is a great alternative to working with SSPs, said Amy Rao, chief
executive of Integrated Archive Systems Inc., Palo Alto, an SSP and storage
reseller. "HP is understanding that storage is the bulk of the IT budget today,"
Rao said. "HP is trying to figure out how to compete with EMC [Corp.] and is
doing a good job."
Customers' storage needs are booming, and the pay-as-you-go model could help
vendors and resellers by locking enterprises and dot-coms into the vendor's
hardware, said Dan Carson, vice president of marketing at Open Systems
Solutions Inc., Yardley, Pa. "Customers are not going to leave," he said. "There's
no need to visit a customer's site. Just unlock the storage."
However, Carson said he is concerned customers could end up paying for
today's storage at yesterday's prices.
Pay-as-you-go programs often are just smoke and mirrors, said Carl Wolfston,
director of Headlands Associates, a Pleasanton, Calif.-based reseller. "If I can
control it, buy four or five disks at a time and control costs, what's the
difference?" Wolfston said. "It's a price game."
Pricing will depend on the creativity of the deal, said Steve Duplessie, analyst at
The Enterprise Storage Group Inc., Milford, Mass. "If [it] is not economical, the
deal will go to someone else like EMC," he said. "Customers will pay a premium,
but no one will let HP get away with crazy premiums. . . . If I was the channel, I'd
love it. You get incremental sales down the road without having to do much more
work."
To a degree, programs such as iCOD help SSPs set up pay-as-you-go
programs, Duplessie said. "SSPs won't pay a premium," he said. "They'll get the
full box but pay only for the increments they use."
Several vendors, including Compaq Computer Corp., Sun Microsystems Inc. and
HP, currently offer pay-as-you-go-type programs, but they typically are handled
through the vendors' finance departments and are more like leasing programs
than iCOD, vendors and resellers said.
crn.com
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