NetApp's New Lease on Storage
byteandswitch.com
Network Appliance Inc. (Nasdaq: NTAP - message board) has created a leasing program in conjunction with systems integrator EYT that's designed to make acquiring storage capacity more like leasing BMWs.
The two companies' "storage-on-demand solutions" -- inelegantly dubbed "SODS" -- are basically three-year equipment-leasing contracts that allow customers to adjust how much storage capacity they need on a monthly basis. The advantage of leasing storage hardware, rather than purchasing it, is that a customer can choose a forklift upgrade if that's what they require at the end of the contract term, says Kevin Murphy, VP of product sales at EYT.
"At the end of three years, we'll take a look at their storage infrastructure and say, 'Is this what you need today?' " he says. "If the technology has changed, we will put new stuff in."
Jamie Gruener, senior analyst at Yankee Group, says the NetApp/EYT storage-on-demand leasing program is a harbinger of things to come, as enterprise customers demand more flexible ways to buy storage capacity.
"People get these mammoth machines, and their storage utilization is either too low or unacceptably high," he says. "These storage-on-demand programs are becoming a key attribute for enterprises, because their storage requirements fluctuate depending on the quarter -- or the week, or the day."
EYT, formerly known as Ernst & Young Technology, will target government and large corporate customers with the new NetApp leasing program. Murphy says federal and state government agencies are ideal candidates for the storage-leasing program.
"It's hard for government customers to procure things anyway," he says. "This lets them acquire what they need today without having to think about what they're going to do with this stuff in three years."
The companies did not disclose the financial terms of the deal. Murphy notes that the SODS program will be available initially only in the United States. [Ed. note: Good thing, because "sod" means something a bit different in the U.K.] Based in Chantilly, Va., EYT provides a variety of IT integration, monitoring, and hosting services.
The NetApp/EYT leasing program is similar to offerings from Compaq Computer Corp. (NYSE: CPQ - message board) and Hewlett-Packard Co. (NYSE: HWP - message board) that promise to let customers "dial up" or "dial down" their storage capacity depending on how their usage changes (see Compaq Offers 'Capacity On Demand' and HP Steps Up Software and Services).
All of the industry's players are hoping to carve out bigger pieces of the fast-growing storage services sector. Despite the decline of storage service providers (SSPs), storage services revenue worldwide is projected to grow from $26 billion in 2002 to $41 billion in 2005, according to a new Gartner/Dataquest report (see Gartner Sees Services Boom).
— Todd Spangler, Senior Editor, Byte and Switch
byteandswitch.com |
