Disk Drives and Razor Blades

This year, Gillette announced the Fusion razor, which has 5 blades.  One can pick up the handle for the razor and a few blades and not spend more than ten bucks.  Then, when you need to buy replacement blades, it costs you about $15-20 clams, getting you 10-15 blades.  It's captive customer selling; once you have the handle, you need to buy the blades and those blades will cost you a chunk of change.

The same thing goes for disk systems.  There is nothing more appealing to storage system sales rep then selling a frame that is less than 100% full of disk drives, because, more than likely, the customer (that's you) will buy the additional capacity at a later date.  And, you may pay dearly for the additional capacity.  So much so, that you may even be compelled to buy another frame, again less than 100% full. Disk drives sold into existing systems are like razor blades, it's a captive customer sale.  Often customers never even ask for two quotes from their preferred system vendor; one quote, with the capacity that they need (system is than 100% full), and one with a full system configuration.  The differences in these quotes may shock you, in fact, I know they will shock you.  My quick estimate based on a variety of quotes I have seen during the past three months is that on a relative basis, customers can save upwards of $2,000 per terabyte if they bought a full system as opposed to one that is configured at 60% of capacity.  This number per TB can increase if you tack on the premium that the vendor gets when selling you the additional 40%.  These numbers can add up fast.

A few suggestions to help manage the razor blade approach by storage vendors:

*        On your next system buy, get two quotes and calculate the difference.  The (potential savings) can help increase your immediate budget to buy a full system now.  (I know a lot of capacity is bought based on budget.  But, IT gets no budget leverage when they do not ask for a full system quote.)

  *        If you have frames that need more capacity, obtain capacity upgrade quotes separate from any other line item.  No software, no services.  Just the additional drives.  Then, you can isolate the vendor and push back.

  *        If you need to buy a new system vs. new capacity, buy the new system, full.  If you can migrate data from the first (non-100% full) system to the new one, trade the old one in to offset the price of newer box.  Try and work the vendor for free migration services in return for buying a newer box.

  *        Ideally, you can get to a point where the initial system capacity and the upgrade capacity are the same cost on a per TB basis.  Then, you can buy what you want, when you need it.

Understanding the parallel between disk drives and razor blades could save you money and create budget leverage.  Buying more upfront can cost you less than splitting up your capacity related purchases.  I now buy all my razor blades at Costco and still pay a fortune.  Disk drives will never go wholesale, but if you spent to increase your visibility into how the big systems vendors work, you may very well be able to level the playing field.