#130 – Making Money in the Storage Business

#130 – Making Money in the Storage Business

Chris EvansAll-Flash, Garbage Collection, NVMe, Storage Hardware

This week, Chris and Martin reflect on changes in the storage industry and the ways in which vendors can make money from storage hardware and software. It’s been a tough time for storage vendors of late and the discussion starts by looking at the challenges of making money in a market where components are commodity and decline in price each month.

How should vendors adapt to these challenges? There are alternative strategies than simply piling it high and selling it cheap (although that is one model). All-flash systems offered the ability to charge higher margins, but even this approach is being challenged with the availability of cheaper and higher capacity flash drives.

Another option is to change the financial model and sell either based on consumption or entirely as a service. These options themselves are tricky to implement because the vendor has to persuade the customer to lengthy commits or second guess how the customer will use the hardware onsite.

Finally, Chris and Martin discuss the idea that perhaps a “pure play” storage vendor isn’t a long-term strategy and really, what customers want to buy is solutions. This means packaging CI, HCI or even containerised solutions that integrate with storage platforms.

Elapsed Time: 00:37:25


  • 00:00:00 – Intros 00:01:50 – This is a tough market for storage vendors
  • 00:03:00 – Hardware is good enough to build your own
  • 00:03:45 – HDDs are capacity-only products
  • 00:04:30 – The flash market is also on a price reduction curve
  • 00:05:00 – Are the 3-year refresh cycles over with flash systems?
  • 00:06:30 – Has Open Source had any impact on enterprise storage prices?
  • 00:07:40 – So how can vendors make more money?
  • 00:09:15 – Support organisations have been cut back – why?
  • 00:11:00 – Is the price of consumer drives over-priced to compensate for hyperscalers?
  • 00:12:30 – NetApp are releasing a SAN-only version of ONTAP
  • 00:14:15 – What is “cheap and deep SAN”?
  • 00:17:20 – On-premises storage allows businesses to “sweat the asset” more
  • 00:18:15 – Cloud is changing the model of consumption 00:20:00 – How much will vendors make out of hybrid?
  • 00:23:00 – How about economies of scale – just sell more stuff?
  • 00:24:40 – New hardware components could allow vendors to add value
  • 00:28:45 – New pricing models (SaaS, Subscription) could change vendor revenue
  • 00:30:30 – Perhaps a pure-play storage company is a bad idea? 
  • 00:32:20 – Own the architecture, ecosystem, platform 00:35:30 – Wrap Up

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