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Jon Toigo 
Jon Toigo Jon William Toigo is directeur en eigenaar van Toigo Partners en voorzitter van The Data management Institute LLC.

13 december 2011 - Anticapitalist

I don’t know about you, but I am becoming increasingly agitated when I ask vendors or analysts about the obscene cost of storage products, only to see them respond with a wink and a nod. These people know storage technology is overpriced, but they acknowledge that this is just the way it is. If customers are willing to bear the burden, then the price must fit the market. It’s just Adam Smith’s free-market capitalism, they argue. Anyone who questions this is a radical of one sort or another.

Transparency
Before I allow myself to be classified as an anticapitalist, a couple of counterpoints must be offered. For one, Smith said the invisible hand that drives markets to ever-increasing efficiency only works when consumers have the facts about the investment or purchasing options they confront. Present them with several storage products, supplemented by the facts about their operational characteristics and their cost of ownership details, and consumers will make rational choices or, at least, self-interested ones. Only this isn’t happening.

Vendors

Some vendors do not submit their kits to the testing regimes of the Storage Performance Council or the Standard Performance Evaluation Corporation. While these benchmarks are not perfect, they are supposed to give some baseline data that can be used to weigh and measure storage options. NetApp likes to point out that EMC refuses to expose its gear to tests. The offending company also includes a vow of silence in its warranty and maintenance agreement that forbids customers from speaking to other prospective users about the performance they receive from the vendor’s wares. In both cases, EMC is being very naughty.

NetApp, which does expose its gear to SPEC testing religiously, nevertheless ignores the results of these benchmarks. Time and again, they state that their new gear offers ‘a 100 per cent price–performance improvement’ over the previous generation, or something along those lines, even if it doesn’t fit their own test results. They are counting on the customer not to check the claims in their brochures. Again, both of these behaviors fly in the face of Adam Smith’s capitalist values.

Distributors
The tricks of the original equipment manufacturers are topped by the self-interest of their distributors. I had dinner with a reseller recently who told me point blank that his bosses would fire him if he proposed a virtual storage solution to a customer. No, they wanted him to sell a highly priced brand-hardware-centric fix that would not actually solve the customer’s problem. The profits the reseller makes on the latter are much higher than the earnings on a software layer that enables the customer to use less expensive kits or to keep arrays in service longer.

Analysts
Then there are the analyst houses. The largest ones display the worst anticapitalist behaviour. They often propagate unscientific assessments of trends, while requiring vendors to purchase large quantities of their ‘services’ to be represented as top-of-class or magical. They lend credibility to the marketing slogans of large vendors, while drowning out the voices of innovative smaller companies who lack the coin to play their game.

Consumers
Consumers aren’t innocent either. Sometimes technically uninformed CFO’s make storage-purchasing decisions based on their ‘relationship’ with a vendor. This undermines the IT-planner’s role as a knowledgeable intermediary in appropriate technology. Similarly, IT-planners sometimes become too lazy to test alternatives or to otherwise perform due diligence prior to an acquisition. They then no longer choose the technology that’s right for them, but go with the seemingly popular technology as indicated by analysts or vendor marketing. This too is acting in an anticapitalist manner.

Excuses
I have heard all the excuses. Vendors don’t want consumers talking about the performance of their kit because these views are ‘too impressionistic’. Analysts say that they talk to consumers to arrive at their conclusions. They apparently believe such interviews provide an accurate measure, even though their contacts were based on a list of happy customers supplied by the vendor. Resellers say they need sufficient income from sales to provide employment to their staff. The decision-makers in the front office claim that, left on their own, IT folk would turn the data centre into a science fair project. And IT-planners argue that they haven’t got the budget or the resources or the time to test alternatives.

Conclusion
Adam Smith’s capitalism is not about giving free rein to the self-interests of manufacturers, be it of storage or needles. It is about creating the conditions in which the market mechanism can freely adjust prices to the level that adequately reflects supply and demand. It is not anticapitalist to criticize the ineffiency of the storage industry. But that said: perhaps it’s time to occupy storage!



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