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The summer Olympics are just around the corner and I thought I would pay tribute to the 'Games' by sharing my perspectives on activities that involve technology vendors and buyers during the buying and selling process. I do not believe that I invented the term 'Vendor Olympics' but I use that phrase often with both technology vendors and consumers. 'Vendor Olympics' involve the activities and obstacles that both of the parties go through to finalize an agreement to do business. Here are some of the events that are part of the 'Vendor Olympics':
From buyer's standpoint:
- Meeting Marathon. Managing time when your product vendor wants to do lunch, dinner, and spend hours on end 'educating' you on their ROI. The toughest part is not gaining weight from the meals.
- Liar's poker. Vendor salespeople tend to 'bend' the truth (I just experienced this with a customer I was advising) making it hard to distinguish what features are real and generally available versus which are promised. This event is getting harder as vendors blur the lines between what products are shipping and what is limited availability.
- Decathlon dialing. You are ready to make a purchase and you want to do your homework so you call a few other customers that are already using a similar product. You really want to believe them, but no two IT shops are the same. The thing that makes this event tough is there are no set rules on what to do if a reference says 'OK' things about a product (as opposed to raving about it). And, would you really expect a reference to say bad things about a product that they recently bought and are using?
- Price ping pong. Presuming you want to buy a product, you usually can negotiate and this can actually be fun. I equate it to buying a new car when you are in the showroom and the salesperson keeps going back to the boss to get 'approval' for a discount or a better finance program. I believe you actually wear down the salesperson with all that walking back and forth, and vendors tend to follow a similar pattern. You just need to have more stamina.
From the vendor's standpoint:
- Budget gymnastics. Customers set aside money for a project but there are delays, reductions, and shifts that make allocating resources a nightmare.
- Testing cycles. This is the waiting game that no one likes, but customers have to / should do 'proof of concept' testing. This is when you hope the engineers have done their job and the product actually does what everyone has been promising. If it doesn't, you don't have to worry about playing the next event.
- Finance hurdles. Your product is selected and the budget is solid. Now, you get the paperwork, but you have to go through the customer's purchasing department which is paid to hate vendors. Sometimes this event is much worse than the two before it, but then again, it is the last one and carries the best reward.
Keep in mind that the 'Vendor Olympics' are just the like the real Olympics, any good athlete (vendor or customer) wants to sucessfully participate in as many events as possible.
My background is in accounting so I have a fondness for numbers. I never met a spreadsheet that I did not like. I have parlayed my skills into a few areas in the IT analyst world, and most recently, I have built some models for customers to help justify certain investments. Some of these projects have been on the storage side and others have centered on electronic discovery related issues. Most analysts spend their time trying to help customers beat up vendors on price, but we have taken a different tactic by helping IT folks make some smart buying decisions. Here is what I have uncovered during my financial modeling:
- The biggest cost in storage is by far the amount of redundant data (multiple copies of the same information as well as the same bytes) and the amount of backups / replicas of this duplicate data. This is the source of all data center space, power and cooling, and management issues that most organizations face. ESG research suggests that the majority of users that have deployed data de-duplication are getting 10-20x. This is not surprising given the modeling I have done on how many copies exist inside an organization.
- Electronic discovery costs are linear. Legal service providers charge per gigabyte or per document. Attorneys get paid the same amount of money regardless of how many documents they review. The only way to save money is to reduce the amount of data that gets funneled into the electronic discovery process. If you want to spend less money on electronic discovery, you have to spend money on something that allows you to find data quicker and search it so that you are sending less data to service providers or attorneys for review. I am on a crusade to convince legal and IT to set aside some capital budget for IT products that can help with electronic discovery because the spending here is out of control.
- I just ran a budget for an entire storage environment. Labor was roughly ten percent of the total. I ran another one, and labor was around 5% of the total. I also gathered some utilization metrics (how much capacity was allocated and not used, how much was configured, not allocated, etc). In some cases, the cost of underutilized storage was a higher percentage of the total budget than labor. Maybe it's time to invest one or two more bodies and some resource management software (the labor is needed to set up and run the software and then do something about it).
- Backup is still growing as part of the overall IT budget, but some of this money can be saved if customers are smart with how they use it. For example, if an organization buys an archive solution with some of their 'backup' money, then there is less data in the primary environment to back up (because you have archived the stuff that is not changing). Therefore, you may not need as many media servers and certainly not the most powerful ones, and I know you pay a license fee based on how many media servers you are running or how big the servers are that run the backup software or how much data you back up.
It was a great weekend. First, I decided to fly United instead of American which meant I was actually home for the weekend - that makes the Tech Wife happy. Second, the Boston College men's hockey team won the national championship. I am a huge BC hockey fan and this year's team was very deserving of the honor. The hero of the team is a five foot-five inch Energizer Bunny (but much tougher) type of player that scores goals and is very, very scrappy. Third, I played Guitar Hero (on Wii) for the first time with some friends. The Tech Wife and I are not that good, but our friends are. Nintendo (along with other game consoles) has come a long way since Atari and Super Mario Brothers. In honor of hockey heroes and Guitar Heroes, this week's bullets reference future efforts of technology (or innovators of technology) that are needed:
- An out of the box, easy to set up home media storage system. I want my DVR (everyone knows that the Tech Wife and I watch alot of TV), my pictures, movies, etc all on the same device. I want to backup all my PCs to one place. The closest I have seen is Data Robotics solution the 'DROBO'. It is pretty clear that companies are working on this (EMC, IBM, Google, etc), but I am going to need something soon.
- A dictionary for all of the 'new age' Text Message / Facebook / MySpace terminology. And, I thought the tech industry had too many acronyms.
- Anything that improves Air Traffic Control or airline operations - please.
- Someway to make password management simpler. I hate remembering all my work and personal username and passwords. Poor doctors and other people who have to remember other important things and then figure out what their Windows login is. There has to be a better way than the basic 'password keepers' and other weak approaches. I am not saying we need 'single sign on' for the consumer, but 'consumer-izing' the RSA fob / dongle thing could be interesting.
- An online notification system for restaurants. Sometimes the Tech Wife and I fail to make reservations for dinner but we want to go to a decent place that may be crowded. Right now, we need to make a phone call and ask how long the wait is. If we could put a few restaurants on a favorite list, and check, in real time, how long the wait time is at certain places, we could make much quicker decisions and avoid the "I don't know, where do you want to go?" back and forth conversations that happen to every one of us.
I just hopped on a plane from Chicago, IL to Richmond, VA. I had a great seat, right up front, which meant I had plenty of legroom and I could get off this germ tube as soon as we pulled up to the gate. Then, the flight attendant told me and three other folks that we had to move to the back of the plane because the plane was a little ‘nose heavy’. Translated – ‘You are on a small plane and we need to move you chocolate chip cookie-eating folks to head back to the cheap seats or this thing isn’t getting off the ground’. The flight attendant did start her request with ‘No offense, but you have to move…’ None taken. I prefer to live than worry about what anyone else on this tin can thinks of my waistline. I think that line is a good idea for this list. No offense, but…
..I am bored with electronic discovery being the only real application of search technology outside of advertisements. I finally met a company that uses search to solve a different type of problem. Krugle helps developers locate code from internal and external sources. The benefits are less repetitive development, fewer patent infringements, and better quality software / microcode. …HP’s acquisition of Tower is big news. The media just isn’t smart enough to ‘get it’ and therefore customers are being mis-educated. Tower has some good Enterprise Content Management solutions but the real steal for HP was Tower’s partnership / integration with Microsoft SharePoint. Sure, some archiving solutions already support SharePoint, but Tower has taken it to a new level and added incremental capabilities that it will share with the public soon enough. ...IT has no more excuses for mailbox quotas. E-mail attachment management is making a comeback. Yep, that’s right. Because two thirds of organizations have mailbox quotas (which is just silly in my opinion), IT departments have to find other ways to handle large attachments that often burn through a quota. Thru, Inc. and Proginet are two that have caught my eye recently. If you use one of these solutions, you may not need a mailbox quota because any message with a large attachment will be sent with these solutions.
The Tech wife is back. It's time for entry number two. Again, kudos to Bill Simmons of ESPN for coming up with this idea of having his wife blog so he can watch more sports, as that is what I am doing this week.
I work in higher education, you know a University, located pretty close to the center of Silicon Valley. It's funny because I feel like we, the employees, are the cobbler's kids' without any shoes. IT in education presents a few challenges, most of which frustrate me to no end. My frustration list...
- I get an e-mail almost 10 times a week that says the same thing 'Your mailbox is over its size limit.' For me that is 700MB. My colleague gets the same e-mail that says her limit is 500MB. Why the difference? We keep deleting and archiving our messages, but to no avail. Where do I get more MB? I wish you could just buy them at Target like anything else. Instead I have to go through the IT department, my boss, etc. I bet that kid on campus that makes the fake IDs (come on, you all know/knew him/her) can probably score me some MB faster.
- My job deals with a lot of paper (Think applications, transcripts, etc). I think the paper in my office alone killed a small rain forest in Africa. There has to be a way to send these files electronically that is safe and secure. Think how many universities in the world would use this service!. Not to mention I could trash all those filing cabinets in my office leaving me plenty of room to do yoga, cartwheels and other 'work' stuff. That brings me to my next bullet...
- FILES!! When I need to get a file from 1980 I literally walk downstairs to a storage room we have named the "dungeon." This 'room' is dusty, smells of mildew, has a crooked floor (no doubt from the weight of the files) and has all records dating back to the stone age. There needs to be a way to get these files saved electronically so that they can live out their existence in cyberspace and I can access them with the click of my mouse. Thanks to my allergies (see Brian's previous blog), I avoid this experience at all costs.
There has been a lot of attention, good and bad, surrounding the collision of Autodesk applications and Wide Area File Services (WAFS) solutions. (Note: I use the term WAFS because that is what most people are familiar with, a better term to talk about the functionality is Wide Area Data Services or WAN Optimization). Two Autodesk applications, AutoCAD and AutoCAD Civil 3D, create problems for any technology that relies on de-duplication capabilities. Customers configure the 'save' features on certain application files and the applications scramble all the bytes of the file regardless of whether any changes were made. (OK, I am done with technical stuff). The problem is that when customers attempt to share or store these files, they cannot be de-duplicated because of all the byte scrambling which means that there is no way for WAFS solutions or storage de-duplication solutions to impact (or improve) performance and capacity.
To date, most of the discussion has been around WAFS because many Autodesk customers are architects and engineers that share files across remote offices and need the performance boost. It appears that all the WAFS vendors (Riverbed, Silver Peak, Cisco, etc) are impacted and are working with Autodesk to resolve the issue. While this situation may not impact your life, there are some 'read between the lines' impacts that everyone should be aware of and that will be this week's list.
- There is an application out there besides Oracle, Exchange, SharePoint and Web 2.0 YouTube stuff (I really don't know what this is, but everyone talks about it so it must be real).
- Autodesk application developers probably did the 'save and scramble the bytes' development for a reason. They probably had no idea what the downstream impact to WAFS and storage systems that have de-duplication features would be. (De-duplication solutions look for bytes that have not changed or aren't already stored and the Autodesk files would constantly trick them like they trick WAFS.) It proves that no matter how functional the acceleration and de-duplication products are, there needs to be application knowledge.
- There will likely be more applications that collide with what WAFS and de-duplication vendors are trying to do. I think this is a very good thing because the application developers will soon understand that what they do will impact the underlying infrastructure.
- Prior versions of Autodesk applications did not create this issue. It only happened after upgrades to a more recent version. Customers should ask questions about how files are saved, transported and ultimately stored when they are thinking about application upgrades. This line of questioning can help preserve investments in WAFS and de-duplication products.
- It is clear that WAFS solutions like those from Riverbed and Silver Peak are adding significant value for Autodesk customers. (If they weren't adding value, losing the benefit wouldn't be headline news and I would be blogging about college basketball right now). I am sure that these solutions can do the same for other applications and ESG has seen some of them in action via our Lab group. If you want to make the most use of your existing bandwidth, whether it is for application file sharing or for remote replication, WAFS makes a ton of sense (translated - you want to do these things but don't want to buy more network capacity. Therefore the only way to do them is by buying something that makes the network bandwidth you have more efficient).
It is allergy season in California and the Tech Wife is miserable. I am miserable too, but mine could be allergies or a sinus infection. Regardless, neither is fun, making this time of year anti-climatic. It is great that 'winter' (I am using quotes because California, in my opinion, does not really have winter.) is finally over, but it is hard to enjoy the trees and flowers blooming when you are sneezing every fifteen minutes. This whole situation got me thinking about things that I would be allergic to if I were an IT consumer. (It's a fun list this week because I am doped up on Benadryl.)
- 3 year hardware warranties. If you extend them, the vendors make you pay a fortune. If you do not extend them, you are buying more stuff. Sometimes a fourth year just makes life easier.
- 90 day software warranties. Who installs enterprise software in 90 days? You might as well prepay maintenance for three years because the initial warranty is useless.
- Any vendor presentation that shows a financial services customer as a reference. Yes, I want to run my business like Bear Stearns and Countrywide. (I would prefer a vendor that has a customer in the high performance computing industry. Those organizations beat up products really good so if your product makes it through, it must be decent.)
- Buy 2 boxes (servers, storage, etc) and get the third one free. 'Buy one, get one' deals are best left for supermarkets and other retailers. There is something wrong when a vendor starts throwing in extra equipment just to get your attention. I am all for throwing in software, but extra boxes crosses the line.
There are a lot of things that are changing to solve these allergies (Software-as-a-Service, etc), but until vendors hear more sneezing at these tactics, nothing will change.
Let’s not kid ourselves, we are in a recession and bad news is all over the place. Credit risk, Bear Stearns, and other headline stories are making for a morbid beginning to 2008. I am already looking for the bright side of this ugliness and hope that I never hear the word ‘subprime’ again. The current worldwide economy will impact IT budgets and ESG is already receiving inquiries that revolve around customers getting the most for their money. Here are some ideas on solutions that may help you weather the IT recession storm.
Data de-duplication/compression anything. Our research suggests customers are getting between 10 and 20X data reduction from these solutions which means they don’t have to buy as much storage capacity. Wide Area File Services or Wide Area Accelerators. These solutions help maximize existing bandwidth by intelligently identifying the bytes that have already been sent from one site to another and never resending the same bytes twice. There is a much more technical explanation, but I will let the vendors tell you all about it. These solutions make remote office application performance better and facilitate disaster recovery without requiring a huge pipe between two sites. Thin provisioning. You can trick applications and databases into thinking there is more storage allocated than there really is. The best part is tricking the administrators who always ask for more than they need. You can avoid wasting storage. Server virtualization. Enough has been said on this topic. Power and cooling savings and reduced hardware expenditures make this an easy investment to rationalize. Try and use anywhere that is feasible. Search/review/archiving software. These are electronic discovery process staples. If your company does business in the United States, you will be looking through e-mails, files, backup tapes and a host of other data sources. It is only a matter of time. You can either pay attorneys by the hour to read files manually or make an investment to automate some of the process. You may actually be able to use some of this technology for other things which makes it easier to justify.
There are probably more that I cannot think of right now, but this list should get you through the next couple of months. Think positively.
This one is going to be quick because I am on the road again and the time zone (plus the bars) are killing me. I could have lied and said I was really too busy to blog, but what would be the benefit in doing that?
NetApp held its Analyst Day on Tuesday outlining its financial targets for Wall Street and detailing the reasons why customers will look to them for storage and data management solutions. I am at said event thus the traveling excuse. My very quick summation after speaking with NetApp executives, investors and customers over the last 24 hours:
- NetApp unveiled a new brand, logo and company name. Kudos to their team for pulling this off while growing at roughly 20% per year. The 20% number is significant because it proves NetApp didn't get distracted from its products or customers while doing some necessary marketing research. Customers see the new logo and tag line but it is hard to appreciate what this takes from an investment and manpower standpoint. The only thing they see is products that continue to work.
- I met a customer who took 3000+ physical servers to near 200 with VMware and NetApp. After hearing the reasons why the customer made these two vendor selections (versus competitors' offerings), it is hard to argue why these two companies won't have success as partners and as separate entities going forward.
- It appears that NetApp is preparing an executive management transition as Tom Georgens keeps getting more responsibility - this time being named to NetApp's board. Customers will appreciate Tom's candor and operations prowess as it should translate into even better product quality and faster innovation / development cycles.
- The one thing I see NetApp missing is (more) software that enables customers to put additional data into their own storage. EMC has Legato, IBM has Content Manager and FileNet, HP has IAP and Data Protector. NetApp has Symantec and Commvault - two very good 'partners.' But I bet I could find a few folks who would love to get backup and archive software from NetApp. Call me crazy but somehow there are benefits when customers deal with fewer vendors.
I recently participated in Dow Jones VentureOne Summit. I sat on a panel that discussed virtualization trends. The room was full of venture capitalists who asked some very good questions. However, I spent some of my time trying to refute many of the myths around 'virtualization'. Luckily, I had my ESG virtualization research with me so I could support my opinions with real data. This is a quick list, but here are the worst myths out there.
- No one has deployed server virtualization in production environments.
- Microsoft will not have an impact on the server virtualization market for another 18 months.
- Desktop virtualization is not ready for enterprise customers
- Non U.S. markets are really slow to adopt virtualization solutions.
- There is no innovation left for hypervisor vendors. It is all going to be management.
I could spend time refuting these as I did during the panel, or you could read our research or set up a discussion with us. There is no reason why these thoughts should continue to permeate the market.
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