Chief Technology Officer/CISO
Purchasing a new enterprise storage system is usually the largest data center equipment purchase for most companies. The cost is justified because these systems store and protect the companies most critical data and applications. In fact, the purchase often includes multiple systems so it can provide quick recovery at another location in case of a natural disaster or power outage.
So how do these storage vendors reward their customers for making such a large purchase? By forcing them to repurchase all this equipment again in 36 months.
Wait, what? Why do they do this and how is this possible?
Let me explain how and why:
When you purchase that new enterprise storage system, whether it cost $1M or $10M, it includes 36 months of prepaid maintenance and support. The maintenance and support usually makes up 30% of the total purchase price and since it’s prepaid, it’s also heavily discounted. A big discount, that sounds like a good thing right?
It starts out good but here’s the issue:
Once the initial 36 months are up, it’s time to renew the maintenance and support.
You get a quote from your storage vendor you made that larger purchase from 3 years ago and you also probably did a few storage upgrades since then. However, this new quote is only for 12 months and it’s not heavily discounted. In fact, the cost on the maintenance renewal quote for only 12 months of support is actually more than what you paid for the entire first 36 months of maintenance and support.
How is this possible?
The vendor explains it’s because their cost to support the hardware on that extremely reliable storage system you purchased 3 years ago, are much higher now than they were 3 years ago.
They feel really bad about the 400% support cost increase on this new quote so they came up with a solution to you. The sales rep from your storage vendor then goes on to explain,
“For the same cost we just quoted you for years 4, 5 & 6 of support on that old storage system, we can now sell you a brand new system at that same price. And guess what else we can throw in? The new storage system includes 36 months of prepaid maintenance heavily discounted!”
See how this cycle starts? For some customers it never ends.
All the top enterprise storage vendors started this 36 month tech refresh decades ago to force new sales opportunities on their existing customers. Customers have tolerated this behavior from their storage vendors for years but the reality is its worse now than ever before.
The reason the systems are substantially larger and more expensive than when this sales tactic first started and our storage requirements quadrupled. 15 years ago when we had to do these tech refreshes, the amount of data we needed to migrate to the new storage systems was about 50TB – 100TB. However, today’s capacities are in the Petabytes. Migrating a Petabyte is not an easy task, it’s often a nightmare.
Customers tell me this 36 month tech refresh is so bad now that when they purchase a new storage system, within 18 months they need to start budgeting and planning for the new purchase, migration and tech refresh.
So why do so many customer put up this this?
Perhaps it’s because they join the company less than 3 years ago and inherited someone else’s nightmare or maybe they’re just not aware of their options.
This is were DataEndure can help.
If you have one of these 36 month tech-refreshes coming up and it’s not in your budget, or you simply don’t like getting over charged or support, let us know and we’ll help you negotiate a very reasonable support contract.
When it’s time to purchase a new storage systems or upgrade your existing system, we’ll help structure an agreement that eliminates the 36 month tech refresh.