back to article List prices mean zilch. Remember that when buying from upstarts

Storage industry blogger Howard Marks has written about telling storage startups apart from upstarts. Except, when you dig into his piece, it reads more like how to be a savvy tech buyer. Marks' online post, titled ”Separating Storage Startups From Upstarts” got me thinking, as someone involved in making large purchasing …


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  1. K

    List price means zilch.. full stop

    the level of discount you get from any provider (not just startups) is reliant upon your account manager or reseller,

    With regards to Dell, if your not getting at least 30-40% then its time too

    a) Start playing them off with HP

    b) Ask for a new account manager

    c) Stop using a reseller and deal with Dell direct

    On a recent order I've managed over 60% off (That was an end of year deal), and we're only a small SME with about 80 staff...

    1. Anonymous Coward
      Anonymous Coward

      Re: List price means zilch.. full stop

      How do those points work out with Dell's new sales process?

      No account manager unless you are a mega corp

      No dealing direct unless you want to pay List price.

      Go on, buy HP and get stuck in an equaly bad morass of conflicting parts and prices.

      Frying pan onto the fire maybe?

      1. K

        Re: List price means zilch.. full stop

        > How do those points work out with Dell's new sales process?

        This has not been rolled out in UK yet.

      2. Anonymous Coward
        Anonymous Coward

        Re: List price means zilch.. full stop

        Interesting, Dell seems to be basically admitting that x86 servers and the rest of the things they sell, such as PCs and lower end storage, are commodities and people are just going to purchase based upon price, so they are getting rid of everything that might make them more expensive than HP, etc... like account managers, technical pre-sales engineers, etc unless you are buying in the multi-millions many times a year. That is an about-face as their previous strategy was to become a "solution provider", as opposed to a hardware delivery company.... I don't blame them if companies are purchasing a handful of Windows servers a year, but this is going to be annoying for medium sized enterprises.

  2. Anonymous Coward
    Anonymous Coward

    Sounds about right.

    Small company I was at would negotiate the price with the actual user, then quote them 10-30% more at their request, before applying a "discount" back to the agreed price. We and the buyer were happy that we/they were getting work/product at a fair price and the beancounters basked under the impression their high-pressure negotiation seminars had paid off and their buyers were busy screwing the vendors.

    Happily most of our buyers were the enlightened sorts who recognised that healthy business dealings involved us getting paid for our work, and them getting the service they require. Us gouging them or them trying to drive us into bankruptcy was mutually damaging, seeing as they'd have to find and integrate another vendor, and we'd have to find new jobs. All of which was faff.

    Of course beancounters don't distinguish one vendor from another and just care about the bottom line. Which is fine except the bottom line doesn't show things like quality of customer service, response and turnaround times, or whether you can get an actual engineer on the phone at 8pm on a Sunday rather than a call-centre droid following a script...

    1. K

      Yep I've done this several times - its one thing to put the squeeze on a mega-corp, but if we're expecting a partner/supplier to deliver after purchase services, its needs to be cost beneficial for them.

    2. J. Cook Silver badge

      @anon, re: beancounters...

      I worked for a place where the lead bean counter (that was really his title, too!) had a habit of demanding Net30 terms out of every vendor we bought stuff from, and cutting the checks to them on day 29.

      Needless to say, we had a helluva time buying stuff for a reasonable price because our vendors would let this roll for a quarter or two and them tell us to go take a long walk off a short pier.

      (The same place also wouldn't give anything over than net 5 to customers that paid us to do stuff, too- talk about a hypocrite. Glad I don't work there anymore.)

  3. Pete 2 Silver badge

    Dance together, but don't get Tango'd

    > Array lifespans of four to five years seems to be the minimum

    The key thing about storage is to not buy too much. That's where a partnership can be helpful.

    Few companies will have small or zero growth requirements. They will know that their organic data growth will be X% per year. They will also know that the price of storage is ever-decreasing. That both gives them leverage and puts them in a spot.

    On the one hand, it permits a buyer to dangle the carrot of long-term sales in front of a storage vendor: knowing that they will need a certain number of TB every year can be as attention-focussing as having their nuts in your fist. However being beholden to a single supplier for upgrades over a 2, 3 or 4 year term can lead them to (mistakenly) think it's they who have you by the short'n'curlies. And extricating yourself from what seemed like a good deal, when it all goes sour, can be an expensive and career damaging chore.

    There is also a danger from dealing with the "Upstarts": those storage outfits who have been going a few years, but haven't joined the hallowed ranks of the "established" vendors. Apart from the obvious: them feeling the heat if the market turns nasty, there is also a big question of how they will support customers who are not in their mainstream marketing area. Will a U.S. based Upstart be ready, willing and able to provide excellent service to an EMEA-based organistion: or will you find yourself subcontracted out to the lowest, local, bidder? And at the back of the queue where feature requests and bug-fixes are concerned? There's also a consideration that a lot of Upstart's "growth" strategy can be summed up as: race for growth and sell out at the top. In which case you find your storage strategy has quickly become a dead-end business for one of the major players - who only bought the Upstart to get their customer base, or their tech. You will have gone from being a profitable fish in a smallish pond to being an annoying sideline in a sea of enterprise players.

  4. Don Jefe

    List prices in every industry except hospitality and full service dining are a complex mess of horseshit that are compiled for everyone but the customer. That's the customer price list, a completely seperate thing.

    List prices are the generic figure designed for insurance companies, emergency response personal market analysts and lawyers. Warehouse burned down? That sucks, but it could be worse, the insurance amount will be calculated on the list price, not the, typically deeply 'discounted', price you actually paid.

    Analyst gets wind of a bunch of stale inventory, the totaled list price of that inventory is what's going to be in the headline.

    They'll use list price as part of calculating your sentence of you get caught stealing a bunch of stuff too. Everything basically but establishing a price.

    For purchasing purposes you never bother with looking at list, it's worthless. Find a company similar to yours in size/purchasing volume, but located on few hundred miles away, and just call up the boss (or similarly placed to you person) and ask. Stopping in with them is even better, for the price of lunch you'll know exactly how far the account reps are willing/able to go. It's simple professional courtesy to share pricing details with those on your sector, but who aren't direct competitors. As long as you don't blab who gave you the info then it's all fine.


      A few vendors lost my business directly because of this...

      I would be brought into a project and through conversations with similar companies to us discover that the beancounters were paying vastly over the odds for the software. Worse still, because we were a big name brand it seemed that suppliers felt (and from the evidence justifiably so) that they could charge us a premium because we would just pay, no questions.

      As I was involved in integrating the software with our other systems and so would call up the supplier for a meeting and ask them politely to change the price. Often it would come down, however other times they just refused to budge which told me all I needed to know about how that vendor felt about doing business with my firm. Generally these are also the firms who the users reported consistently poor customer service from.

      In those cases I put together a business case to replace them with an internally developed solution or a different supplier who were willing to give us a fair market rate.

      Moral: if any supplier clearly doesn't care about your business in terms other than the money they can get from you then you should seriously consider replacing them.

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