STORAGE ARCHITECTURE/ EXECUTIVE: Creative Negotiating and Financing for Storage Purchases

1
STORAGE ARCHITECTURE/EXECUTIVECreative
Negotiating and Financing for Storage Purchases

• How to take back control of the buying process...
• Bill Peldzus
• Director of Storage Architecture
• GlassHouse Technologies

2
Agenda

• Definitions RFI versus RFP
• Current State
• Using a Storage Reference Architecture
• The Process
• Rating the responses
• Devil in the details
• Negotiation Techniques and where vendors are most
  flexible
• Creative purchasing
• Success Criteria

3
Your Vision May Not be Your Vendors Vision
4
Request For

• RFI
• Request for Information
• Results in best technology decision
• High-level pricing only for budgeting
• Based upon your business drivers and requirements
• Often used to define technology buying standards
  for national/multi-national corporations

5
Request for (2)

• RFP
• Request for Proposal
• Results in best purchasing decision
• Give me your best price
• Based upon a storage reference architecture
• Usually for larger, net-new purchases
• Not for expansion disk in an existing array

6
But first

• At the end of our last purchasing (RFP)
  engagement, the vendor(s) told us
• Your RFP was a pain in the _at_ss
• Oh, by the way Thats a GOOD thing!

7
The storage reference architecture

• Maps customer requirements to specific products
• Tells the vendors exactly what you need
• Includes the following building blocks

8
Storage reference architecture example
9
An RFP must

• Provide details on current state
• Include current and proposed performance metrics
• Provide details on your proposed future state
• Fabric design (if Fibre Channel)
• Network design (if IP storage)
• Servers
• Storage
• HBAs
• Tape libraries/drives
• Any software, including versions
• Database information
• WAN information, if replicating
• Details on OSes, patches, firmware, microcode

10
An RFP must (2)

• Discuss current and future Recovery Time
  Objectives (RTO) and Recovery Point Objectives
  (RPO) for Backup DR
• Discuss current and future Service Level
  Agreements (SLA) and Standard Operating
  Procedures (SOP)
• Delineate restrictions
• We cant upgrade to OS Vx.x until next year due
  to application limitations.

11
RFP process

• Use an Intent to Respond (ITR) early
• Define your internal review team and ensure
  buy-in from all involved
• Dont forget the political climate (favorite
  vendors)
• This includes legal, purchasing, maybe a C-level
  executive
• Remember that Nondisclosure Agreements (NDA) and
  confidentiality agreements take time
• Get a primary contact at each vendor

12
RFP process (2)

• Do vendor pre-meetings!
• Discuss it live ensure they understand the
  objectives and timeline
• Set the communications guidelines
• Phone calls allowed? E-mail only?
• Establish other important Rules
• Dont contact any one else at my company
  regarding this RFP during this project.
• Provide the project plan and schedules to all

13
RFP process (3)

• Dictate the response format
• Line-item pricing
• Short, concise answers to specific questions
• Does your product support CIM/SMI-S? rather
  than Discuss how your product conforms to
  management standards
• GA only?
• Whats optional? Whats required?
• Ensure adequate time for responses, including QA
  periods
• Make sure all vendors receive clarifications from
  QA

14
Short, concise questions?

• Based upon a previous engagement, we thought this
  was short and to the point
• Do you sell direct to end-users?
• However, the answer wasnt quite so concise or
  clear!
• We have implemented a multi-channel distribution
  system to maximize global coverage and to further
  develop productive relationships with partners.
• So, was that a yes or a no?

15
Rating the responses
Whats your IT priority? What are
the most important aspects of the RFP? What are
the business drivers? Who are the beneficiaries
of the technology? These are just a few examples
of guiding the selection criteria.

• Clustering for high availability
• Price, footprint, manageability
• Disaster recovery and remote replication

16
Rating the responses (2)

• Key considerations
• Writing your RFP with rating/scoring the
  responses already in mind! Have your matrix ready
  at distribution time not after
• What weight will I give each of the areas within
  the response?
• Is my storage reference architecture rock-solid?
  Or, will I adjust based upon responses?
• Ensure you check references, preferably other
  companies similar to yours (score these calls as
  well!)

17
The devil in the details

• Ask the important company information questions
• These will be different between public and
  private companies
• Company financials
• Pending litigation?
• Significant recent layoffs?
• Executive turnover?
• Key partnerships?
• Go-to-market model
• Services model
• Who are your primary competitors?
• These are even more important if you are
  considering start-ups!

18
The devil in the details (2)

• Be careful of roadmaps and futures
• Its only where they THINK they are going
• Ask about product/purchasing lead-times
• Its perfectly okay to ask for things in writing
• Request a written guarantee with financial
  penalties on
• Stability/uptime
• Performance
• Give the vendors commentary opportunities
  within the RFP
• They may want to clarify a No answer

19
Negotiation techniquesa.k.a., Where the vendors
are most flexible

• It gets fun when its down to the final two.
• The CEO of a large storage vendor told one of our
  customers that He has not authorized the sales
  team to lose this deal!
• Its easy for vendors to add services and
  training at little to no additional cost
• The larger the purchase, the more leverage
• It may even be cheaper overall to buy more than
  you need now
• Consider asking for an on-site vendor techie for
  the first few months
• How much maintenance and support included with
  initial purchase?
• Need help with data migration?

20
Creative purchasing

• Pay as you grow
• Installed capacity that is turned on when
  needed
• Lease versus buy
• Get your finance team involved early
• Buy-back of old or replaced equipment
• Get prices with and without this option
• Not to exceed future pricing
• Make sure the deal you get today is in place
  tomorrow, especially if you get locked in to a
  product or vendor in the short-term
• Built-in technology refreshes
• Protect yourself in case they announce the latest
  and greatest two months after you buy

21
Position for success!

• Consider an independent third-party for the
  project
• Provides a layer of isolation between vendor
  and customer
• Can alleviate political issues/biases within your
  company
• Positioned to craft the most detailed and
  tailored RFP
• Can provide a detailed analysis of the responses
• Will ensure you only pay for what you need, and
  can assist in negotiations
• Easily pays for itself several times over if
  purchasing over 1m of hardware/software
• For the largest purchases, C-levels often dictate
  some type of independent auditor/expert in the
  process

22
In conclusion

• The more work put in up-front, the greater chance
  for success!
• Success equals
• The right products
• Matched to your business requirements
• At the best price
• That work and interoperate on Day One
• And are delivered, installed, and configured
  on-time
• With no urprises, and total internal buy-in
• With a flexible and scalable architecture to
  easily accommodate growth

23
Thank you!Questions?

• Bill Peldzus
• GlassHouse Technologies
• bpeldzus_at_glasshouse.com

24
ASK THE EXPERTin the Northeast Exhibit Hall

• MONDAY
• 4-5 PM

25
Please rate the content of Bill Peldzus talk,
Creative Negotiating and Financing for Storage
Purchases.

• Poor
• Fair
• Good
• Very Good
• Excellent

Cross-Tab Label
26
Please rate Bill Peldzus presentation as a
speaker.

• Poor
• Fair
• Good
• Very Good
• Excellent

Cross-Tab Label