Data storage buyers choose a certain vendor over others in particular storage categories primarily for the features and functions of the product the vendor offers. That's been the apparent trend in the results we've seen over seven years of Storage magazine's twice-a-year storage Purchasing Intentions surveys. A quick glance at the survey results shows that most of the time, in purchasing decisions, data storage buyers value features and functions over other criteria, such as price, technical support, market leadership and other factors. But by analyzing several years' worth of purchasing data, we're able to see subtle but important trends in purchasing criteria. Our analysis revealed some interesting and surprising things about why your customers align themselves with certain vendors in specific product categories -- information that will be valuable to you as you attempt to sell those products to customers. Find out what's driving customer decisions in disk systems, storage networking products, tape backup hardware, backup and disaster recovery products, and storage management software, in this Storage Purchasing Decisions Criteria Special Report.
About the survey The Storage magazine/SearchStorage.com Purchasing Intentions survey is fielded twice a year; this is the seventh year the surveys have been conducted. Storage magazine subscribers are invited to participate in the survey, which gathers information related to storage managers' purchasing plans for a variety of data storage product categories. This edition had 777 qualified respondents across a broad spectrum of industries, with the average company size measured as having revenue of $1.6 billion.
PURCHASING DECISIONS CRITERIA BY PRODUCT CATEGORY
In the disk systems category of the survey, features/functions has held the No. 1 position in respondents' choice of a primary disk system vendor going back at least as far as spring 2004, and it currently has a healthy lead over the next-most-cited criterion. In the spring 2009 survey, the ranking of criteria by respondents was features/functions (33%), supply other key technology to my company (18.75%), technical support and services (17.25%), price (15.5%), market leader (9.5%), other (4.5%) and financial stability (1%). (The percentages don't add up to 100 due to rounding.)
Not only has features/functions of disk systems held the top spot for a number of years, but it also is rising in importance. In spring 2007, it was ranked as the most important factor in choosing a primary disk system vendor by 26.5% of survey respondents; this spring, 33% of respondents said it's most important. Why the upward swing? Dave Russell, vice president for Gartner Research with a specialty in storage and servers, suggested that data growth has contributed to the change in importance. "As the need to store more data increases along with the desire for improved manageability and replication services, feature/function takes on an increasingly important role in the purchasing criteria as opposed to factors such as vendor market share and incumbency," he said. And it's clear that data storage managers have a lot of data to contend with; the 2008 Storage Magazine salary survey showed that respondents were managing an average of 183 TB of data.
Andrew Reichman, senior analyst for Forrester Research, interpreted the shift differently. "With disk systems, there's always an interplay between big vendors and small vendors. Features and functions would favor the small guys in a lot of ways. There are more things you can get with a small vendor." But, he said, "[A few years ago], the big vendors were out there saying they had everything a customer needed, and people were believing them." As users discovered that the large vendors' wares might not be as comprehensive as they claimed, he said, the pendulum started swinging in the other direction, toward the smaller vendors.
Reichman also pointed to data center consolidation as a likely factor in the lower importance of features/functions among survey respondents in 2007. "Two years ago, there was a lot of consolidation going on. Big companies were (and still are) in the process of centralizing their IT departments. When they centralized, they said, 'There are one or two vendors that we approve for the whole organization.' In that scenario, you're going to take comprehensive, broad products over small, best-of-breed products."
An August 2008 study by Computer Economics Inc. showed that the pace of data center consolidation was still on the rise -- with 60% of companies involved in some level of consolidation in 2006, compared with 76% in 2008. But that consolidation has produced some disappointment among data center directors, said Reichman, which has led to the upward swing over the past two years toward features/functions as organizations move toward a more varied group of vendors with a wider variety of products and features than those favored in a highly consolidated data center. "People haven't gotten good results with that [consolidation] strategy. The dream of the SAN was a horizontal app that was a good fit for everyone. It's a good idea in theory, but in reality has been too complicated."
At the same time, the move toward server virtualization is having a big impact on why users buy certain data storage products, he said. "Users are essentially asking the question, 'What storage should be the back end for VMware?' And features and functions matter with VMware," he said.
In the storage networking switch category, features has held the No. 1 position going back to at least spring 2004. In the spring 2009 survey, the ranking of criteria by respondents was features/functions (25.25%), market leader (20%), supply other technology to the company (14.75%), tech support (12.75%), price (11.5%), other (7.5%) and financial stability (0.25%).
Among those criteria in the storage networking switch market, market leadership shows the most dramatic increase in importance since spring 2004, when only 13.75% of respondents said it was the No. 1 factor in the choice of a switch vendor. Gartner's Russell attributes the change to the need to protect switch hardware investments against future obsolescence. "Customers are concerned about betting on the wrong vendor, so they are increasingly looking at market penetration as a measure of safety," he said.
The market share battle between Brocade and Cisco over the past five years mirrors changes in storage switch customers' purchasing decisions criteria priorities. In spring 2004, Brocade was the mind share leader among survey respondents, with 38% of respondents saying that Brocade would be their primary switch vendor in 2004, and Cisco at 24.5%. Despite Brocade's purchase of McData in 2007, it's slipped to the No. 2 spot in our survey, at 33%, with Cisco at 45%, in the spring 2009 survey. The McData purchase appears to have had a significant impact on the switch market, though: When Brocade bought McData (which itself had bought CNT/Inrange in early 2005), the switch market became essentially a two-horse race. Around the same time, Cisco was attaining functional parity with Brocade's products -- which accounts for Cisco's higher status among survey respondents than five years ago.
Also noteworthy is the importance of price in the storage networking switch market. That factor has almost doubled in importance from spring 2004 (6%) to spring 2009 (11.5%). Russell attributes the shift to the need to control switch costs resulting from an increasing volume of server hardware at customer sites. "As organizations deploy more servers and undergo more server consolidation efforts, coupled with the desire for connectivity redundancy, the overall cost associated with attaching a server is increasing," he said. The lack of competition in the switch market also likely has an impact on the importance of price: With only two major players in the market, users tend to be more price-conscious simply because there's less competition for their budget dollars.
Unlike the other categories in our survey, in the tape backup hardware category, features isn't in the top spot in the spring 2009 survey. At 21% of respondents, it lags behind supply other technology to company, which was cited by 24.75% of respondents as the No. 1 factor in their choice of a tape backup hardware vendor. Following those two factors in the spring 2009 survey are price (18% of respondents) tech support (14.5%), other (11.75%), market leader (10.25%) and financial stability (0%).
Not only has features fallen out of the No. 1 spot in the spring 2009 survey, it has dropped considerably in importance since spring 2004 (then, 29.4% of respondents said it was the most important factor in choosing a primary tape backup hardware vendor). Russell suggested that the reason for this drop is that there is more parity among tape hardware products nowadays. "Tape drive technology and even tape automation may seem more even to buyers today, with less differentiation being seen regarding feature and function," he said. Underscoring this has been the emergence and domination of the open-standards LTO format; nearly every library is equipped with (or can be equipped with) LTO drives. It's also likely that users are less interested in tape product features simply because they rely on them less now than in the past.
While features is dropping in importance, price is rising. In spring 2004, 12% of respondents said it was the No. 1 factor in choosing their main tape backup vendor, compared with 18% in spring 2009. Russell said, "Tape is feeling pressure from disk technologies such as SATA and SAS and especially deduplication, which is driving down the cost of disk for backup and some archiving applications." And the fact that price as a criteria has risen consistently, if not dramatically, underscores the concept of tape as a commodity product.
Beyond the trends around features and price, supply other technology to company saw a dramatic swing in importance from spring 2005 (31%) to fall 2005 (17.9%), but over the past few years, it's remained steadier, in the 20% to 25% range. But in the spring 2009 survey, supply other technology moved into the No. 1 spot in the tape backup hardware category, essentially swapping positions in the survey results with features compared with last fall's survey. Russell said that changes in respondents' ranking of supply other technology might relate to "pricing and/or service, in that the more spending a customer does with a single vendor, the better discount they can negotiate; plus, there might be the 'one throat to choke' thought as well." It's also possible that with a very mechanical device like a tape library, users might want to stick with vendors they know and trust.
In the backup software category, features holds a very wide margin over all other factors in the choice of a backup app vendor. In the spring 2009 survey, it was ranked as the No. 1 factor by almost 36% of respondents. Following features were supply other software (16%), market leader (13.5%), tech support (11.5%) other (11.25%), price (7.5%) and supply hardware to the company (3.5%), financial stability (0.50%).
Despite features' position in the No. 1 spot in the backup software category, it's dropped significantly in importance since spring 2004. Then, it was the overwhelming leading factor in respondents' choice of primary backup software vendor, at almost 47%; in the spring 2009 survey, it's still in the lead, but its importance has dropped to a little less than 36%. Gartner's Russell said the shift is due to the increasing importance of pricing over the same time period; price has seen about a 6% increase in importance during that time. He said: "Pricing is becoming a large factor as organizations need to back up more locations and more data -- all of this leads to more machines that are producing more data that need protection." Oftentimes, users say that they changed software vendors as their capacity grew mainly because the licensing of the incumbent backup application became so onerous. With virtual servers, that's being compounded; before, a user would just license more agents as they added physical servers, but with VMs, they're adding a lot more servers, and licensing agents for each is usually cost-prohibitive.
As for why features has historically been and continues to be important in backup software purchasing decisions, the driver, once again, is data growth, according to Russell: "Customers worldwide are re-engineering their backup/recovery solutions to meet the increasing demands of improved service levels against a growing volume of data, and organizations believe that they need better, more capable solutions to address the challenge."
In the storage management category, features/functions is in the No. 1 position, one that it's held since spring 2005 and, as in the disk systems category, it currently has a healthy lead over the next-most-cited criteria. In the spring 2009 survey, the ranking of criteria by respondents was features/functions (31%), supply other software (17.5%), tech support and supply hardware to the company (both at 11.5%), price (9.75%), market leader (9.25%), other (4%) and financial stability (1%).
Interestingly, supply hardware to the company has been on a downward trend since fall 2004, when 21.3% of respondents said it was the No. 1 factor in their choice of a primary storage management vendor.
Both Russell and Reichman suggested that the reason for the downward trend in that purchasing decisions criterion is a lack of innovation among larger vendors, which are more likely to have a broader portfolio of storage management products to sell into a company than a smaller vendor. Russell said, "Organizations are looking for vendors and products that can best help them address their challenges, and often innovation is coming from smaller, even private companies."
Reichman agreed. "At the peak, people very much saw … EMC ControlCenter (ECC) as the right choice. But ECC isn't a great product in terms of utilization. People want to have a handle on how much capacity they have. You don't get a lot of that from the big vendors."
The downward trend may -- at least partly -- also be attributed to the fact that the products that have lots of bells and whistles are also very expensive, hard to implement and hard to use.
Reichman also said the need for better utilization management is affecting another factor in storage management purchasing decisions: price. "Price moves along [in the survey] as not a particularly important thing. That's because the price you spend for the software is much less important than the success you have with it." A 5% improvement in storage efficiency would have a major impact on a customer's data center costs, he said. Reichman stressed that customers need to be more efficient in their use of storage and that not doing so will be very costly for them in the long term. "[Efficiency] should be a big motivator for organizations to spend more money on storage management tools. … [Storage management] makes more sense than ever now." Indeed, a recent study by The InfoPro Inc. showed that large companies are concentrating on improving storage utilization and moving data off expensive tiers to save money while cutting budgets.
On the other end of the spectrum from "supply hardware to the company" is "supply other software to the company," which rose in importance between spring 2004 (13.8% of respondents cited it as the No. 1 factor in choosing a storage management vendor) and spring 2009 (17.4%). What might account for that somewhat modest shift in purchasing decisions criteria? Both Russell and Reichman say it could be driven by a need for the benefits afforded by choosing multiple products from the same vendor. "[It] could be related to maintenance costs and the desire to drive to lower overall maintenance spending," said Russell. By buying more than one software system from the same vendor, a data storage buyer stands to save money on maintenance costs over buying from software applications from multiple vendors.
Reichman said, "[A higher ranking of 'supply other software to the company'] would say that they want to get synergy, especially with tools that deal with workflow, ITIL, etc. [The upward trend] might demonstrate that the vendors are showing that [buyers] are going to get the benefit of [synergy among products]."
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