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Storage vendors pitching self-service as-a-service

Storage vendors like Dell Technologies are adding self-service products to their as-a-service portfolios, directed at enterprises seeking to keep daily operation in house.

Legacy storage vendors building out managed as-a-service portfolios are now introducing a new offering: a customer-supervised option.

Dell Technologies added a new purchase option for Apex Data Storage services earlier this month. The customer-managed option lets customers purchase storage systems, capacity and other support subscriptions without the management and day-to-day performance oversight by Dell employees or contractors. Like the vendor-managed option, the customer-managed variant has Dell or its partners install and own the hardware in a co-located or customer data center.

Some analysts argue these customer-managed storage-as-a-service products are an attempt to pad adoption numbers, while others say they meet the individual needs of enterprise storage buyers.

The diversification of products mirror storage products sold by hyperscalers such as AWS and Microsoft Azure, said Dave Raffo, an analyst at Evaluator Group. Providing options builds out the portfolio and keeps legacy storage vendors competitive to hyperscalers, even if the points of differentiation are slim.

NetApp Keystone and Pure Storage's Evergreen products similarly offer some variant on a storage service directly under the control of the customer, Raffo noted.

"[Vendors] want to make buying storage more similar to the way you buy in the cloud," Raffo said. "The more options you get, the better. Everyone has to figure out the best price-slash-performance."

Market demand

Dell's belief that competitors are diversifying their subscription services follows an ongoing storage trend, according to Naveen Chhabra, an analyst at Forrester Research.

Beyond just HPE, Dell and Pure, other companies such as Cisco, NetApp and even AWS with its Outposts hybrid storage product aim to hook enterprises with on-premises storage into subscription services.

"It's just the beginning for all subscription services," Chhabra said. "I see a momentum in the marketplace."

If vendors can shift customers into a subscription model over traditional purchases or pay-as-you-go services, they can also add on additional service expenses, which some customers may not normally purchase outright.

"What's my incentive to sell the same product in a subscription manner? While it may appear to cost less, vendors get a higher margin on that services portion," he said.

We've ended up with a situation here that makes you question what Apex means.
Chris EvansAnalyst, Architecting IT

Chhabra added vendor storage subscriptions are often marketed as hybrid or multi-cloud but can be used as ways to keep customers in a storage vendor's ecosystem instead of a hyperscaler's.

That might not be the case for Dell. Brent Ellis, an analyst at Forrester Research, said Dell's Apex separates itself from the storage as-a-service pack as it isn't tied to a specific cloud partner, meaning customers can pursue a multi-cloud strategy without being tied to a particular hyperscaler.

"It's pretty clear Dell got the message that enterprises will be in the cloud and in the data center," Ellis said. "It's the vendor's responsibility to bridge those. … I think Dell is working hard to make the transition to the hybrid cloud."

Storage vendors are still experimenting with subscriptions, especially as customers are pushing back against all-encompassing services and see value in keeping storage administrators on staff, Ellis added.

"[Vendors are] in a mode of experimentation right now," Ellis said. "A lot of [customers] came back and said, 'This doesn't help as us as much. What are we going to do? Fire our storage admins? They have a lot of knowledge.'"

Joint or sole custody

Dell's new customer-managed model appears to defeat the purpose of a fully managed service, according to Chris Evans, an analyst at Architecting IT.

Having a customer-managed option under the Apex umbrella allows Dell to sell both modern, cloud-like and more traditional self-service products under the same branding. Evans believes Dell's stretch of Apex in this direction has more to do with the appearance rather than reality of customers investing in its latest portfolio.

If customers opt for the customer-managed product, they'll still pay for additional services that come bundled with Apex, such as set-up and technical support at a markup compared to existing purchase options within Dell's enterprise catalogue, Evans said.

"We've ended up with a situation here that makes you question what Apex means," Evans said. "Maybe that's my misunderstanding of the way they're trying to sell this, but my thought was [Dell Technologies wanted] to get to a fully managed, as-a-service [model]."

But a customer-managed model was always planned as part of the Apex storage portfolio and was launched after customer feedback crystalized the need for such a service, according to Devon Reed, vice president of Apex Offers product management.

The customer-managed Apex product isn't that different from competitor products, Reed added, noting sale flexibility remains an important factor for storage vendors to attract a variety of buyers.

Tim McCarthy is a journalist living in the North Shore of Massachusetts. He covers cloud and data storage news.

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