The strategic value of use-based payment models and subscriptions for on-premises storage has increased in recent years. Users don't need to buy the entire storage system and the excess capacity for future growth with a large upfront payment.
Pure Storage recently raised the stakes with updates to its storage technology portfolio, highlighted by the firm's paid power and rack commitment.
The vendor will pay for customers' power and rack space for Pure Storage technology when the user purchases either an Evergreen//One Storage as-a-Service or Evergreen//Flex subscription.
As part of this commitment, Pure Storage will take the following actions:
- Reimburse its customers for the associated costs of power and rack space.
- Make the reimbursement as a one-time, upfront payment directly as cash or in the form of service credits.
- Reimburse its customers according to several factors, including the regional cost of kilowatts per hour as well as the number of rack units the product consumes.
Pros and cons to storage as a service
These use-based payment models and subscriptions enable the payment of on-premises storage to be metered based on capacity usage. Organizations pay on a regular basis, typically monthly.
According to a TechTarget Enterprise Strategy Group research study, these were the most commonly identified benefits of use-based payment models for on-premises infrastructure, such as Evergreen//One Storage as-a-Service or Evergreen//Flex subscriptions:
- The speeding up of IT initiatives by moving costs into future quarters and increasing the amount of infrastructure that can be deployed today (51%).
- The acceleration of IT initiatives by freeing up personnel from infrastructure and systems to address other tasks (47%).
- Quicker deployment of new infrastructure capabilities (41%).
The benefits to operational efficiency have fueled increased interest in use-based payment models. Thirty-three percent of IT decision-makers identified that their preference for procuring on-premises infrastructure was through a flexible use-based subscription model, such as Evergreen//Flex. An additional 27% identified that their preference for procuring on-premises infrastructure was through an as-a-service model, such as Evergreen//One Storage as-a-Service. These percentages surpass the percentage of IT decision-makers that want to stay with the traditional route of procuring, managing and maintaining infrastructure (19%).
Despite the interest in and the value delivered by usage-based subscription models, budgetary limitations can often prevent organizations from adopting them. The finance organizations in many firms are unable to support on-premises hardware subscription services.
How responsibility shifts to Pure
The paid power and rack commitment shifts the responsibility paradigm between the IT vendor and the consumer when it comes to power and space efficiency. This commitment increases the amount of "skin in the game" that Pure Storage engineers have regarding space and power usage in their designs moving forward. Any new engineering design that leads to an increase in either the space or the power Pure Storage products consume will directly and negatively impact the vendor's financial bottom line.
In addition to the paid power and rack commitment, Pure Storage also announced a power and space efficiency guarantee. For Evergreen//Forever subscribers, if Pure Storage does not meet the agreed-upon watts per tebibyte or tebibytes per rack, the vendor will provide remediation. This announcement is an extension to the energy efficiency guarantee from earlier this year and is already available through Evergreen//One.
Pure Storage's paid power and rack commitment is also helpful for enterprises that increasingly prioritize energy efficiency and sustainability initiatives. It will be interesting to see if this announcement creates competitive pressure for others to make similar commitments to power and space efficiency.
Enterprise Strategy Group is a division of TechTarget. Its analysts have business relationships with technology vendors.