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

1. STORAGE ARCHITECTURE/EXECUTIVE:Creative 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. Disk Storage Vision Fabric Storage Vision HA Storage Vision Storage ManagementVision • Technology • Process • Policy • Measurability • Technology • Process • Policy • Measurability • Technology • Process • Policy • Measurability • Technology • Process • Policy • Measurability Customer’sOverall Storage Vision Enterprise BackupStorage Vision Tape Storage Vision DR Storage Vision • Technology • Process • Policy • Measurability • Technology • Process • Policy • Measurability • Technology • Process • Policy • Measurability RFI/RFP – Lets you take control 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 @ss” • Oh, by the way… That’s a GOOD thing!

7. Application Integration Application Management Application Management Storage Policy Management Services Software Storage Resource Management Hardware Storage System Management Virtualization Continuity Replication Storage Networking Arrays Libraries Disk Drives Tape Drives 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 can’t 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 • Don’t 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” • “Don’t 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? • What’s optional? What’s required? • Ensure adequate time for responses, including Q&A periods • Make sure all vendors receive clarifications from Q&A

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 wasn’t 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. Clustering for high availability Price, footprint, manageability Disaster recovery and remote replication Rating the responses What’s 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.

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 • It’s only where they THINK they are going • Ask about product/purchasing lead-times • It’s 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 it’s 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!” • It’s 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@glasshouse.com

24. ASK THE EXPERTin the Northeast Exhibit Hall • MONDAY • 4-5 PM

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