Nimbus beats NetApp at Ebay – The details and the conspiracy of vendors

In my last entry, I mentioned that Nimbus has now 100TB in eBay and every single TB of it is on SSDs. The full details of how the deal was trashed out are detailed here, beating the competition from NetApp and 3PAR, the incumbents.

The significance of the deal was how a full SSDs system was able to out-price the storage arrays with a hybrid of spinning disks and SSDs.

The Nimbus news just obliterated the myth that SSDs are expensive. If you do the math, perhaps the price of the entire storage systems is not the SSDs. It could be the way some vendors structure their software licensing scheme or a combination of license, support and so on.

Just last week, we were out there discussing about hard disks and SSDs. The crux of the discussion was around pricing and the customer we were speaking too was perplexed that  the typical SATA disks from vendors such as HP, NetApp and so on cost a lot more than the Enterprise HDDs and SSDs you get from the distributors. Sometimes it is a factor of 3-4x.

I was contributing my side of the story that one unit of 1TB SATA (mind you, this is an Enterprise-grade HDD from Seagate) from a particular vendor would cost about RM4,000 to RM5,000. The usual story that we were trained when we worked for vendors was, “Oh, these disks had to be specially provisioned with our own firmware, and we can monitor their health with our software and so on ….”. My partner chipped in and cleared the BS smoke screen and basically, the high price disks comes with high margins for the vendor to feed the entire backline of the storage product, from sales, to engineers, to engineering and so on. He hit the nail right on the head because I believe a big part of the margin of each storage systems goes back to feed the vendor’s army of people behind the product.

In my research, a 2TB enterprise-grade SATA HDDs in Malaysia is approximately RM1,000 or less. Similar a SAS HDDs would be slightly higher, by 10-15%, while an enterprise-grade SSD is about RM3,000 or less. And this is far less than what is quoted by the vendors of storage arrays.

Of course, the question would be, “can the customer put in their own hard disks or ask the vendor to purchase cheaper hard disks from a cheaper source?” Apparently not! Unless you buy low end NAS from the likes of NetGear, Synology, Drobo and many low-end storage systems. But you can’t bet your business and operations on the reliability of these storage boxes, can you? Otherwise, it’s your head on the chopping block.

Eventually, the customers will demand such a “feature”. They will want to put in their own hard disks (with proper qualification from the storage vendor) because they will want cheaper HDDs or SSDs. It is already happening with some enterprise storage vendors but these vendors are not well known yet. It is happening though. I know of one vendor in Malaysia who could do such a thing …

About cfheoh

I am a technology blogger with 20+ years of IT experience. I write heavily on technologies related to storage networking and data management because that is my area of interest and expertise. I introduce technologies with the objectives to get readers to *know the facts*, and use that knowledge to cut through the marketing hypes, FUD (fear, uncertainty and doubt) and other fancy stuff. Only then, there will be progress. I am involved in SNIA (Storage Networking Industry Association) and as of October 2013, I have been appointed as SNIA South Asia & SNIA Malaysia non-voting representation to SNIA Technical Council. I was previously the Chairman of SNIA Malaysia until Dec 2012. As of August 2015, I am returning to NetApp to be the Country Manager of Malaysia & Brunei. Given my present position, I am not obligated to write about my employer and its technology, but I am indeed subjected to Social Media Guidelines of the company. Therefore, I would like to make a disclaimer that what I write is my personal opinion, and mine alone. Therefore, I am responsible for what I say and write and this statement indemnify my employer from any damages.
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