Avnet Storage Maximizer Program Offers New Procurement Process

Avnet Enterprise Solutions, the reseller arm of Avnet Computer Marketing, has come up with a new alternative. The solution provider is talking to customers about paying for anticipated storage needs and filling those needs with the most up-to-date and lowest-cost products available. Under Avnet's Storage Maximizer program, customers sign a 36-month contract under which they pay a fixed monthly fee, with that fee credited to their account. That credit is then used to acquire capacity as the client's storage requirements grow.

Under Avnet's program, customers sign a 36-month contract with a fixed monthly fee, with that fee credited to their account.

The key differentiator between Storage Maximizer and the capacity-on-demand programs from most vendors is in how the storage is acquired, said John Hayes, senior acquisition consultant at the Tempe-based solution provider.

Under most capacity-on-demand programs, a storage array is installed with more hard drives, tape drives or tape slots than initially required. The client is initially charged only for the capacity needed at the time. Additional drives or slots can be activated via a software key upon payment. That payment is usually higher than if the incremental capacity was paid for when initially installed. Similar programs exist with high-end servers from several vendors as well.

In essence, customers acquire more equipment than needed up-front and then pay for it later in what amounts to extended payment terms, Hayes said.

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"When you turn the new capacity on, you are paying for yesterday's technology at yesterday's prices. . . . The last thing you want to do is buy more technology than you need," Hayes said. "It's in a manufacturer's best interest to sell as much as they can up-front."

Procuring additional capacity is a cumbersome process for enterprises, often requiring several weeks and the generation of requests for proposals and return-on-investment studies, said John Mercier, director of enterprise storage solutions at Avnet. Using remote capacity owned by a storage service provider means moving part of an enterprise's data off-site using bandwidth that is not always adequate, he said.

With Storage Maximizer, Avnet helps customers determine what they want to pay to acquire or lease storage over 36 months and turns that into a fixed monthly payment, Mercier said. Incremental capacity is paid for from the accumulated payments at prices the day it is acquired without a new procurement cycle. For example, imagine a customer that wants to spend $2 million over three years, including $1 million in initial capacity and $1 million in incremental capacity, he said. During that time, the customer can have Avnet install additional capacity as needed, subtracting the cost from the $1 million set aside for expansion.

"Essentially, they have a $1 million credit to grow their storage," Mercier said. "If we see a great deal, we tell them, 'Here's a great deal, let's grab some.' If they purchase $50,000 in new capacity, they subtract that $50,000 from the $1 million. So they get $1 million up-front capacity, $1 million on credit, but spread the $2 million over 36 months."

Mercier said customers have yet to sign up for Storage Maximizer, "but it's a new program, and we introduced it during a downturn in the economy."