HP Revives Pay-Per-Use Storage

HP's pay-per-use storage solution now comes with a revised payment plan, one that HP executives hope will be enticing enough to lure customers into a service that fell short of success when it was introduced during the late 90s.

As part of its Adaptive Enterprise Strategy, HP is offering a utility-type service in which a customer gets two monthly charges. One is a base monthly charge for a specific amount of storage the customer anticipates will be used. The other bill is a variable charge, where the customer pays for any extra storage capacity used that is above the initial base amount, says Gary Wright, vice president of network storage services at HP.

For example, says Wright, let's say a customer signs a three-year contract with HP, and on average expects to use a minimum of 6 terabytes. But the customer also estimates that his storage needs will grow to 10 terabytes over the three-year contract. The company will be charged a constant monthly fee on the 6 terabytes, but charges on the variable bill will fluctuate depending on how much extra capacity is used that month.

"Over a three-year contract, the customer only pays for what he uses," Wright says. "The beautiful part of this plan is, what happens if the customer only uses 8 terabytes? Over that three-year period, he will only be charged for what he uses."

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The pay-per-use concept is not novel to the industry. Several years ago, companies like Compaq Computer, HP and IBM were offering to sell storage the same way people pay for electricity or water. There were variations to how some of these utility models were offered, with some vendors leasing the IT hardware to the customer. But this model never gained much traction. Veteran storage administrators were reluctant to relinquish control of their storage and the dot-com companies--which were the most likely candidates to take on this new model--went bust. Wright was unable to give details of the service's pervious payment structure.

"I don't have the details of that," Wright explains. "(But) there have been some changes. First, the economics have changed. The other thing is, we have learned to make the (service) more attractive to customers."

Moreover, this time around, HP executives say they have more sophisticated tools to offer with this service so customers can have a better view of how to monitor their storage needs. HP will implement an automated metering capability through two Proliant servers. One will run the OpenView Storage Area Manager suite, which monitors the XP disk drives to see how much storage is allocated, and the second will run the HP Automated Metering software, which takes information from the SAN for billing purposes. The information culled from the metering software can be viewed via a Web site, so customers can monitor the XP storage capacity.

Should the customer reach the estimated 10 terabytes of storage use before the three-year contract is up, HP will offer to end the service then and there. Once the customer's contract is over, it is up to him to decide what course he wants to take with the storage. HP owns the hardware that is used during the service contract, but the customer has the option to buy it.