Storage As A Service: Nimble, Tegile Intro New Pricing

At least two storage array vendors have introduced pricing models under which customers pay only for the amount of capacity actually used.

Nimble Storage this month unveiled Nimble Storage on Demand, which charges customers based on actual capacity used. Rival Tegile Systems, which in April quietly introduced a similar pricing solution, is now actively rolling it out to customers.

For customers of both San Jose, Calif.-based Nimble Storage and Newark, Calif.-based Tegile Systems, the utility-based model means that, as storage capacity increases, the monthly charge increases, while a drop in monthly capacity means a drop in the monthly charge.

[Related: The 10 Coolest Flash Storage Products Of 2014 (So Far)]

Sponsored post

It is a good system for customers, said partners of the two vendors.

The pay-as-you-grow model helps customers with budgets and storage capacity forecasts, said Chris Pace, founder and CEO of Centre Technologies, a Houston-based solution provider and Tegile Systems channel partner.

"Providing all-flash storage as an operating cost vs. a capital cost will resonate with customers," Pace told CRN.

The biggest trouble with storage is that, as customers' IT infrastructures get more heavily virtualized, it becomes difficult to plan for storage requirements, Pace said.

"You have to get the storage piece right, or you are in trouble," he said. "The fact that customers can pay by the gigabyte resonated with them because there's less risk than purchasing the storage outright."

Steve Welch, CEO at Nascent Integrated Solutions, a Los Gatos, Calif.-based solution provider and Nimble Storage channel partner, told CRN he likes the idea of utility-based pricing for flash-based storage systems.

"We have large accounts, including those building OpenStack clouds, with lots of data but who are unsure of how quickly that data will grow," Welch said. "There's a lot of risk in buying storage capacity in advance. It's hard for a lot of companies."

Such solutions are also great for channel partners, Welch said.

"The billing will be done by Nimble, who will give us a percentage of the revenue," he said. "There's zero risk on our part. And we get recurring revenue."

Gavin Cohen, senior director of strategy and market development at Nimble Storage, said his company's pricing model is service level-based, with different per-gigabyte rates based on which of four specific performance levels is required.

"The customers choose the performance level, and we ship capacity to get them started," Cohen told CRN. "We also ship extra buffer capacity to give them space to grow. Then, using our InfoSight management application, we look at how much capacity is used and then send them a bill based on the capacity."

NEXT: How Tegile And Nimble Handle Storage Array Utility Pricing

Using InfoSight, Nimble Storage can also look at current capacity as well as expected capacity and buffer capacity, to make more capacity available as needed, Cohen said. Billing is based on the peak capacity used in the prior month, he said.

There is no "base charge," Cohen said. However, there is a base capacity minimum of 40 TBs to start. "Most customers expect to use way more than that."

Cohen said the new pricing model is not a lease.

"It is a genuine, utility-based cost model," he said. "Customers are not locked into an upfront commitment to capacity. In our model, the more you use, the more you pay. For service providers, this aligns with how they already charge their customers."

Cohen declined to talk about the per-gigabyte price of Nimble Storage's utility-based pricing.

Rob Commins, vice president of marketing for Tegile Systems, said Tegile's Agility prices storage more like a cloud utility.

"We essentially put a meter on the side of the array," Commins told CRN. "It looks at the amount of data stored, how much is loaded at what time, and the data reduction information, and lets resellers act like service providers."

The program, which started in April but which only recently started taking off, requires no change in a customer's infrastructure, Commins said. Tegile Systems sells the array to Tegile Capital, which than handles the monthly invoicing of the end users, he said.

"The cost of capital is so low that, if customers never exceed the minimum configuration, they still likely get a 30 percent discount over purchasing the storage," he said. "So it's actually cheaper than a standard lease."

Commins said Tegile Systems charges 5 cents per gigabyte per month, after the data has gone through deduplication and compression.

"That's right in the middle Azure and Amazon pricing," he said.

Tegile has also rolled out a new entry-level version of its all-flash array with configurations of 9 TBs and 24 TBs, compared to the 38-TB entry configuration of its older T3800 arrays, Commins said.

"Our previous models were built using our hybrid flash and disk array heritage," he said. "But many of our customers are not replacing existing storage with all-flash arrays. Instead, they are using flash arrays to augment existing capacity.

The 9-TB model lists for $225,000. Both the 9-TB and 24-TB models are currently shipping.

In addition to utility pricing, Nimble Storage this month is also integrating its storage solutions with the OpenStack cloud platform, Cohen said.

"In the last 12 months, we've seen more and more questions from customers about using flash storage with OpenStack public and private clouds," he said.