A Time for Storage Bargains

The economy is in the dumps, companies are cutting staff and budgets, and IT spending is in decline. But for those storage managers with money to spend, it may be the best time to cut deals and grab some bargains. Just as retailers and auto dealers are offering big discounts to move merchandise out the door, storage vendors and other tech suppliers should be willing to slash prices or extend payments or provide other goodies to make a sale.

Most of you may not have much to spend, and the money still in your budgets may be targeted for things that offer a quick return on investment: data de-duplication, thin provisioning, storage tiers, e-discovery, etc. Yet, even if you substantially increase your storage utilization rate, the need for additional disks and tapes will rear its head eventually. And if you have money allocated for storage capacity or other useful applications, there is a good chance that you can put pressure on vendors and get deals that wouldn't have been available just last year.

Vendors are touting value as they make their sales pitches, whether they're peddling hardware or software or services. In recent briefings, most of the vendor executives I've talked to have emphasized new "pay-as-you-go" license models or hardware at "value" prices that offer a lower cost to get new customers on board. Prices may decline even further over the next half year or so if the economy continues to struggle.

Executives at EMC, an industry bellwether, are predicting global IT spending will decline 4 percent to 9 percent this year. During a recent earnings call with analysts, CEO Joe Tucci said there will be a steep decline in spending in the first quarter and that he doesn't expect a pickup until the second half. He said customers are demanding a faster payback for tech spending and are striving to drive costs out of their IT infrastructures.

EMC, with its diversified product portfolio, should weather the storm better than most. But other vendors in the crowded storage marketplace may have to scramble to bring in enough revenues to survive until the economy rebounds. That creates a perfect opportunity for hardball negotiations, especially for products and services that are available from a variety of vendors.You may not even have to negotiate. In a recent article, CFO magazine tells of companies that were approached by their IT vendors with deals that offered more for less. The story doesn't provide a lot of details on specific vendors or technology, but it does quote the chief financial officer of online brokerage TD Ameritrade as saying, "The prices we're getting now are the best we've seen in comparable equipment in more than 10 years."

In most cases, vendors don't want to reveal the discounts they're offering to sign deals, and customers are happy to keep the details to themselves. But the CFO story noted that some vendors -- Microsoft, for example -- are offering 0 percent financing for new customers that spend between $20,000 and $1 million on its ERP and CRM software. One content management software vendor was so eager to book a deal that it dropped its initial price of $1.5 million to $300,000, the story says.

Such deals are available throughout the tech industry, analysts say. There's even talk of a price war in certain crowded markets like e-discovery or SMB storage systems. If you are among the lucky ones with money to spend, you can probably get more technology than you ever imagined for a lower price than you would have ever predicted if you are persistent and exhibit a willingness to walk away from the bargaining table. And you can help your counterparts at other companies by sharing your stories. Click on the "discuss" link below and tell us where to find the deals.