Not So Secret Pricing

2:25 PM -- Like my friend (and fellow Byte and Switch blogger) George, I find the obfuscation, pseudo secrecy, and obstruction some storage vendors use to make their pricing opaque annoying as all get out. Apparently we're not the only ones as the U.S. Justice Department is joining a whistleblower suit accusing EMC making false statements to the General Services Administration about their pricing practices, resulting in the federal government paying more for EMC kit than they should have.

The whistleblower case also accuses EMC of paying "alliance benefits" to resellers and other partners that were connected to sales these partners made to federal agencies. Under federal contracting rules, vendors are supposed to charge the feds the lowest price they charge anyone on a similar deal. The DOJ announcement can be found here.

Vendors routinely skirt this rule by making special arrangements on deals to other customers, so sales to non-federal customers aren't a similar deal. In truth, the special arrangement may be "he was going to cut a PO two days before the end of the quarter."

Price opacity comes from two primary sources. The first is just vendor attempts at secrecy. If you're tired of having to put up with a three-hour meeting with a sales guy in an $800 suit just to realize that installing a VTL from Engulf and Devour will cost $200,000 and $30,000 per year in maintenance when you were just brainstorming about how to eliminate the $30,000 per year you're currently spending on tapes, I have a couple of suggestions.

First, fellow storage blogger Robin Harris has a price list section on his storeagemojo.com site. He collects these from users and while they can be somewhat out of date, they do reflect street prices.The other option is to take advantage of the fact that some states, including my employer the Empire State, consider the contracts they negotiate with vendors public records, so they're on the Web for state employees -- or you -- to search. Be aware that while large states like New York might buy a lot of storage gear, they may not be the best negotiators. For example, the NetApp contract for New York calls for a 16 percent discount, but the Texas price list specifies a 33 percent discount for POs over $35,000 -- and just about any NetApp filer is going to be over that.

The other source of opacity is SKU, or stock keeping unit, sprawl. Putting together a quote for an enterprise backup application like TSM or NetBackup will typically include 15 or more different part numbers for agents and options. To begin with, there are four different ways to back up a virtual Exchange server and each requires a different set of agents and options. Then the SKUs for each item change based on how much software you're buying.

For these products, even when I have a price list, I want someone else to price it out just because it's too much work.

Basically price opacity stinks, but in this economy you have appreciate anything that keeps the guys in $800 suits working.

Find out more about innovative storage. InformationWeek and Byte and Switch are hosting a virtual event on this topic on March 25. Sign up now (registration required).Howard Marks is chief scientist at Networks Are Our Lives Inc., a Hoboken, N.J.-based consultancy where he's been beating storage network systems into submission and writing about it in computer magazines since 1987. He currently writes for InformationWeek, which is published by the same company as Byte and Switch.