Until now the OpenScale COD scheme launched by EMC in 1999 has applied almost exclusively to the company’s flagship Symmetrix storage array, allowing what the company estimates is only one or two hundred of its larger customers to install disks in storage arrays, but only pay for them when they begin to use them.

Yesterday however EMC launched automated monitoring software that it says eliminates the huge overhead of manually checking how much capacity customers are using, so allowing it to offer COD to a much larger slice of the market.

Without this tool, capacity on demand just wasn’t feasible. Trying to measure consumption on a manual basis took a long time for us, and for the customers, who wanted to check that they’re not being overcharged, said Bill Rafferty, vice president of global financial services at EMC. The company said that its COD scheme has until now involved monthly site visits to customers.

Now because of what EMC says is a fully automated usage monitoring system, OpenScale has been extended to cover EMC’s mid-range storage and NAS Clarrion and Celerra storage, its Connectrix brand of OEM’ed storage switches, and storage software such as its SRDF and TimeFinder mirroring and snapshotting utilities.

A lot of vendors can install software to collect information on-site about what a customer is using, but what’s different is whether they can automatically generate a bill from that, and whether they’ve integrated it with their accounts payable systems. That’s the issue, said Brian Babineaux, analyst at the Enterprise Storage Group.

COD simplifies the process of acquiring extra capacity to accommodate growing storage needs, reducing the frequency of sales and implementation cycles for both customers and suppliers. But according to Babineaux the financing terms behind COD are more important. These are a competitive element now that even high-end storage is beginning to become a commodity, he said.

Nobody cared about controlling capital expenditure before, when storage was a premium purchase and customers didn’t have that much negotiating power. But financing is finally coming to the forefront, because of macro-economic conditions. All the vendors have had financing programs, but until now they haven’t needed to market them. Now they’re a competitive edge.

In May and June, Hewlett Packard Co and IBM Corp reworked their COD offerings in what Evaluator Group analyst Randy Kerns said then was an attempt to popularize a concept that had never been hugely successful with customers. HP itself described some COD schemes as little more than leasing schemes in disguise. EMC said yesterday that the terms of the OpenScale have not changed, and that it involves no convenience fee. The tumbling price of storage on a per-megabyte basis is accounted for in agreements between EMC and its customers which are based on estimates of prices made by analysts Gartner, IDC and Meta, EMC said.

Source: Computerwire