It looks like there might finally be some price competition coming to the enterprise storage market thanks to competitive market forces and it should help NetApp’s customers. I don’t think I have ever seen a more fragmented product marketing strategy by one company.

Over the last few weeks we have seen some very interesting comments from NetApp on their pricing and their marketing strategy. First there was Dave Hitz saying NetApp will lower prices to gain market share “We have a single software system, and we can cut our prices to gain market share,” he says.

According to NetApp’s Leonard Iventosch “Before, we dialed for dollars, set up appointments and sent the lead to the partner,” he said. “Now we will get the lead, follow up with the customer and the channel partner, and make sure the customer stays engaged.” So it looks like the customer will be able to negotiate price with the partner, but also start shopping with other NetApp sales channels. Where will the IBM OEM versions of the NetApp products fit into the pricing picture? Will IBM sell their OEM versions for less than the NetApp channel and direct sales force? Will customers be able to get competitive bids for the same product from NetApp’s direct sales force and NetApp’s partner sales force, and IBM’s direct and channel sales force?

How will Pillar Data affect the pricing picture especially within the Oracle NAS storage Niche that NetApp values so highly? And now there is competition from Larry Ellison’s Pillar Data – “ $100,000 for 12 Tbytes: This system seems to target a real sweet spot that’s missed by other storage vendors. It’s unusual for us to buy from a startup. But it’s such a departure from the existing storage paradigm that it’s worth it to take a leap.”

It seems like there will be a lot of competition for NetApp’s sales in the next few months. Savvy customers will get quotes from all of the different competing sales forces and take the lowest price, because the service and product will be identical.

Competition is good for the customer, and the coming months look like a great opportunity to grow your storage while reducing your costs. There are several successful purchasing strategies that our customers have used over the years in negotiating with NetApp, but getting competitive prices is always the best.

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