“Never confuse motion with action.”
Benjamin Franklin

Does putting a product in a different package improve the product at all? The reason I ask is that IBM announced that it is selling NetApp’s FAS270 today for $50,000.00 for a 0ne TB package. However, a quick review of the test results at spec.org will show that this unit provide less performance then the F840 that NetApp sold a couple of years ago. So it seems like a lot of money for less performance, then you could get two years ago. Here is the article, I hope that IBM is including transferable licenses with the units. Because that would be a great way to help customers retain the value of their units. But as consumers our savvy customers should be able to get more competitive quotes now from the myriad of sources for the NetApp and IBM equipment since there are now four channels selling the same product. NetApp direct, NetApp resellers, IBM Direct and IBM resellers. Since there is no product differentiation the only difference will be price. So the sales process could turn out to be very similar to dealing with a car dealer and haggling on price will be the differentiator.

The last time NetApp tried to distribute it products through a major channel was with Dell Computer. Those Dell units were left without a lifeline when that agreement fell apart. I hope the folks at IBM have carefully read the DELL – NETAPP OEM agreement on Findlaw as it might help them manage their relationship.

Page 6 of the agreement was interesting.

within the scope of the above license. Neither Dell (except as provided in
Section 14 (Escrow)) nor any of its End Users is/are entitled to receive any
source code, source code documentation or similar materials relating to the
Licensed Non-Ported Software Materials. All End Users will receive Licensed
Non-Ported Software Materials subject to all of the terms and conditions of the
End User License.

6. Prices; Payment Terms.

a. Prices for OEM Products. NetApp agrees to sell OEM Products,
related options and software, protocols, software subscriptions and upgrades at
the prices and discounts specified in Attachment A-1, Section f.

b. Cost Reduction Assistance. Dell agrees to exercise commercially
reasonable efforts to assist NetApp in lowering its commodity costs for OEM
Products as provided in Attachment A-1, Section g.

c. Favorable Pricing. NetApp shall provide to Dell favorable pricing
for OEM Products as provided in Attachement A-1, Section h.

d. License Fees for Licensed Products.

License fees in conjunction with the Licensed Products (“License Fees”) shall be
payable to NetApp in conjunction with the Licensed Products as set forth in
Attachment B-1.

e. Payments. Dell’s payments to NetApp shall be made in U.S. dollars
as follows:

(1) For OEM Product orders with Dell’s EMF (European
Manufacturing Facility), Dell will make one (1) monthly telegraphic payment to
NetApp on the first working day after Dell’s fiscal month close. This payment
will be for valid invoices received and dated during the fiscal month prior to
the month just closed. (Example: Payments for the fiscal month of August will be
made on the first working day in fiscal October.)

(2) For OEM Product orders with Dell’s APCC (Asia Pacific
Customer Center), AMF (American Manufacturing Facility), and all other
affiliates, Dell will make telegraphic payment to NetApp forty-five (45)
calendar days after the date of a valid invoice from NetApp.

(3) License Fees and Hardware License Fees with respect to
Licensed Products shall be paid pursuant to Section 6(g) below.

No payment by Dell or receipt by NetApp of a lesser amount than the amount of
invoice shall be deemed to be other than on account of the earliest due amount,
nor shall any endorsement or statement on any check or letter accompanying any
check or payment be deemed an accord and satisfaction, and NetApp may accept
such check or payment without prejudice to NetApp’s right

Interesting stuff, and I wish IBM good luck.

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