Lately it seems like everyone wants my comments on Storevault by NetApp. All I know about the product is what I have read in articles on the Internet and heard from other folks. About a month ago we received a mailing to become a reseller of Storevault, but we did not respond to the mailing. I have read Dave Hitz’ blog on the product – but I don’t really understand the product placement at all.
Doing the math:
It seems like an expensive unit to me for what it delivers. 1TB Raw from (4) 250GB drives for $5000.00 seem a bit high. If it is using RAID DP than two disks of the four are needed for parity and with one disk as a spare, it does not seem to leave much room for data. I have no idea what the yearly software license and support costs will be. I have heard that the product is going to be completely supported out of India, but I have no confirmation of this. The last article I read about the product seems to confirm the 1 TB Raw unit price, but does not provide a cost for 1TB usable.
StoreVault S500 starts at about $5,000 for the base model with 1TB, consisting of four 250GB drives. It is available immediately through NetApp’s resellers.
The math as it works out from the articles & blogs I have read. (See Toigo here , Hitz here, Strange here)
Step 1) 4 disks of 250 GB = 1TB raw.
Step 2) Rightsizing of disks typically works out to about 10%, so the Net Disk Space available after rightsizing is 900GB available.
Step 3) RAID DP requires two disks for Parity 900GB – 2*(225GB) = 450GB available.
Step 4) NetApp suggests that users keep a spare disk 450GB – 225GB =225GB available.
Step 5) Typically NetApp says to keep a 20% Snap reserve for snapshots. 225GB *.8 = 180GB available.
Step 6) File system overhead – I don’t know how big the Ontap Lite OS is, but let’s assume it takes 5GB 180GB – 5GB=175 GB available
$5000.00 for somewhere between 175GB usable and 225GB usable out of 1TB raw does not seem like a very good deal to me. At CDW a 1.6 TB Snap Server costs $4859.99
I don’t know what the street price will be for the unit with 1 or 2 TB of usable data and three year software and hardware support. If the unit can provide 3TB of usable storage for under $10,000.00 it might be be a viable product.
Most of the resellers with feet on the street I speak to need a minimum of 25% margin before they can make any money on a product. It costs a lot of money to keep a salesman on the street and a Sales Engineer on staff. Will resellers be able to sell enough of these units at the $5000.00 – $10,000.00 price point to cover their costs of sales?
Perhaps a company like CDW can make a go out of the product. But when it costs about $140,000 in salary alone for a reseller company to keep a sales team on the street, it might be awfully difficult to make the team concentrate on an unproven product. If the average street price is $10,000.00 and the sales team can sell 2 units a week , they may be able to sell a $1,000,000 a year. Will there be profit left after the costs of sales and taxes to provide a profit for the owner? It is awfully expensive to do missionary sales work on a new product, it will be interesting to see what happens. See TMC here.
Please email me if you think I have made a mistake in my math. Bringing the benefits of Ontap to small business would be a great thing to do. I hope NetApp succeeds in its efforts, but there is enormous competition in the small business sector.
Happy Fourth of July!