Everybody loves a bargain - especially in tough times like these, where every dollar needs to stretch as far as possible. So what can you expect when it comes to getting a deal buying storage and servers? Here at Ideas International we have conducted some research into discounts and what you can expect when dealing with IT Vendors for server and storage products to give you some insights.
The chart above provides a high-level view of the general outcomes of IDEAS’ street pricing research from our Competitive Profiles offering. It includes analysis of over 18,000 data points for the US market, across 7 companies and 40 product families, covering approximately 400 individual products.
The chart plots data from three separate categories - Reseller, Government, and Enterprise - along escalating “Product Value” bands. Band “1,000” represents products with a value from $1,000 to $9,999 USD, band “10,000” represents products with a value of $10,000 to $99,999 USD, and so on. The chart plots the average discounts across these bands to generate a discount trend line from lower value to higher value products.
Whilst individual customer discounts will vary, the result is a good overview of the industry average discounts that you may expect across a broad product value spectrum. The product discounts are based on a combination of base packages for servers and storage, individual parts such as disk drives, as well as configured systems in some instances. The chart indicates that as the value of the sale goes up, so does the discount - so no surprises there. However, it is reassuring to see such an outcome based on a very large dataset, covering such a broad range of products and values.
Things to note include:
- This chart provides a consolidated overview across several companies and many products to provide a simple trend message. However, the discounts offered by different companies and even for the same company but across different product lines, can vary significantly.
- The research doesn't take into potential "per deal" discounting that occurs, where a vendor may really want your business and thus offer even better rates. So it is likely that discounts on average could be even higher than the chart indicates.
- Most of this research was conducted before the full force of the financial melt-down occurred and so discounts now may now be even higher.
- Finally, an interesting finding from the research was that some resellers were quoting prices above the vendors' current List pricing for products. This caused a few raised eyebrows in the research team because it challenged the conventional perception, that resellers always work with prices below List.
The findings boil down to the realisation that just like the average consumers buying a car, IT customers need to do their research and get a feel for the companies they will be working with, before they start doing deals, in order to be positioned to extract the best outcome possible.
I would be interested in any insights or feedback that you may have about how this research compares to your experiences. Please post your comments below.
The above is a synopsis of a full article that appears in the February 2009 edition of the free Ideas International Tech Trends Monthly newsletter. You can download the latest and past issues of the newsletter for free. You also have the option to subscribe to future complimentary issues.
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