Make Your Mark
Your customers might be able to find a better price, but can they find a better value? Andy Pratt, president of integration services company Unique Digital Technology, makes his mark by knowing vertical markets and offering special programs, like storage on demand, to his SAN customers.
"With the full force of the Internet in place, you can buy the storage products I sell from anywhere, so all I have is my service and my reputation," said Andy Pratt, president of integration services company Unique Digital Technology (Houston). Pratt knows he has many competitors that can undercut his prices by 5%, so he must offer his customers the better value, both now and down the road.
Pratt knows storage. He has been part of storage evolution since 1986 when he founded his own company. He started offering tape solutions, then RAID (redundant array of independent disks), and now is a storage veteran implementing SAN (storage area network) solutions. In addition to the banking and legal markets, a natural vertical market for Unique Digital's services is the oil and gas industry, since its headquarters are in Houston. His largest installation is in Houston, but he also has oil and gas vertical installations in Aberdeen, Scotland, and Calgary, Canada, two other oil industry hot spots.
If you know anything about the oil and gas industry, you know that massive amounts of data must be collected to analyze if these resources are underground. Therefore, storage capacity and performance are key. Pratt believes that what he's selling isn't so much hardware and software, it's productivity.
Value Add: Productivity And Server Consolidation
To help organizations become more productive, Fibre Channel SANs consolidate storage and servers and also streamline storage management. Many of the tasks that were previously managed by IT personnel can be managed by the storage management software within the SAN. In a SAN environment, a program that used to run for two hours can run in as little as 30 minutes, quadrupling performance over the old system. With a SAN, according to Pratt, the question isn't so much how much it costs but how much it will save the customer. This leads to the need for fewer IT staff members.
Pratt says it's sometimes a sensitive issue selling a SAN that allows a company to redeploy half of its IT staff. The key, he says, is in talking to the right people. He sees a four-tier decision-making structure in most of the companies he deals with. In his experience, storage purchase decisions are shared equally between the end user, IT staff, middle management, and top management. Therefore, he claims it is imperative to interface with all these levels. In a big company like BP, there might be 25 to 50 relationships that must be cultivated and maintained. In a small company, there are from 3 to 10. Pratt must know all the decision makers and influencers in the company in order to effectively sell a solution.
Having the bandwidth to reach all the decision makers is one of Pratt's biggest challenges. So he's hired a full-time marketing person and two outside consulting firms to analyze the customers and to reach all levels most effectively.
Value Add: Develop Innovative Storage Programs
VARs and integrators know that anticipating the needs of customers in a vertical market is imperative. Fulfilling those needs requires creative thinking and problem solving. When one of Unique Digital's oil acquisition SAN customers lands a large contract, it needs to increase its storage capacity in a hurry. For the past couple of years, the storage industry thought SSPs (storage service providers) would be the key in providing fast capacity increases like this to end users. But Pratt never saw much practicality in SSPs. He felt that in the long run they were too expensive for the customer and not profitable enough for the SSP, so he thought up his own solution.
Pratt calls it storage on demand, but it's more like a "rent to buy" program. This is one of the ways he adds value to the solutions he provides and how he differentiates himself from the competition. For example, because of his connection to the oil industry, he's able to find out who all the bidders are that respond to an oil company's RFP (request for proposal). Unique Digital contacts each of those bidders and inquires about their need for additional storage to handle the potential job. Of course, if there are five bidders, only one will get the job, but Pratt is ready with the storage. When his customer is awarded the contract, Pratt installs the tape library or a RAID system. The customer is then able to process the job, which is usually completed within 60 to 90 days. At that time, the customer could return the unit, but most of the time, this initial rental has allowed the customer to bid on more jobs and the unit stays put.
Coming up with a pricing structure for this "rent to buy" program involved some analysis by Unique Digital. "We went to the blackboard with our accountant," said Pratt. "We determined the cost of the unit, marked it up to the quotation price, and decided to charge 10% of the quotation price per month." If the customer decides to purchase the unit within 30 days, 80% of the rental cost is applied to the purchase. If the purchase decision falls within 60 days, the rate is 70%, and if the decision is made within 90 days, the rate is 60%. Beyond that, there is no credit given, so the unit is either purchased or returned within 90 days.
In addition to the rental fee, there is a cost for installation. The type of components the customer needs may vary, depending on the type of storage that's being rented. Connection devices such as GBICs (gigabit interface converter) and HBAs (host bus adapters) are usually required. In addition, if the customer rents a DLT (digital linear tape) or LTO (linear tape open) tape library or RAID device, a router will be needed to attach it to a SAN. Unique Digital usually chooses Crossroads (Austin, TX) routers for this purpose.
Pratt offers this service only to his existing customers as a service, and these customers are prequalified beforehand. If there isn't a high probability that the customer will buy the extra storage within 90 days, Unique Digital isn't likely to provide this service.
Value Add: Service Down The Road
Most of Pratt's customers are Fortune 1000 companies that could probably handle their storage needs on their own, but they choose to outsource instead. "These customers are looking for a relationship, not a one-time buy," he said. To keep customers, in addition to offering analysis, planning, professional services, installation, and training classes, Unique Digital offers 24/7 service coverage. It is the first call a customer makes when problems are encountered.
Helping the customer avoid problems at the purchasing stage is sometimes the key to avoiding a problem down the road. "Sometimes the customer wants us to bring in a fringe product from a company without the capital backing to sustain the technology. We prefer to deal with companies that provide leading edge technologies, not bleeding edge. So, sometimes saying no to a customer is the best thing you can do for yourself and for the customer."
Pratt helps his customers make intelligent storage decisions by knowing their vertical markets. For instance, in the oil and gas industry, he keeps an eye on the President's energy plan, and in banking, he's aware of new laws that require banks to store more data. By knowing the outside factors that can affect a customer's storage requirements, this integrator can anticipate future opportunities. And by offering new solutions, like his "rent to buy" program, he can make his mark and gain the trust of his customers.Questions about this article? E-mail the author at AnnS@corrypub.com.