Paul’s Pricing Dictionary: Bad Selling

P 150x150Bad Selling, adj.+gen.

Bad Selling is somehow always absent as an option in Bid-Loss analysis. But if there ever was a Bid-Win analysis, I’m sure that Good Selling would somehow get 100% of the credit. Of this I feel absolutely sure.

 

Previously from Paul’s Pricing Dictionary:

Happiness, n. A feeling of well-being which is directly proportional to your gross margin %.

Insight, n. What your Pricing Team should be providing you with. Insight from your Pricing Team should come in two distinct flavors:

Business Insight, n – into your business performance

Competitive Insight, n – into your competitors’ performance

Margin Recovery Plan, n. A work of complete fiction written by Sales in the hope that no-one else will read it and, most of all, the author will not be held to account for its contents. Ever.

Price, n. Value, plus a reasonable sum for wear and tear of conscience in demanding it. (qv, Ambrose Bierce, The Enlarged Devil’s Dictionary)

Strategic Deal, n. deal struck at a massively negative gross margin by CxO or Executive Sponsor, usually without any hope of margin recovery. See Margin Recovery Plan.

Ask not for whom the enterprise bellwether tolls ….. so what are the storage vendors going through right now?

One-man-looking-at-anotherin-a-crowd-white-border-190x156Demand for storage is increasing rapidly, yet the big storage businesses seem to be in worse shape than ever. In a previous blog I discussed why (I think) it is happening: a number of concurrent technology transitions; competitive forces from traditionally non-storage market entrants; and an increased rate of change.

So what are the major storage vendors going through right now? Here are just five effects …..

  1. product transitions not going to plan
  2. discounting “surprises”: and not nice ones either
  3. persistent failure to meet financial targets
  4. internal blame game: the competition always seems to be doing better
  5. lots of questions and no-one with any answers

Sound familiar?

Ask not for whom the enterprise bellwether tolls ….. so what is going on with storage?

One-man-looking-at-anotherin-a-crowd-white-border-190x156Demand for storage is increasing rapidly, yet the big storage businesses seem to be in worse shape than ever. Why is that?

Firstly new technology is causing turmoil which the traditional players aren’t managing well. Virtualization, the reduction in cost of SSDs as well the realization that NLSAS may have something to offer – particularly in combination with SSDs – and the development of public cloud (as effectively a new channel), has created a myriad of opportunities for smaller, more nimble players throughout the supply chain.

Secondly, competitive forces. These opportunities for storage start-ups is also rather ironically fueled by those sluggish majors who are prepared to pay well over the odds to acquire the best/most fashionable/sexiest start-ups to bolster their gapped-out portfolios. And then there’s the arrival of Dell as a major player with the acquisition of Compellent to bolster its EqualLogic acquisition and organically developed PowerVault line. This more than anything probably struck fear and panic into the sector as a whole with Dell’s superior supply chain, unique reach into SMB, and probable presumed tolerance of lower margins – and thus lower prices – than the traditional storage majors.

Thirdly, the rate of change in storage has increased dramatically. Instead of their being (like) one major product announcement and one significant price action per year, since 2010 there have been multiple product announcements and price actions per year. I think that this this has been a pre-emptive strike by the majors – getting their retaliation in first – in anticipation of further heat from both Dell and those pesky, attention grabbing start-ups.

Paul Alcorn writes about the whole problem – albeit more at the component rather than the solution level – in Tom’s IT Pro: The Week In Storage: If We Are Running Out Of Storage, Why Can’t They Sell It?

But his punchline is worth pondering: “The changing sales mix from client HDDs to high-capacity enterprise HDDs is hurting the profits of the larger HDD vendors. SSD vendors should be reaping the rewards of the exploding SSD market, but surprisingly in the midst of the data deluge, some of the flash storage vendors apparently could not sell a cup of ice water in the desert.”

I would expand his punchline beyond flash storage vendors, and include the storage majors in that group too.

So what are the major storage vendors going through right now?

 

Paul’s Pricing Dictionary: Bad Selling

P 38x38 Bad Selling, adj.+gen.

Bad Selling somehow never appears as an option in Bid-Loss analysis … but if there ever was a Bid-Win analysis … Good Selling would somehow get 100% of the credit. Of this I feel sure.

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