Tuesday, April 18, 2006

Does NetApp charge so much for its software because customers have incomplete information to make an informed decision?

According to an article in the Economist April 15, 2006 edition on page 78 - Physicians and Lawyers wives have much fewer surgeries than the general population. The article says that this is because Surgeons have better information than the general population, and that Surgeons fear operating on Lawyers wives. This same article points out that Real Estate agents on commission sell houses cheaper than they would their own house.

If customers had complete information about NetApp's hardware and software policies inevitably their cost of storage would fall. And while there is competition for NetApp in the general storage market. Once a customer buys into the NetApp value proposition, Zerowait is the only viable option for transferable licensed filers , and service and support for NetApp's equipment.

The best time to purchase from NetApp is at the end of the quarter or the end of their fiscal year. This is because the sales department wants to make as much money as possible so they will cut their prices to sell more equipment. Additionally, the NetApp salesperson is into his Commission Accelerator period at the end of the year, So his commission rate is higher. Just like a real estate agent NetApp's sales folks will cut price to sell more product, and raise his income.

As NetApp's end of year is fast approaching, the best way to get price concessions from NetApp will be to show them competitive quotes. Either from Zerowait or from one of the other storage vendors. And remember to insist on getting your transferable software licenses from NetApp.

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