Tegile Offers Pay-As-You-Go Financing For Hybrid Flash-Disk Storage

Hybrid flash-disk storage array developer Tegile Systems is unveiling a new financing option that allows customers to pay only for as much capacity as they actually use on a monthly per-gigabyte basis.

The company also said it is working with its solution providers to help them take advantage of changes in Dell's Compellent storage solution and try to grab part of that business.

The pay-as-you-grow option for Tegile's hybrid flash-disk arrays is based on the vendor's ability to meter customers' actual capacity utilization of those arrays, said Rob Commins, vice president of marketing for Newark, Calif.-based Tegile.

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"This helps us monetize the value of our in-line dedupe and compression technology," Commins said. "I'm essentially taking the metered capacity down by 50 percent to 75 percent. Customers get the variable costs of a cloud model, but get the benefits of keeping data in their on-premise data center."

The monthly cost can go up or down, Commins said. "It could go down, for instance, if virtual machines go away, or a project is cancelled," he said.

To show how the pricing works, Commins said a customer who only uses 10 percent of the array's capacity is billed for 10 percent of that capacity divided by 36, which is the number of months in the contract. If the customer in the following month uses 18 percent of capacity, the monthly rate rises to reflect it, he said.

"Tegile could end up leaving money on the table," he said. "But we are making a bet that customers' capacity will grow over time."

The Tegile pay-as-you-go model can also be applied to other technology such as Cisco UCS servers, which provides usage metrics, Commins said.

The pay-as-you-go model will be a new one for customers to understand, but it could work very well for them, said Scott Robinson, president of Xioss, a Minneapolis-based solution provider and Tegile channel partner.

"Pay-as-you-go is great if it is priced right," Robinson said. "You have to help customers understand how it would cost them less than other models. But as long as Tegile has tools to help customers see how under-utilized their capacity is, it could work."

NEXT: Making A Grab For Dell Compellent Customers

Thanks to the increased use of cloud computing, customers are getting used to buying on an operating expense basis vs. a capital expense basis, Xioss' Robinson said.

"With all that's happening with Amazon Web Services and other clouds, customers understand the benefits," he said.

Tegile's Commins said customers can still work with their solution providers to purchase the Tegile arrays outright or sign a standard lease.

Commins said that Tegile has also been moving to grab storage refresh opportunities from Dell's Compellent technology.

Given that Dell is in the process of upgrading its Dell Compellent storage family, Tegile sees this as a good time for its partners to go after Dell customers, Commins said.

With Tegile's in-line dedupe and compression technology, customers need 50 percent to 75 percent less capacity using the Tegile arrays than if they use Dell Compellent, he said.

"For Compellent partners not sure of what to do with the Dell road map, here's an opportunity to maintain their relationship without selling Dell," he said.

Robinson said Tegile has hired several ex-Compellent people who know where the Dell Compellent customers are.

"The timing is right," he said. "Compellent is going through a refresh cycle with new controllers and appears to be raising the cost of its technology."

PUBLISHED NOV. 15, 2013