Tech Data offers pay-for-use kit

Tech Data is taking a leaf out of the public cloud playbook with a financing program that bundles data centre hardware and software and services into one monthly utility bill.

The catchily named “Tech-as-a-Service – Advanced Solutions” enables customers to have “private, dedicated hardware either on premises or in a colocation and pay for it as if they were in the public cloud”.

All very good, but there is a disconnect between what Tech Data is pitching and what is on offer on launch day – we can discern no data centre networking, servers, hyperconverged infrastructure and shared storage devices in the program. The initial TaaS-AS launch vendors are HP (Notebooks) , Lenovo (ThinkPad X series) , Lexmark (printers), Microsoft Surface (Windows 10) and Samsung (Galaxy Note8 Enterprise Edition, DeX Station and the Galaxy Book 12).  Presumably, the managed services bit of the contract is consumption-based.

You are what you eat

TaaS-AS may seem like an unusual departure for Tech Data, but it is business as usual for the giant IT distributor which generates most of its revenues from shifting tin. The company is in effect offering a 21st century rental agreement in response to market appetite for consumption-based pricing.

In its launch announcement, Tech Data points to an finding by analyst firm IDC that consumption-based procurement in data centres will eclipse traditional purchase methods by 2020, accounting for up to  40 per cent of enterprise IT infrastructure spend.

“We’ve seen a critical shift in the way organizations want to pay for and use their data center technology,” Jolea Kidd, vice president of Financial Solutions, Americas, at Tech Data, said in a statement. “Many have chosen not to adopt an absolute public cloud strategy, and our new program gives them the best of both worlds—the ability to pay and consume as if it were public cloud, but with dedicated hardware that resides in the location of their choice.”

The Tech Data channel partners have tools that show end-user customers’ consumption as well as chargebacks to specific areas. They will be able to see when the end user is close to capacity limits and work with them to get an add-on hardware sale which they might not have made in the past.

We have asked Tech Data about the points we make above and when it gets back to us we’ll get back to you. 

Also fit for public consumption

We note that Zadara offers virtual private storage (file, block and object services, and upcoming all-flash arrays with compression and deduplication), similarly paid for by usage-based subscription and located on-premises, in a colocation facility or the public loud. Zadara picked up a $25m C-round in September.

Pure Storage introduced a pay-for-use scheme in May 2019 , using its Evergreen Storage Serve (ES2). Customers get storage at up to 50 per cent less than the public cloud with terms as short as 12 months and a base commitment starting at 100 effective TBs.

Wells Fargo senior analyst Aaron Rakers says Pure differentiates this from public cloud offerings by charging on the basis of storage used, not storage provisioned.