 Gray Marketing, adj+n
Usually blamed on others when the reality is when your products are gray marketed it is entirely your fault for not remedying it, monitoring it, but mainly for allowing the opportunity for it to exist in the first place.
Paul’s Pricing Dictionary: Transfarency
March 4, 2016 by ·
 TransfarencySM, adj,
- ” Philosophy created by Southwest Airlines® in which Customers are treated honestly and fairly, and low fares actually stay low – no unexpected bag fees, change fees, or hidden fees. Created and practiced exclusively by Southwest Airlines.
Low fares. Nothing to hide.”
A lot to like in this. Nope, a lot to love in this. Value and pricing transaction experience are central to Southwest’s value prop which also stakes out a pricing leadership position as the “pricing good guy” in the US airline industry. Not hard arguably but someone had to do it. The value prop is clearly translated into the marcom message. And while a whole lot of teenage scribblers get excited over the antics of Ryan Air and other startups – yes Julie, I know you flew to Pisa for £5 from a cabbage field in Essex but this will end in tears, your children in Salonika and your baggage in Vilnius – Southwest have just kept it nice and simple and honest.
Can your business say the same? And if you’re not the pricing good guy in your industry, where on the “pricing good guy/bad guy spectrum” are you?
Ask not for whom the enterprise bellwether tolls ….. so what are the storage vendors going through right now?
March 1, 2016 by ·
Demand 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 …..
- product transitions not going to plan
- discounting “surprises”: and not nice ones either
- persistent failure to meet financial targets
- internal blame game: the competition always seems to be doing better
- lots of questions and no-one with any answers
Sound familiar?
Paul’s Pricing Dictionary: Red Life Jackets
February 18, 2016 by ·
 Red Life Jackets, adj+n,
Never complain about the color of a life jacket. Particularly red ones. Believe me, there is no such thing as “the wrong color” when it comes to life jackets. Particularly when you’re drowning. But there again you don’t have to believe me.
For life jackets of all sorts of nice bright colors – including red ones – and equally essential and illuminating pricing diagnostics: call 281-872-9821 or visit www.thepricingfactory.com
For pricing on perpetual leases for harps and other angelic instruments, call just about any other number.
Ask not for whom the enterprise bellwether tolls ….. so what is going on with storage?
February 15, 2016 by ·
Demand 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 -Â 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:Â 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
February 10, 2016 by ·
 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.
Only 4% of execs got a simple pricing question correct: 92% weren’t even close. So what can you do about it?
February 2, 2016 by ·
- Don’t Panic. See how pricing advice – even if it is lifted from HHGTTGÂ – is working already and feels pretty good.
- Realize that you don’t need to know all the answers. You just need a pricing expert who does.
- Don’t have a pricing expert? Call one ….
Ask not for whom the enterprise bellwether tolls ….. it tolls loudest for large storage businesses
January 29, 2016 by ·
Intel Data Center Group’s Year-over-year revenue growth also works as a good benchmark for large, enterprise storage companies. I’ve used this chart before:
Even though compute isn’t storage, compute does produce the data that storage needs to store.
So as we overlay Intel DCG on top of this picture, you can start to see the more extreme gyrations that storage has been going through, at least compared to Enterprise as a whole. In the early part of this decade, EMC Storage and NetApp product both outgrew Intel DCG over a sustained period. However that all went to hell in a basket very quickly during 2012. Not coincidentally this was when Dell was integrating Compellent (acquired in 2011) and dissolving its reseller arrangement with EMC leaving it with a rather nice portfolio of PowerVault, EqualLogic & Compellent to name but a few …..
Since then, all the enterprise storage players have performed very poorly, not only in absolute terms, but even more so relative to Intel DCG. And the key one to watch for is the gap between Intel DCG’s growth and that of EMC since mid-2014:
From mid-2014, Intel DCG outperformed EMC by a consistent 1500bps for 6 consecutive quarters. No wonder EMC agreed to be put out of its misery by Dell ……..
Paul’s Pricing Dictionary: Pricing
January 26, 2016 by ·
 Pricing, n, v.t., 1) sales definition: discounting, 2) product group definition: list pricing. Can’t see any room for ambiguity or confusion here. None whatsoever. Can you?
Ask not for whom the enterprise bellwether tolls …..
January 21, 2016 by ·
The WSJ highlighted some gloomy numbers from Intel’s Data Center Group recently “Intel’s Data-Center Revenue Disappoints” 01/14/16 And the WSJ is right, Intel DCG’s results were disappointing relative to analysts’ expectations, but it didn’t really pick up on what the potential implications are for other players in enterprise IT. What’s interesting is when you view Intel DCG as the bellwether for enterprise IT. After all it is at the core of the data center and everything needs compute. And being a quasi-monopoly it is the most unfiltered view that we can get of compute in the enterprise. Well, unfiltered by not having little complications like changes in market-share to distort that view. So if we think of viewing other IT vendors’ enterprise performance through the lens of how they grew their product revenue relative to Intel DCG then everything becomes a little clearer and easier to understand. Here’s what it looks like:
So this includes HP ESSN (products only remember), Cisco Products, IBM Total Systems and Dell Enterprise. Well, whenever Dell Enterprise reported its numbers publicly that is. Viewed historically, Intel DCG reported its lowest year-over-rear revenue growth for 11 quarters. What’s also clear is that in most quarters, Intel’s DCG out-grew most other major IT vendors most of the time. In fact in 17 of the 25 quarters shown in the chart, Intel’s DCG had the highest growth-rate. Takeaways are:
- Intel DCG’s growth tends to be the upper limit of enterprise vendors’ product revenue growth which also means that whenever Intel DCG has a bad time, pretty much everyone has a bad time
- If a business did out-grow Intel DCG, it was doing exceptionally well
- Intel reporting cycle is ahead of the others and as such is also an early indicator – and in this case a possible early indicator of poor enterprise results.
HP ESSN outgrew Intel DCG for one quarter in 2010, as did IBM’s Data Center Group – the DC5 of IT, yes, they really are glad it’s all over – in 2011. But that was pretty much a swan-song for IBM … and arguably Hewlett-Packard Company.
Dell Enterprise managed to out-grow Intel DCG for 5 out of 6 quarters from 2012-13. This is noteworthy because no-one else has ever outgrown Intel DCG over such as sustained period in recent history.
Here you can see the sort of grief that Cisco was going through ….. with growth rates <5% from 2011 to nearly the end of 2014 with Intel DCG out-growing them by more than 1500 bps for 5 straight quarters in 2014-15.
Reminder: revenue growth is only worthwhile if it contains calories and there a lot of segments with few or no calories. But these are relatively clean, comparable numbers that come straight from companies’ 10-Q’s.
So the big questions are can anyone buck Intel DCG’s downward revenue growth trend? Indeed, can Intel DCG buck Intel DCG’s trend? And no, that’s not a typo.
