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Pure Storage Seeks to End Maintenance-Fee Extortion

The use of increased maintenance fees to push customers into upgrading systems is a time-honored tradition. The theory is that it’s always less expensive and, thereby, more profitable to support the latest generation of any given product. But Pure Storage, a provider of solid-state storage systems, is now making the case that artificially increasing maintenance […]

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Michael Vizard

Feb 18, 2014

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The use of increased maintenance fees to push customers into upgrading systems is a time-honored tradition. The theory is that it’s always less expensive and, thereby, more profitable to support the latest generation of any given product.

But Pure Storage, a provider of solid-state storage systems, is now making the case that artificially increasing maintenance fees on legacy systems essentially amounts to a form of extortion. In its place Pure Storage advocates the adoption of a new Forever Flash business model that allows customers to reset the maintenance time clock at first-year rates each time they expand their storage system or add a controller.

Also, Pure Storage is making it possible for customers to receive a controller upgrade every three years when they renew their maintenance agreements in years four or seven of a contract. An additional two years of maintenance must be purchased at this time to qualify for the controller upgrade, but the program also allows customers to pre-buy five years of maintenance, receiving a controller refresh on year three of the contract.

The end goal, said Max Kixmoeller, vice president of products for Pure Storage, is to eliminate the practice of using maintenance contracts to force customers into a forklift upgrade unless it’s at a time of their choosing.

“We’re trying to make it easier for customers to just buy what they need now,” said Kixmoeller. “The storage industry has a history of using maintenance-fee extortion to get customers to buy the maximum amount of storage.

The timing of the new Pure Storage upgrades coincides with a rise in interest in all things relating to flash storage in the channel. David Hill, principal analyst for The Mesabi Group, notes that a lot of IT organizations are looking to replace expensive, often underutilized high-performance magnetic storage systems with solid-state drives (SSDs) that not only provide better performance but also wind up frequently lowering the total cost of storage in the enterprise.

Although it’s not clear how much maintenance fees will play into the ultimate selection of SSD storage, Hill noted that it may become a factor when deciding which SSD storage vendor to go with.

“Maintenance fees are often viewed as just a cost of doing business,” said Hill. “It’s hard to say that’s ultimately going to be the reason customers will choose one vendor over another.”

Pure Storage is betting it will. But what remains to be seen is just how many other vendors will abandon their existing approaches to maintenance fees and—perhaps, more interestingly—the business models of solution providers that sell storage in the channel.

Michael Vizard has been covering IT issues in the enterprise for 25 years as an editor and columnist for publications such as InfoWorld, eWEEK, Baseline, CRN, ComputerWorld and Digital Review.

Michael Vizard

Michael Vizard is a seasoned IT journalist, with nearly 30 years of experience writing and editing about enterprise IT issues. He is a writer for publications including Programmableweb, IT Business Edge, CIOinsight, Channel Insider and UBM Tech. He formerly was editorial director for Ziff-Davis Enterprise, where he launched the company’s custom content division, and has also served as editor in chief for CRN and InfoWorld. He also has held editorial positions at PC Week, Computerworld and Digital Review.

Pure Storage Seeks to End Maintenance-Fee Extortion

Michael Vizard

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