Why should network devices be exempt from capacity-on-demand pricing?
Network decision-makers basically have had to choose between two options for equipment acquisition: purchase or lease. But in this era of infrastructure-as-a-service, where you can essentially rent much server and storage capacity as you need at any given time, why should network devices be exempt?
Over the past couple of years, Brocade has been offering network infrastructure under a new “capacity-as-a-service” model, in addition to its purchase and lease options. The Brocade Network Subscription allows organizations to add capacity at will, as well as to reduce or terminate the agreement with minimum notice. In 2013, Brocade expanded the program so its partners can offer financing on a complete customer purchase — including all services, support and third-party equipment
What’s the difference between subscription and leasing? Leasing, as TechTarget’s SearchNetworking summed it up, “only shifts costs from capital to operational, and lease agreements bind a customer for a minimum number of years, charging a penalty if the enterprise backs out of the deal early.”
So if you want to look into the rent vs. lease vs. buy equation, what are some of the questions you should be asking? Here are three as they apply to the Brocade program:
How does this differ from a lease?
A lease is a means of financing a purchase over a fixed term and often includes finance changes, penalties for early termination, and origination fees (Note: Brocade does not charge origination fees on its leases). Leases typically are treated as a liability on the lessee’s balance sheet. Brocade Direct Support is included in the subscription, which is billed monthly after the equipment has been delivered. Organizations do not incur depreciation expenses as there is no transfer of title.
For how long am I locked into the subscription?
There is a 60-day notice to decrease capacity or terminate equipment. Subscribers can upgrade or refresh products at any time by initiating a new subscription schedule, with no penalties or hidden fees. A new monthly subscription charge will be established to reflect the difference in performance, features, and capabilities of the upgraded products.
What are the hidden costs?
Many IT and network execs today face a near impossible task: operate their data networks in the most cost-effective manner possible, but be ready to scale up (or scale down) at a moment’s notice as the demands of the business change. Adopting a pay-as-you-go approach may represent the sanest approach to deal with that conundrum on a daily basis. It’s the most logical way to align network capacity and performance requirements with the needs of the business.