Consumption Economics: A Fit-For-Purpose Model for a Transformed World

BrandPost By Nadia Weekes
May 17, 2021
Technology Industry

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Credit: iStock

The impacts of the coronavirus pandemic have placed pricing flexibility in the spotlight for companies eager to access a seamless hybrid cloud experience without the financial burden of lengthy procurement cycles. By aligning IT economics to business priorities, the NetApp Keystone Flex Subscription offering provides an invaluable tool for CIOs looking for a pay-as-you-grow service.

With uncertainty dominating people’s lives and affecting business plans, the ability to deliver on the specific goals they need to achieve — for example capacity and level of performance — against the backdrop of what their organizations can afford has become an even more pressing priority for IT leaders.

“Consumption economics fits around the budget envelope and allows IT teams to configure the service as they wish, in alignment with business outcomes,” says Sheila Rohra, Senior Vice President of Customer Success at NetApp. The pay-by-the-drip nature of the Flex Subscription contract means you can exit after a minimum term of one year. Rohra highlights how this provides greater flexibility at the same time as involving lower financial risk.

Being able to avoid the constraints of a long-term capex investment in a service solution does not simply have the potential to save money, however. It allows a fundamental shift in how CIOs think about their business, according to NetApp’s Head of Customer Experience Office, Biren Fondekar.

“CIOs can just focus on their business outcomes without being locked in. This is a game-changer,” says Fondekar. By reproducing the kind of experience they have grown accustomed to by using the cloud, IT leaders can use the Flex Subscription service to access the same cloud experience on their premises as a waypoint on the cloud journey.

An additional bonus is that Flex Subscription allows CIOs to choose who operates each piece of infrastructure, which translates into more flexibility and lower risk overall. Because the journey to the cloud is something IT leaders are already familiar with, consumption economics fits perfectly within that mold by helping make the transition even more seamless.

“Cloud computing, managed services — be they remote or digital — are megatrends that are creating a shift to consumption economics,” says Rohra. By liberating CIOs from the strictures of a long-term capex commitment, Flex Subscription is not only providing financial and business flexibility, but also aiding organizations with their digital transformation and cloud journeys.

Consumption-based offerings are an ideal starting point on the way to full cloud-based services, for example by way of providing backup, explains Rohra. “So it’s not just a service that you pay by the drip, it’s also a steppingstone to migrate to the cloud,” she says.

By taking infrastructure out of the equation, Fondekar points out, consumption models allow CIOs to focus on business outcomes. “The infrastructure  just happens in the background,” he says. “All the things you’d normally have to do with the data, for example safety and security, is now done for you.”

Consumption economics has allowed the conversation to shift from the product’s bells and whistles to the actual kind of performance and financial flexibility a business is looking for, adds Rohra. “It’s more about understanding the customers’ business needs and translating those into design and infrastructure so they can consume our technology the way they want to in order to achieve their business outcomes.”

For new customers especially, Rohra observes, the consumption-model conversation is a great ice breaker. Regardless of the model they choose to adopt, it is a good starting point that allows the focus to be on how to make the relationship successful.

There are cases when a company’s core legacy applications are best left on-premises, at least for the time being. The NetApp Keystone Flex Subscription service  is ideally suited to tie edge locations back into a core data center.

“I think we’re going to be in a hybrid environment for a very long time,” adds Fondekar. “Customers are looking at their data holistically,” he says. “Terabytes of data can’t all be moved quickly to the cloud. So a hybrid architecture can be the best solution.”

It is important for customers to be able to choose the configuration that suits them best. Focusing on the use case is key. At a time of post-pandemic recovery, organizations are keen to avoid over-provisioning their systems in the longer term when all they may need is a short-term fix.

“We see more and more conversations in our pipeline where customers are focused on outcomes,” notes Rohra. “They are less and less interested in on-premises infrastructure. They want NetApp to give them the flexibility to figure out their cloud strategy and cloud transition. So it’s about transitioning towards outcomes in the spirit of flexibility.”

Remote management is a key part of automation. With fewer humans on site, at the data center, the use of NetApp’s Active IQ digital advisor provides insights to the infrastructure, while also giving the flexibility to cope with greater volumes or different business outcomes. “All of this can be done digitally,” explains Rohra, “so we don’t need a wrapper of managed services around it, and the whole experience becomes fast and simple.”

When the infrastructure is automated and self-healing, a number of important tasks that would normally take time to manage and execute are handled digitally. “Simple things like fine-tuning your infrastructure and ensuring your capacity is adequate, they used to be done by humans. Now they’re done by machines,” says Fondekar.

This leaves CIOs free to focus on what really matters to their organizations: delivering the best possible IT services that deliver efficient and lowest-cost outcomes that are fully aligned with their business objectives.