Startup gives Datrium DVX subscription pricing

As it extends its use of the cloud, storage startup Datrium is moving to a cloud-like pricing model.

With Datrium Forward, the vendor is adopting software subscription pricing that allows customers to move licenses from on-premises storage to public clouds -- Datrium currently supports AWS, with plans to add other public clouds. Datrium bills DVX storage as an alternative to traditional networked storage that also goes after the same workloads as hyper-converged systems.

"We believe this is where the industry is going," said Tim Page, CEO of Datrium, based in Sunnyvale, Calif. "The theme we keep hearing form CIOs is we need to be cloud-first. The IT infrastructure guy will tell you, 'We have a lot of stuff on-prem that can't go to the cloud.' This allows someone with that strategy to avoid sunk cost in an internal data center. If they want to port everything into the cloud, we'll provide services into S3 and other clouds, and they can port their data to wherever they want it to go."

Page said current customers can stick with traditional pricing or switch to subscription pricing, but all new systems will be sold with the subscription model. He said Datrium has more than 350 customers for DVX.

Datrium DVX systems consist of data nodes and compute nodes, with storage management software. The compute nodes are servers running DVX software for features such as deduplication, compression, snapshots, replication and encryption. Data nodes can be disk or flash storage drives. Customers can pool 128 hosts and 10 data nodes for more than a petabyte of capacity in a DVX cluster.

The Datrium Cloud DVX backup service protects data on AWS. Its cloud disaster recovery orchestration feature, CloudShift, is due in late 2019.

Customers will still pay upfront costs for the data nodes, which have a current list price of around $43,000 for 48 TB of all-flash storage.

Datrium already sold Cloud DVX as a subscription, at $6,000 for 5 TB of AWS capacity. With Datrium Forward, all the software will be subscription pricing, and it will be fixed over the term of the subscription.

The licenses can be moved across hardware systems and AWS. Host software will be priced per node and per year, with storage services priced per terabyte, per year. Datrium will offer three-year or five-year subscriptions for on-premises systems, and cloud software subscriptions will be available for one or more years.

Datrium claims its data reduction rates typically range from 2-to-1 to 6-to-1 ratios, making per-terabyte pricing much more cost-effective.

Datrium has not published its exact subscription prices. Page said average selling prices should be roughly the same as current pricing at the start. But, "over time, this makes it easier to scale," he said. "We have a flat renewal rate, even if you're changing out the hardware. Renewals will be flat for the next 10 years or so. They don't have to plan for spikes in support costs and so on. The licenses can be transferred on any type of equipment they want to run on."

One early Datrium customer said he is looking for Datrium Forward to give him more predictable pricing. Bryan Bond, director of IT infrastructure for Siemens Digital Grid business, said he is considering moving to Forward pricing as he works on his next budget cycle.

To me, it's about the predictability of the cost. If you don't know how much you're going to have to spend, it makes life a little rough.

"This has a cloudy feel to it," Bond said. "To me, it's about the predictability of the cost. If you don't know how much you're going to have to spend, it makes life a little rough."

Bond said one reason he switched from Nimble Storage to Datrium more than three years ago was because Nimble would have cost four times as much as Datrium for the same performance. He said he expects Datrium Forward pricing would lower cost more by helping him spend smarter and not waste money on storage capacity he doesn't yet need.

"It's an interesting model," he said. "When they first pitched it to me, I wasn't sure. But as we talked through the scenarios, it made more sense. We look at it as a way of managing costs, avoiding hockey stick purchases. I won't have to buy 100 TB of storage because I need 20 TB right now. You know how it goes: You don't need storage, you don't need storage, and then all of a sudden you pay $100,000 for storage. And then you don't need storage anymore.

"This model would make it easy for me to budget and predict when I'm going to spend," he continued. "I can say, 'My storage is going to increase X percent over every month for the next 18 to 24 months. I can easily predict how much I'm going to spend.' And I can move capacity off site and move it back without having to respend or change my licensing."

Bond said Siemens has nine DVX shelves at its Foster City, Calif., office and another in India for a total of 600 TB of usable capacity. Datrium is his main storage production storage system. He said he hasn't figured out how much Forward pricing will lower his cost, but "I'm fully expecting to see some savings, because I will be spending money differently and at different times.

"If you change the way you're looking at your budget and you're doing it more evenly across the year, you're not ever going to the end of the year and say, 'Oh, no. I need to spend half a million dollars, or its going to be really hard for me to ask for it next year.'"