What are your post-lease options?

March 4, 2011 – When your lease or warranty runs out (or even when you’re on lease or warranty), you have a number of options. You can undergo a total technology refresh and buy new systems from your primary storage supplier – an expensive option, and it’s likely that you don’t really need the latest and greatest gear. Or, you can re-up and sign an extended service-and-support agreement with your primary vendor – another expensive option.

Alternatively, you can contract with a third party that provides support for all kinds of IT hardware. But let’s say you’re a NetApp shop: What level of expertise does a general-purpose third party really have on NetApp systems?

A third alternative is to sign a services-and-support contract with a third party that specializes specifically in the type of hardware you have. In the case of NetApp systems, a good example is Zerowait.

I recently chatted with Mike Linett, Zerowait’s president and CEO, and Rob Robinson, the company’s vice president of sales.

Zerowait specializes in service and support of NetApp equipment – and only NetApp. Prior to 2002, Zerowait was a NetApp reseller, but when NetApp nixed that deal Zerowait moved into the service and support business, competing with NetApp.

Linett claims that Zerowait typically charges about half of what NetApp charges for service and support. But according to one of Zerowait’s customers, the savings could actually be much higher.

“Zerowait is 50% to 90% less expensive than NetApp, depending how old your hardware is,” says Balazs Nagy, manager and chief architect at NewPush, an application and data warehousing hosting company. “The older the equipment, the more prohibitive NetApp makes it for service and support, and if the equipment is very old NetApp won’t even support it.”

NewPush has a services and support agreement with Zerowait that covers four NetApp systems.

Besides the basic support you would expect from a third party, what can a company such as Zerowait provide?

“Zerowait allows us to have spare parts onsite at a very low cost,” says Nagy, “but they also provide much more in-depth phone support than NetApp does, as well as remote or onsite engineering, architecting and education services.”

In a time of tight IT budgets, Zerowait seems to have a good business model. The company grew 45% last year, according to Linett. And Zerowait is expanding worldwide (Europe in 2008 and Australia near the end of last year).

“The typical lease is three years, but these days a lot of people want to extend that to five or six years before they do a refresh,” says Zerowait’s Robinson.

In addition to third-party support services, Zerowait also offers off-lease transferable license systems. More recently, the company began selling its SimplStor system for secondary storage. SimplStor is based on commodity hardware (SuperMicro chassis and drives from Seagate or Hitachi) and open-source operating systems.

NewPush, for example, recently began offering private remotely-managed storage services based on Zerowait’s SimplStor. The service, which starts at $75 per TB per month, is positioned as an alternative to public cloud storage services.