Dell EMC Storage Boosts List Pricing

Updated: 3 days ago

Unlike vendors in other hardware categories, the leading storage suppliers did not hike prices until the tail-end of 2021, when NetApp imposed 10% list pricing uplifts, and more recently, Dell EMC raised prices on key products. Dell EMC hinted at list pricing uplifts in February, and we are now seeing their impact on buyers. We have yet to see Pure Storage increase pricing.


Here’s a look at the increases observed on Dell EMC products:

Product Family

Observed Increase Range

PowerMax

Up to 10%

Data Domain Controllers

5% - 10%

PowerScale (Isilon)

Up to 10%

Dell EMC claims most of the hikes are due to the increased cost of hardware components, but support pricing will also be affected by these increases. Its support is priced as a fixed percentage of hardware costs (ranging from 10-15%) and Dell EMC is keeping these percentages unchanged, thus increasing support pricing at the same rate as hardware. Because the vendor’s messaging focuses on the high cost of hardware components, buyers might be able to push for some cost relief on support.


Following is an illustration of how support costs can be affected by the recent hardware price hikes:

In short, if you purchase PowerMax capacity, plus an engine, and mission critical support, any increase on the two hardware products would directly affect the cost of the mission critical support. In this scenario, the mission critical support is priced at 10% of the total storage fees per year (the example has pre-paid maintenance for five years, common in storage deals). Since storage hardware fees increased from $7.23M to $7.9M, taking the same percentage of the higher cost total yields an increase of $332,500 on mission critical support. Because these increases compound due to the fixed percentage pricing metric, total cost of this solution increases by roughly $1M.


We have seen multiple deals where Dell EMC sales reps mentioned an additional 5-8% increase upcoming in May. Sales reps are using this upcoming increase to force clients to buy hardware earlier than needed. Given the uncertainty of inflation going forward, it is recommended that buyers develop strategic approaches to upcoming major storage spends to ensure leverage is available for negotiations.


For more information about storage trends and buying options, download our recent blogs including Storage TCO Analysis, Storage Subscriptions: New Models to Buy Storage, and The Emergence of Storage-as-a-Service, or contact your Accenture representative.


- Scott Braverman is a Advisory Specialist at Accenture.