Product Name: Network Subscription
In the box: Covers all Brocade networking products except for Fibre Channel SAN products./> The Nut: Network Subscription is an acquisition model that lets companies pay for network ports when they are used. As monthly demand changes, the port count and costs rise and fall. This is a good model for companies with large differences between normal and peak usage, though subscribers pay more over time compared with a capital purchase. It is not a fit for companies with small variations in demand. Network Subscription doesn't include Fibre Channel ports.
Organizations typically buy more port capacity than they need, but as demand grows, that capacity gets used up, requiring a new purchase. The purchase cycle also forces companies to assume all the risk and cost of acquiring new equipment, which poses significant up-front expenses for new projects and companies.
- This ebb and flow of capacity causes wasted capital cost during the periods of excess capacity and performance degradation during peak demand.
- Increasing capacity is time consuming because products have to be acquired and provisioned.
- Increasing capacity carries financial risks because you carry the debt load if your demand falls.
Brocade's Network Subscription lets organizations add and remove capacity on demand and pay via the utility model.
- You can match capacity to demand as the demand occurs.
- You are not locked into a long term lease or capital investment.
- Unlike leasing, you can remove capacity as needed.
- You incur the IT expense as the revenue occurs.
Brocade claims that over the lifecycle of a data center, IT adds capacity such as ports, servers and storage, in increments, to keep pace with increasing demand. Prudent IT managers buy more capacity than is needed to accommodate future growth, but eventually demand will exceed capacity.. This results in some years with substantially higher spend on infrastructure than other years, impacting project P/L sheets. The organization also assumes all the risk in the event that growth doesn't meet expectations--the cost of the equipment is already sunk.
Network Subscription is a service offering that lets companies pay for ports as needed, whether demand increases or decreases. This is a similar idea to using cloud computing to handle excess computing demand by "owning the base and renting the spike," as Jens Lapinski said in a comment over at GigaOm. In the case of Network Subscription, the customer doesn't own anything, but you do have to acquire base ports that will make up your steady state monthly charge and pay more for the spikes.