Networking

Paying Attention to Pricing Models

Over the last several days, I’ve gotten pretty worked up over some vendor pricing models. I understand that vendors are attempting to recoup the investment they have in developing their products, but unfortunately the pricing model vendors may choose to adopt can hit you particularly hard. It’s opened my eyes to this particular issue, and I’m going to pay a whole lot more attention to it going forward.

How would we like it if Cisco or HP suddenly decided to adopt a new pricing model for their network switches? What if this new pricing model required that we had to pay more based on the volume of data moving through the switch? This model would be prohibitively expensive for those of us who routinely move big Photoshop files around. It also doesn’t make a lot of sense, because it’s the same switch whether you’re moving around Word documents or Photoshop files. Thankfully, things don’t work that way in the switch world. You purchase the switch you need, and pricing varies depending on the switch’s speed and the number of ports. The pricing model makes sense.

This brings me to a couple of vendors who apply a different model in order to recoup their development costs. For the past several months I’ve been in discussions with Bakbone about their backup products. Bakbone uses a pricing model where you’re asked to pay based on the volume of data you’re backing up. We’ve also purchased network acceleration devices from Expand Networks in the past 12 months. In Expand’s case, the pricing model is based on the amount of bandwidth being accelerated. In both cases, the smaller company which has large storage and bandwidth needs is penalized. The pricing model works a whole lot better if you’re saving and moving Word documents than it does for Photoshop documents.

In the case of backup software, if I’ve already spent the money for the drive space to store my backups, why on earth should I have to pay a software vendor based on how much data I’m backing up? Does the software have to work any harder in order to back up more stuff? In the case of network acceleration, if I’ve already purchased a piece of hardware which is sufficient for my bandwidth needs, why do I have to pay more to accelerate 20MBps than I do to accelerate 10MBps? The hardware hasn’t changed. I’m already paying my ISP for the bandwidth. Isn’t the whole idea of a network acceleration device that I get more bandwidth for the buck? It feels to me like I’m paying for that extra bandwidth either way.

For a company such as ours, where our data and bandwidth needs tend to be excessive, and out of proportion to other companies of our size, these pricing models are prohibitively expensive. A pricing model based on users or connections makes much more sense for us. It’s been a good lesson for me. In the case of Expand we’ve been very happy with the product itself. Their network acceleration appliances work well, and we’ve managed to work out the pricing issues so far. However, this could be an ongoing battle as our company grows, and I don’t particularly relish the thought of revisiting these pricing issues every time we add an office or renew our support contracts.

It’s been a valuable lesson learned for me, and it’s one I’ll pay a lot more attention to in the future. Because our storage and bandwidth needs are out of proportion to our size, basing a pricing model on these elements just doesn’t work for us.

Instant Messaging vs E-Mail

How many of you are currently utilizing Instant Messaging as a legitimate business tool in your organizations? We’re currently planning an implementation of Microsoft’s Unified Communications system, and their IM product – Office Communicator forms the center piece of this offering, providing information about user’s presence. I’m finding that selling Instant Messaging into our organization is not going to be an easy sell, and trying to sell the Microsoft version of it makes it even tougher.

As it turns out, our latest acquisition is an office which was already utilizing Microsoft’s Windows Live Messenger in their day-to-day business. They are thrilled over the fact that we are considering the adoption of a tool they are already using, and they would protest long and hard if we attempted to remove it from their systems. When I asked them why they chose the Microsoft client instead of a more popular product such as AIM, they told me that they actually preferred the fact that the Microsoft client was less widely accepted – and it actually made it easier to sell as a legitimate business tool. This new group of users is actually turning out to be my biggest ally in terms of selling it to my own company. Beyond that argument, it’s fairly easy to make the case in terms of Communicator’s enterprise level capabilities, including integration with Microsoft’s other products and the ability to control and manage it via Group Policy, but those arguments tend to get lost on either users or management.

One of the things I’ve been asked is how is IM different from e-mail, and I actually think that particular question is a very telling one. My users have a great deal of difficulty understanding why they would ever use an Instant Messaging tool for the simple reason that we’re already using e-mail in that fashion. The point they are missing is that we have been misusing e-mail over the past several years, and that e-mail has already become an IM tool in our business. The expectations surrounding e-mail have become so unreasonable that many of our users can and do use it as a chat tool. E-mail conversations routinely happen in real-time, and people actually get upset when an e-mailed question isn’t answered immediately.

I suspect that one of the first steps I need to take in selling the idea of IM to my users is to break them of their bad e-mail habits. If we don’t do that, then they are correct in that they don’t need a separate IM product. The question is how exactly do you break these current e-mail habits? It’s obviously going to take a concerted effort in terms of re-educating our users, and I fully expect that to be a real battle.

Streaming and the NCAA Tournament Coverage

What better day to discuss the issue of streaming audio/video than today? With the NCAA Tournament upon us, and CBS offering up every game at no cost, there will undoubtedly be more than a few of our users who decide to spend the afternoon keeping track of their bracket selections.

We’ve tried blocking this type of traffic in the past, but any such efforts on our part have not lasted long. The reality of our business is such that we need to ability to view or listen to streaming video/audio in order to do our jobs. We have Public Relations and Public Affairs people whose jobs require them to monitor local and national media for breaking stories. We have Creative and Account Service people who routinely use YouTube for viewing the latest commercials created for both our own clients and our competitors. As a result, any efforts to block this traffic have been short-lived.

We’ve tried monitoring tools, using both software and/or hardware to attempt to keep tabs on streaming in order to cut down on the non-productive uses (today’s basketball games would be a great example). The problem with monitoring is that it can get expensive. We’ve got 5 different external pipes we’d have to monitor, so any appliance-based solution would require 5 pieces of hardware to monitor all the access points. Furthermore, it requires somebody to watch things, and none of us really have the time to sit at our desks and monitor real-time streaming. When we have done this sort of thing, generally the only time we check is when we’re hearing complaints about things being slow. Today might be an exception, but at the moment we’ve basically given up.

I’ve always resisted the urge to have IT personnel act as “cops” when it comes to these types of productivity issues. We do have a policy against non-business use which covers this type of thing, but as far as actively monitoring, I’d much rather have my guys spending their time fixing things and finding ways to increase productivity than acting as a high-priced police force. If we can find some ways to monitor things without breaking the bank, great but otherwise we’ve got better things to do. Personally, I feel very strongly that it’s the job of management to keep tabs on their own personnel, and I think it’s a bit of a cop out for folks to expect IT to do that job for them. If an Account Executive is wasting their time watching basketball games or viewing non-work related videos on YouTube, I would expect that to be reflected in their job performance. IT might be called in to verify that type of activity is occurring, and I’m perfectly ok with that. I just don’t believe that we should be the ones bringing productivity issues to the attention of managers. It should work the other way around.

How does your company handle these types of issues? Do you monitor? Are you doing anything special with regards to blocking the NCAA tournament coverage?