Adam Smith and the Liberace Effect
One of the holy books of the Mammon-worshipping Church of the MBA is Adam Smith’s Wealth of Nations. One of the things I like about Smith is his intellectual ju-jitsu on the issue of the essential amorality of markets.
Sure, Smith says, the people buying and selling may be greedy shysters with no more social conscience than a fruit fly, but in aggregate, they provide a valuable service to society. Which explains why we have to put up with Donald Trump and Paris Hilton. Smith’s concept: the “invisible hand” of the marketplace, through more-efficient resource allocation and the benefits of comparative advantage, makes society wealthier, which is a Good Thing.
Smith is, in the main, correct. Better investment decisions, more efficient markets and free trade are beneficial, even though some people get whacked pretty hard in the process. Yet “better than the alternatives” is not to be confused with “perfect”. The direct sales model for enterprise storage is a case in point.
So why won’t they sell me cheap storage?
When I was a newly hatched sales rep way back when, I quickly figured out that a customer had to have a $50k budget to make a sales call worth my while. My annual sales quota worked out to $17,000 per day. 10% of my calls turned into sales, so each call had to offer at least $50k to be worth a trip.
Liberace, didn’t he work with Bernoulli?
Liberace was a popular, and very gay, American entertainer. He’d walk out for his Las Vegas shows in some outrageously over-the-top rhinestone studded costume and, as described by David Hickey in his book Air Guitar
. . . do a runway turn, and invite the audience to “Hey, look me over!” Then flinging his arms upward in a fountain gesture, like a demented Polish-Italian diva, he would shoot his hip, wink, and squeal, “I hope ya’ like! You paid for it!”
Which gets us to the cheap storage problem
I hope you like all the salesmen who visit you because, like Liberace’s fans, you’re paying for them. Storage that is too cheap can’t be sold the way most enterprise equipment is sold because the margin dollars won’t support it.
Something’s got to give
Good, cheap storage is out there, but no one can afford to tell you about it or demo it. It is still too complex to just pull out of a box, plug into a wall and a network and just work as a naive customer would hope. So you either have to be smart enough to figure out for yourself, buy large volumes or do without. Most of you choose to do without. Yet perhaps somewhere, maybe in a dorm room at Carnegie-Mellon or Purdue, some bored student is hatching a company that will. Just like Michael Dell 25 years ago.
The StorageMojo.com take
Surprise: I don’t have one. My sense is that there are too many variables and possibilities to just say “this is it.” The outlines are clear, to be sure: cheap storage has to be simple storage so you can buy it with minimal support. It is the “how” of that that is the hard question. Please, smart engineers, figure it out soon!
Comments welcome, as always.
on May 8th, 2007 at 8:29 pm
You don’t want to post the truth, does it hurt that Liberace was straight……