A bit of passion spilled over into a rather bland conversation (this is a true story) among a group of IT procurement people and their technical consultant recently.  Imagine the scene: the consultant was on a teleconference line while the client team gathered around a speaker phone.  The not-so-exciting topic was about a benchmarking firm’s recently published market prices for a common infrastructure component – SAN storage.  The consultant, who could not contain himself, declared that the benchmark was in gross error – as his experience indicated that market prices were exponentially less than those published.    The IT procurement team – probably among the most logical and pragmatic people in business – felt comfortable with the benchmarking results.  Their comfort was achieved due to the extensive documentation of parameters – about 40 in total – that clarified what was included in the price benchmark.  These parameters included: disaster recovery capability, service level agreements, additional auxiliary services and others.  The client team asked that the consultant compare his parameters – that is, working assumptions on quality and scope - with the benchmark to help validate the prices.  That comparison was not happening.  The increasingly belligerent consultant touted example after example reflecting a lower unit cost.  Finally, the client manager abruptly hung up the phone in frustration, much to the consultant’s chagrin.

I don’t think the consultant was making up his facts.  And belligerence aside, he was making a critical point regarding the low prices available in the market.  But what did those prices offer in terms of service scope and quality?  I would like to suggest that a simple comparison of the facts and assumptions between competing offerings are needed to validate services offered against client requirements – and then look at price.  That said, what are others (like you) seeing in the market place today?  Do ‘exponentially lower’ unit prices for infrastructure components exist on a pay-as-you-go basis?  What does the client sacrifice, if anything, of for the lower price?