Friday, April 2, 2010

Hotel Compellent


Tommy posted a great analogy piece on his blog which explains storage in terms of hotel ownership and occupancy rates versus room cost.  Not to take anything away from Tommy, because it was a good example for non-technical audiences, but I want to point out that analogies like statistics in USA Today, can be used to position your point favorably while making a seemingly fair comparison.
Let me illustrate.  Let’s use the storage-as-hotel example but make some modifications.  Hotel X has an outstanding occupancy rate – or shall we say occupancy capacity but our enterprising new owner quickly finds that he has a problem.  Following the advice of his architects he’s built a high end hotel with luxury rooms outfitted with imported artworks, complimentary services like turn down and pillow chocolates and other fancy features.  Because of this, he finds that his operational expenses (opex) begin to erode the apparent capital expense (capex) efficiencies he thought he’d realized because of the higher capacity.
On top of that, Hotel X has a highly trained and experienced staff waiting to serve the every whim of the guests from bell service, to concierge, to shoe shine, to someone who will hold the door open for you. 
Who wouldn’t love to stay at Hotel X?  I would – sounds like a great place!
But, I can’t afford it.  Nor can many travelers who simply need a place to sleep, shower and maybe make a few phone calls at the end of the business day.  Hotel E might be the perfect place for them.  Clean, comfortable and cheap.  Not too many services available but you can get a free cinnamon bun in the morning and a complimentary cup of coffee.
But consider the proprietors of Hotel C – let’s call them Phil, Larry and John.   They’ve been in the business for many years and they know hotels and more importantly they understand guests.  They know that most guests (say 80%) really just need a place to sleep for a night or two and don’t want to pay a lot for stuff they don’t need.  The other 20% are high end travelers, VIPs or executives who expect the best and demand all sorts of expensive services – and they have the money to pay for it.  So, Phil, Larry and John build a hotel to meet the needs of everyone.
Not only can a guest choose to stay in a room that meets their demands, if those demands should change they can upgrade or downgrade to a more appropriate level of service.
OK, you get the point and I could go on and on with this.  I even thought about talking about Hotel E as an example of vendor lock in (“you can check out any time you like, but you can never leave”).  But the bottom line is this:  Take the time to understand what you’re getting or you’ll go broke staying in places like Hotel X and won’t have money to get back home!

6 comments:

  1. Hey John - love it !!

    I would like to point out that my post didn't mentioned anything about high-end stuff-just 100 rooms and how many of them would you expect, as a owner to rent out. I even gave everyone the benefit of the doubt and said we were all the same price in the Cost Per RAW area. According to your post, that’s not something you took into consideration other then implying that Hotel X was WAY more expensive then hotel C. Let’s just assume X and C are the same price in numbers of raw hotel rooms available for the same $100,000 cost.

    So back to your post, you can have the nicest rooms, with the best staff in the world, but if you can only rent out 60 rooms of your 100 room hotel, you'd probably go out of business pretty soon. Unless you just hired enough staff to manage the 60 rooms available. In which case, the other 40 rooms are locked up and you’re just paying the mortgage and the insurance on those rooms (ie you had to pay for all the beds, flatscreen tv’s fancy alarm clocks but no one will get to use them). Its great but what’s the point of a 100 room hotel?

    Anyway, my point is, there is no free lunch. For all the bells and whistles like Thin Provisioning, DeDuplication, Data progression, Fast Track stuff comes a cost in capacity and software licensing’s. Sure you might save money for Tier 1 capacity, but you make it up in other places.

    By the way – I love your example about upgrading and downgrading rooms as need. That’s assuming the hotel understands how important that person is to the hotel business. Ie) if it’s just based on the last time the person opened and closed the door then you might just accidentally migrate the VP of payroll down to the worst rooms because he only comes out of his room once every 2 weeks to do his job, while the teenager that likes to hang out by the pool listening to his MP3s everyday gets upgrade to the concierge level. And even if you could upgrade the VP at the last minute, that’s assuming you even have room on the concierge level for him !! Remember, it was cheaper to limit the number of rooms on the concierge level and let the cool process work the system !! My assumption would be that the process would have to reserve a few rooms – maybe 10% to 20% to manage that process – those are rooms that are paid for, but not being used and I would assume it would need that same amount of reserved rooms per tier of status (Platinum, Gold, Silver) :)

    At the end of the day, as long as the owner of the hotel full understands that with all these nice features, comes a price, (Spindles, Licensing, Maintenance (Software and hardware) then all things are golden !! They can put everything in a spreadsheet and go to town !!

    Again – nice work, you’ll find even the techies like non-technical conversations sometime :) It’s always fun to come up with different ways, outside of technology, to describe technical thingies :)

    Keep up the great work !! It’s great to see Compellent bloggers mixing it up out here !!

    @StorageTexan

    ReplyDelete
  2. Hey John - love it !!

    I would like to point out that my post didn't mentioned anything about high-end stuff-just 100 rooms and how many of them would you expect, as a owner to rent out. I even gave everyone the benefit of the doubt and said we were all the same price in the Cost Per RAW area. According to your post, that’s not something you took into consideration other then implying that Hotel X was WAY more expensive then hotel C. Let’s just assume X and C are the same price in numbers of raw hotel rooms available for the same $100,000 cost.

    So back to your post, you can have the nicest rooms, with the best staff in the world, but if you can only rent out 60 rooms of your 100 room hotel, you'd probably go out of business pretty soon. Unless you just hired enough staff to manage the 60 rooms available. In which case, the other 40 rooms are locked up and you’re just paying the mortgage and the insurance on those rooms (ie you had to pay for all the beds, flatscreen tv’s fancy alarm clocks but no one will get to use them). Its great but what’s the point of a 100 room hotel?

    Anyway, my point is, there is no free lunch. For all the bells and whistles like Thin Provisioning, DeDuplication, Data progression, Fast Track stuff comes a cost in capacity and software licensing’s. Sure you might save money for Tier 1 capacity, but you make it up in other places.

    By the way – I love your example about upgrading and downgrading rooms as need. That’s assuming the hotel understands how important that person is to the hotel business. Ie) if it’s just based on the last time the person opened and closed the door then you might just accidentally migrate the VP of payroll down to the worst rooms because he only comes out of his room once every 2 weeks to do his job, while the teenager that likes to hang out by the pool listening to his MP3s everyday gets upgrade to the concierge level. And even if you could upgrade the VP at the last minute, that’s assuming you even have room on the concierge level for him !! Remember, it was cheaper to limit the number of rooms on the concierge level and let the cool process work the system !! My assumption would be that the process would have to reserve a few rooms – maybe 10% to 20% to manage that process – those are rooms that are paid for, but not being used and I would assume it would need that same amount of reserved rooms per tier of status (Platinum, Gold, Silver) :)

    At the end of the day, as long as the owner of the hotel full understands that with all these nice features, comes a price, (Spindles, Licensing, Maintenance (Software and hardware) then all things are golden !! They can put everything in a spreadsheet and go to town !!

    Again – nice work, you’ll find even the techies like non-technical conversations sometime :) It’s always fun to come up with different ways, outside of technology, to describe technical thingies :)

    Keep up the great work !! It’s great to see Compellent bloggers mixing it up out here !!

    @StorageTexan

    ReplyDelete
  3. Hey John - love it !!

    I would like to point out that my post didn't mentioned anything about high-end stuff-just 100 rooms and how many of them would you expect, as a owner to rent out. I even gave everyone the benefit of the doubt and said we were all the same price in the Cost Per RAW area. According to your post, that’s not something you took into consideration other then implying that Hotel X was WAY more expensive then hotel C. Let’s just assume X and C are the same price in numbers of raw hotel rooms available for the same $100,000 cost.

    So back to your post, you can have the nicest rooms, with the best staff in the world, but if you can only rent out 60 rooms of your 100 room hotel, you'd probably go out of business pretty soon. Unless you just hired enough staff to manage the 60 rooms available. In which case, the other 40 rooms are locked up and you’re just paying the mortgage and the insurance on those rooms (ie you had to pay for all the beds, flatscreen tv’s fancy alarm clocks but no one will get to use them). Its great but what’s the point of a 100 room hotel?

    Anyway, my point is, there is no free lunch. For all the bells and whistles like Thin Provisioning, DeDuplication, Data progression, Fast Track stuff comes a cost in capacity and software licensing’s. Sure you might save money for Tier 1 capacity, but you make it up in other places.
    By the way – I love your example about upgrading and downgrading rooms as need. That’s assuming the hotel understands how important that person is to the hotel business. Ie) if it’s just based on the last time the person opened and closed the door then you might just accidentally migrate the VP of payroll down to the worst rooms because he only comes out of his room once every 2 weeks to do his job, while the teenager that likes to hang out by the pool listening to his MP3s everyday gets upgrade to the concierge level. And even if you could upgrade the VP at the last minute, that’s assuming you even have room on the concierge level for him !! Remember, it was cheaper to limit the number of rooms on the concierge level and let the cool process work the system !! My assumption would be that the process would have to reserve a few rooms – maybe 10% to 20% to manage that process – those are rooms that are paid for, but not being used and I would assume it would need that same amount of reserved rooms per tier of status (Platinum, Gold, Silver) :)

    At the end of the day, as long as the owner of the hotel full understands that with all these nice features, comes a price, (Spindles, Licensing, Maintenance (Software and hardware) then all things are golden !! They can put everything in a spreadsheet and go to town !!

    Again – nice work, you’ll find even the techies like non-technical conversations sometime :) It’s always fun to come up with different ways, outside of technology, to describe technical thingies :)

    Keep up the great work !! It’s great to see Compellent bloggers mixing it up out here !!

    @StorageTexan

    ReplyDelete
  4. Hey John - love it !!

    I would like to point out that my post didn't mentioned anything about high-end stuff-just 100 rooms and how many of them would you expect, as a owner to rent out. I even gave everyone the benefit of the doubt and said we were all the same price in the Cost Per RAW area. According to your post, that’s not something you took into consideration other then implying that Hotel X was WAY more expensive then hotel C. Let’s just assume X and C are the same price in numbers of raw hotel rooms available for the same $100,000 cost.

    So back to your post, you can have the nicest rooms, with the best staff in the world, but if you can only rent out 60 rooms of your 100 room hotel, you'd probably go out of business pretty soon. Unless you just hired enough staff to manage the 60 rooms available. In which case, the other 40 rooms are locked up and you’re just paying the mortgage and the insurance on those rooms (ie you had to pay for all the beds, flatscreen tv’s fancy alarm clocks but no one will get to use them). Its great but what’s the point of a 100 room hotel?

    Anyway, my point is, there is no free lunch. For all the bells and whistles like Thin Provisioning, DeDuplication, Data progression, Fast Track stuff comes a cost in capacity and software licensing’s. Sure you might save money for Tier 1 capacity, but you make it up in other places.

    By the way – I love your example about upgrading and downgrading rooms as need. That’s assuming the hotel understands how important that person is to the hotel business. Ie) if it’s just based on the last time the person opened and closed the door then you might just accidentally migrate the VP of payroll down to the worst rooms because he only comes out of his room once every 2 weeks to do his job, while the teenager that likes to hang out by the pool listening to his MP3s everyday gets upgrade to the concierge level. And even if you could upgrade the VP at the last minute, that’s assuming you even have room on the concierge level for him !! Remember, it was cheaper to limit the number of rooms on the concierge level and let the cool process work the system !! My assumption would be that the process would have to reserve a few rooms – maybe 10% to 20% to manage that process – those are rooms that are paid for, but not being used and I would assume it would need that same amount of reserved rooms per tier of status (Platinum, Gold, Silver) :)

    At the end of the day, as long as the owner of the hotel full understands that with all these nice features, comes a price, (Spindles, Licensing, Maintenance (Software and hardware) then all things are golden !! They can put everything in a spreadsheet and go to town !!

    Again – nice work, you’ll find even the techies like non-technical conversations sometime :) It’s always fun to come up with different ways, outside of technology, to describe technical thingies :)

    Keep up the great work !! It’s great to see Compellent bloggers mixing it up out here !!

    @StorageTexan

    ReplyDelete
  5. StorageTexan you win the award for being my first reader to post a comment. Send me your mailing address!

    ReplyDelete
  6. hmm i'm thinking crawfish, beer and cigars at your place !!!

    ReplyDelete