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Sep 27

Would you pay for the TruCoat?

“I’m saying, that TruCoat, you don’t get it you get oxidation problems it’ll cost you a heck of a lot more than $500…”

For those of you playing along, you probably remember this line from the movie “Fargo”. William H. Macy, playing car salesman Jerry Lundgaard, is arguing with a couple about tacking on an unwanted option called “TruCoat” for $500. It’s one of those things that car dealers use to increase their margins. Watch the video here but be warned, there’s a part at the end that’s NSFW.

Jerry Lundgaard selling the TruCoat

So what’s all this got to do with virtualization and cloud security?

Well, in my talking with customers and cloud service providers, the topic of tiered offerings always comes up. You know, the “Gold, Silver & Bronze”. I’ve asked Cloud Service Providers about including security in those tiers and have been met with “Well, maybe, but it would have to re-coup the investment.” (It IS all about the Benjamin’s, isn’t it?)

That got me thinking about TruCoat. A product that Jerry Lundgaard is selling not because it adds value but because it’s got a GREAT profit margin. Not unlike doing the least amount of “security” (Checkbox Security) and charging the most for it. Not really bringing value but charging like you do. I’m not accusing anyone of doing that, but I wonder if maybe some less than reputable vendors (Joey’s Transmission and Cloud?) would head in that direction?

You see, this goes back to security being bolted on .vs. built in. If, in the Gold tier, you add in network packet monitoring and two-factor authentication, you as the cloud service provider are making a significant investment. You need to get that investment back and start to make a profit. How do you explain the TRUE value of the service you offer? Or, like Joey, you just upsell a little anti-virus and firewalling that you’d do anyways because, at scale, it’s not a big hit on the bottom line? Just like the TruCoat.

Clarification: AV and Firewalls are absolutely part of a good defense in depth story. But they are now, especially with the capabilities of vShield, a “commodity” item that is easy to set up and doesn’t impact the bottom line like other security products would.

Buying Value

Customers will pay money for something of value. I haven’t met many people who buy junk intentionally after all! That said, trying to meld security and value together in a cloud environment will be an interesting journey. Today I think it’s a bit of a chicken and egg. Many customer SAY they want secure clouds but how many are willing to pay for it? Cloud Service providers would like to offer security but, let’s face it, it’s not cheap and, as I said, how many are willing to pay for it?

What are your thoughts? Will customers start to demand things like GRC, packet inspection, two-factor authentication? Or will firewalls and anti-virus “check the box” for them?

For some, the response will be “Ya! You betcha!”