Storage Economics: Increase the Return on Your Assets

Even in a favorable economic climate, businesses are always looking for ways to do more with less. And in a bad economic climate like the current one, organizations need to find better ways to intelligently use their existing assets not just as a matter of general principle or as a theoretical exercise, but as a matter of necessity.

The amount of data business generates—even in tough times—keeps growing. But with hiring and spending freezes more the norm than the exception, organizations do not have the personnel or the budget to simply keep adding capacity in order to keep pace with growing storage requirements.

The discipline of storage economics enables businesses to resolve this tension between the need for more capacity and the constraints of budget by applying basic economic and financial principles to the area of storage management. By considering the total cost of ownership of a system—not just the price per megabyte of storage—storage economics allows you to systematically analyze, quantify and ultimately reduce storage costs.

In order to reduce costs in the short term, we recommend strategies such as virtualization, to reduce the cost and time for end of life system and data migration, disk reclamation to free up higher tiered storage space while reclaiming stranded capacity, dynamically tiering storage to re-balance storage allocations, free up high tiered capacity, lower license costs and fees, and shift the cost of copies by moving to a low tier disk; and, for some, migrating to disk-based backup to reduce costs related to tape, retrieval and short term access.

Longer term, strategic initiatives such as Storage Service catalogs, consolidation, SAN expansion, process improvements, and team consolidation can all help reduce costs.

Using storage economics to more accurately assess and ultimately reduce the total cost of ownership accomplishes several other goals as well. By separating out individualized costs, it allows businesses to more easily compare the relative benefits of different architectures and different vendors. In short, it allows for the kinds of impartial comparisons and rigorous planning that will be required to survive some very challenging economic conditions in the days ahead.

Hitachi Data Systems began actively researching, studying and consulting on storage economics in 2001. As such, we possess nearly a decade of experience in tackling precisely the kinds of questions that have recently become so pressing. How can an organization discover and reduce the total cost of storage? What impact does each of the many components of storage ownership have on its total cost and which elements can be most effectively leveraged to reduce it? Ultimately, what's the most practical, efficient and elegant storage solution for the best value?

The Basics of Storage Economics

One of the first principals of storage economics is that price does not equal cost. In other words, the initial cost of acquisition constitutes just a fraction of the total cost of ownership. Our studies suggest that disk price makes up just 25 percent of the cost of owning the disk over three to four years.

Hitachi Data Systems has characterized 33 different types of storage operating costs. By working with customers to determine which types of cost reduction they are interested in, we can suggest strategies for storage consolidation, tiered storage, disaster protection, backup improvements and management automation, etc., that map directly to the 33 types of costs that will create reductions in operating expenses.

How the University of Utah Reduced Storage Costs by 40% in One Year

The University of Utah Health Sciences Center (UUHSC) Information Technology Services (ITS) group provides technical resources and support for a wide range of departmental, hospital, research group, and clinic-based facilities in Salt Lake City, Utah. With demand for storage capacity doubling every year and more UUHSC departments signing up to share resources managed by the ITS group, the existing storage infrastructure was beginning to show signs of strain. By implementing a new tiered storage architecture built around the Universal Storage Platform, UUHSC was able to create a single point of management for the many disparate storage area networks that fell under its purview. Even better, they were able to reduce the number of personnel needed to manage storage by two; improve capacity use; remove three storage frames, saving US$228K in hardware, software, maintenance and utilities; improve availability, causing an estimated US$256K in risk avoidance; improve performance, to the tune of US$340K in savings; and, improve access to tiered storage for all its customers. To find out more about how Hitachi Data Systems used storage economics to help the University of Utah save hundreds of thousands of dollars in storage costs, click here.

Tiered Storage Helps Reduce and Isolate Operating Costs

Many organizations still function on a single tiered storage structure, with all data stored in a single pool and purchased at a single rate. A multitiered storage architecture can reduce current operating and capital expenses through a number of means. First, IT planners can accommodate growth only in those tiers that require it rather than across the whole storage infrastructure. Second, equipment investments may be reduced because organizations can extend the useful life of some storage assets by demoting them to lower tiers within the storage pool as they age. The cost of waste diminishes, as does the cost of management. To learn more about the many ways in which better aligning storage assets to their business use can help reduce operating costs, read a white paper on tiered storage economics by clicking here.

Read the article in Certification Magazine

 Summary Paper:
33 Types of Costs that Constitute Storage TCO More...

 White Paper:
Hitachi's Approaches for an Increasingly Cost-Conscious Data Storage World

 Webtech Presentation:
Storage Economics
A recorded presentation by David Merrill, Hitachi Data Systems Chief Economist and Global Business Consultant More...

 Case Study:
Tiered Storage and Virtualization in the Real World

 In the Blogs:
Top 4 things to really impact costs in 2009 — Parts 1 and Part 2
By David Merrill, Chief Economist and Global Business Consultant, Hitachi Data Systems

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