Thursday, August 09, 2012

Increase your storage efficiency, or else!


This week I received an email from a customer asking for help. He wrote:

“I’m looking for deep, dense, and cheap. We currently archive to 1TB SATA drives on NetApp with a 4 TB volume size limit.  I have share farms on the back end through the ARX that are 18 TB Volumes.  I can’t keep spending the amounts of money I’m spending today on storage with our growth rate.  So Simplstor looks really good because I don't need to front end it with any server, I can just plug it into my network, add it to the ARX and start moving data to it.”

This client is not alone:
 
According to the Chicago Tribune “Firms are going to be a lot more cautious in terms of how they increase spending’’ said Michael Hanson, a senior U.S. economist at Bank of America in New York. In this environment a simple way for an IT department to increase storage capacity is to use third party service and support and also to acquire off lease certified parts for their infrastructures.

In an uncertain economic environment increasing the life cycle of your trusted IT equipment makes business sense, if you can insure the risk of aging high availability equipment. There is no disruption to your user community due to upgrades and migrations, you can contain your costs and your administrators don’t need expensive and disruptive training since they are already familiar with the environment. And tiering, as our client is doing, allows you to add lower cost archival storage without affecting your clients data access expectations.

For the majority of our customers their organization’s storage growth is a constantly growing cost burden similar to the costs of medical care expenses. The reasons for the cost growth are similar also. The costs of Medical insurance are borne by indirect payment entities (insurance companies or the Government) and the costs of storage are borne by IT departments- which act like an IT insurance company for most organizations.  In both cases the person using the service typically does not pay directly for the service. Thus there are no market costs or perceived value exchanged between the supplier of the service and the user of the resource.  Since the user of Storage is not directly responsible for its acquisition costs, maintenance costs, and ongoing support, the IT department – like a medical insurance company - must find a way to reduce costs to increase efficiency. Unlike the insurance companies, most IT departments cannot raise their budgets (rates) when they can’t reduce their expenses any further. In their case they take the hit instead of the end user. Since the recession started, IT departments have lost personnel and delayed equipment purchases as they reached the limits of efficiency and still had to reduce their budgets.

 Storage and network requirements and associated costs are going to continue to increase until there is a way for IT departments to charge their users with actual cost information for their Infrastructure usage. Without direct feedback on the values and costs of Network and storage resources there will always be a disconnect between the providers of the infrastructure and the users of the IT resources.  The company that figures out how to capture the costs accurately and price them to the end users accurately will certainly be an investment opportunity to look into.

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