Jumping into a discussion on Storage Economics is easy. We all want to talk about money. Getting it. Spending it. Saving it. Money (or finances) economics are part of our natural human nature, and the IT nature. Problem is, we often count the wrong types of money or look at money in too narrow of a focus.

I started dabbling in the economics of storage with a white paper on SAN ROI in the late 1990’s. At that time, justifying a SAN was technically acceptable, but the entry cost was often prohibitive (back when switches and directors were hundreds of thousands of dollars). Using economic principles to justify technology investments was a new dimension for me within a mostly-technical (Hitachi) company. The paper on SAN ROI was well received, and seemed to get me on the current path of various storage infrastructure & economic themes.

Some of my early influences on this topic came from an old light-blue book titled ‘Information Economics’ by Marilyn Parker and Robert Benson (Prentice Hall, 1988).

Some of my MBA books from the mid-80’s had to be dusted off as I combined topics around price elasticity to storage demand, IRR, NPV and predictive ROI. The IT slowdown of 2001-2004 provided some fertile ground to develop various proofs and persuasions to get IT people to ask for, and financially justify, computer spending during a time when IT capital spending dropped way off. Irrespective of the economic climate or country in which we may live, business principles of money and finance have to be included with technology strategies. I might need to define the meaning of Storage Economics:

• Understanding the relationship of purchase PRICE and ownership COSTS of storage
• Long-standing principles around the truth that price ≠ cost
• Characterizations of what types of ‘things’ make up the costs of storage ( I have found 30 things so far)
• What types of activities or investments companies make to reduce operating expenses (OPEX) - related to storage
• Various comparative methods, using money, to assist in judgments that are made in storage plans

Storage Economics spans all topologies, vendors, architectures, mediums and countries. I find that many sales processes, from the client RFI/RFP to working with vendors was centered around price-per-MB. Being seduced into low price at the risk of higher long-term costs is a trap that we often get caught in. I often found that lower-priced solutions do not perform or produce the desired long-term business benefit, when you consider that business is centered around money.

My interest and passion is to connect the international language of business (that is money) to storage: storage architectures, storage strategies, topologies, decisions of every type around storage. People who learn the language of money, properly married to technology, gain an added measure of leverage in getting things done. And at the end of the day, that is what we all want to do, get things done.

I hope my ideas, suggestions and dialog through this format can help those who want to become economic heroes within their respective ‘spheres of influence’ . I find that economic heroes have a more interesting career within IT, than perhaps technology-alone heroes. Economic heroes are those people that learn the language of money and then connect these concepts with technology. These heroes can be influential and powerful in their own right in getting things done, and getting credit for the money.

Comments RSS