The Storage Economist

Are storage budgets/spending on the rise? Six months ago Gartner said no. This month CIO magazine says yes. This can often be confusing; perhaps as an industry there is no good way to predict macro storage buying trends. Regardless of the predictions, there will always be interest in your own storage budget, and maximizing return on assets.

Summer seems to be budget time for IT, either it is mid-year budget review –and the opportunity to give back some money that was just allocated. Maybe you are beginning to set next year’s budget, with tighter controls and the uncertainty of purchasing plans. On the first topic, when it comes to looking for places to find easy budget money (no such thing) to be removed from IT, storage can be one area to target. This leads to some questions that we ask, or that is asked of us:

• Is there money in the storage infrastructure to find, cut or avoid?
• How much storage-budget money potentially is in there… and is it worth my time to go after it?
• What kind of money is it?
• How can I prove the money or characterize it?
• What do I have to do to reclaim this storage OPEX money?

Enter the 12:1 rule. Over the past 7 years, I have been studying patterns and trends in storage economics; that is finding ways to reduce storage costs, discovering hidden piles of money within the storage infrastructure. As an HDS consultant, being part of (or access to) over 400 storage economic assessments, we have found an interesting pattern.

On average, for every 12TB of installed and usable disk capacity, there is the potential to find/avoid/recover $1M of net OPEX savings.

This $1M-per-12TB rule is an interesting place to determine if looking for budget money within the storage infrastructure is fertile or futile. It also can help drive initiatives, investments and strategic directions to significantly lower the cost of storage ownership (TCSO) and total cost of data ownership (TCDO).  By the way, this ratio has nothing to do directly with total cost of purchase. It has everything to do with operational costs and recurring costs related to the storage infrastructure.

This 12:1 ration has been an interesting discovery and discussion point. I started writing about this 4 years ago, and the ratio has held true in these past 4 years. Now your mileage may vary, depending on several factors, and the OPEX savings comes over 3 years. You can read more about this metric, in the paper referenced above.  This is not necessarily easy money. It may take investments to reclaim or avoid these OPEX costs. You may have to invest in:

• New storage architectures (hardware and software)
• Establish storage architectures, to set a manageable set of storage behaviors
• Invest in the storage management staff, skill sets and then optimize the organization
• Invest in storage-specific operating practices and processes that are best-in-class
• Consider new methods to deploy and provision data storage resources
• Quantify and ‘dollarize’ costs of risk, non-compliance and opportunity costs resulting from (or draining from) your storage infrastructure.

I will spend time in my next BLOG installment on some of the activities and investments that we have seen IT departments do to reduce storage OPEX costs. In the mean-time, do the divide-by-12 for your own infrastructure, determine if the number is large enough to get the right level of attention. As always, send me your comments.