The Storage Economist

My 23 yr old son called last week, and his long-awaited planetary alignment had occurred. We had a 10 yr old truck, which was eligible to trade in for US$4500 towards a new, fuel efficient car. I like it when my government will help me buy a car. Anyway, this old truck with the old mileage qualified for a new US CARS program, and we were one of the first to do this deal at the local Nissan dealership. We were so new that the system actually worked well for us early last week.

My old truck is a 1999 Ford F-150. It is a ‘state law’ to own a truck in Texas. Luckily I still drive a 2006 F150 so after this trade-in I can keep my Texas citizenship. The old truck still ran well, had good A/C and decent gas mileage. Insurance was low and it was paid off 7 years ago. The operating costs were low (relatively) and I did not feel compelled to make a CAPEX investment until it completely broke-down. To me it was a great car for a 23-yr old son to drive to work.

Now the long-term economics for him and me seemed to become aligned when a government program gave me cash towards the price of a new Nissan. I was surprised to learn that insurance was the same on the new vehicle, and with a 3-year warranty my son will enjoy some trouble-free driving for the next few years. The new fuel economy will save him ½ the cost of fuel for his driving. Happy day for him.

I have thought a lot about the economics of my car situation, and the motivation that I needed to make this trade. We had been talking about a trade for many months, but with a perfectly good and working car, it was hard to make the new capital investment. The operating costs of the old car were reasonable. No long trips were required. This was simply a tier 3 automobile. But there was a tipping point, and the government helped us make that change.

Now let’s shift gears to storage. I met another large customer in Asia 2 weeks ago that had a moderately sized storage infrastructure, with old and new storage arrays virtualized behind a USPV in production, and SVC for the dev/test environment. They were strong believers and users of storage virtualization. They were using storage arrays long past the depreciation life. They were paying 3rd party maintenance, T&M on some arrays, and on the lower tiers they just had spare array groups in the case of failure. The cost/performance ratios were perfect for the lower tiers of storage. The CFO and CIO loved the fact that they were able to sweat the assets. When asked what or when they would be motivated to eventually replace the oldest arrays that were virtualized, they answered:
1.    When the failure rate was high enough to make a change
2.    The array, microcode was EOL
3.    The power and cooling costs on a per-TB basis exceeded a pre-defined limit

Now there were some old arrays, with 36 and 73GB drives. They must have met the criteria since they were in the virtual pool. These solution were meeting important (but not critical) business needs since they had a loosely defined catalog of services and these disk pools were operating within OLA and SLA limits of the virtual capabilities of these older arrays.

I am sad to say that there are not government “Cash for Clunker Storage Array” programs that I am aware of. There are some interesting options with different free offers that can be compelling, depending on your situation. So your tipping point has to be defined by:
•    CAPEX pressures or limitations
•    Growth rates
•    Definitions that come from a defined process (catalog) with SLA and OLA parameters that keep you protected when using these technical extensions
•    Metrics and management triggers that tell you when old enough is old enough

When it comes to old trucks, I do not give my government enough economic credit; especially when they help me buy an upgrade. In the business and IT world, we need to watch for, and define our own planetary alignment. We need to create economic metrics and measurements to extend and wear-out, as well as upgrade and refresh when appropriate.