The Storage Economist

My one key message (for the past 12 years) is that cost reduction is not accidental; it takes a determined and structured approach. I have simplified the process to be 3 steps: identify, measure and reduce. Some previous blog entries on these topics are here:

• Think Like an Economist, Talk Like an Accountant, Act Like a Technologist
• TCO Reduction: A Customer Perspective
• So Let’s Do a TCO

Identify

You cannot improve (or reduce) what you cannot measure. So the first step is to identify your costs, and this is much more than the price of the IT assets, or storage. HDS has documented 34 different kinds of costs, so this will help you to characterize your costs. These 34 costs are outlined in the following artifacts for your reference

• White Paper: Four Principles for Reducing Total Cost of Ownership
• Storage Economics for Dummies

Measure

Once you have selected your costs, you can start to compile all the sub-costs associated with your selections. Power is a function of kwatts, BTU multiplied by the local kwatt hour rate. Maintenance costs and depreciation costs can be obtained by your finance departments. Circuit costs and migration costs can all be estimated. If you have been following my blog for the past 6 years (or you can scan the archives now) you will know that we have many data points and white papers on these cost elements. With all the costs summarized, you can divide the costs by the TB (macro level or by tier), by site or by application type. Tracking and measuring unit costs of storage is a simple way to start a dashboard for storage economics. The dummies book (also linked above) has more content that may be of help in the measurement processes.

Reduce

So once you know unit costs, you need to start determine what options you have to achieve these cost reductions. HDS has created a mapping tool that will assist you in correlating costs with specific actions and investments that are shown to reduce costs. The mapping tool is located here for your access and pleasure…

http://www.hds.com/go/cost-efficiency/mapping-tool/

I always suggest a closed-loop approach to storage economics that involves periodic measurements to ensure that your investments and actions really do reduce costs. If you do not measure and report on progress, you may not achieve the results needed. I like this quote from Thomas Monson who said:

“When performance is measured, performance improves. When performance is measured and reported back, the rate of improvement accelerates.”

There you have it, storage econ in a nutshell. This is a simple process that can be adopted in any organization of any size or complexity. Today’s business climate requires cost improvements and cost reductions, and this simple methodology can go a long way to helping you and your organization achieve new levels of optimization.