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The Storage Economist

Calculating the Total Cost of your Data Protection

In my last blog post, I introduced a 4-part blog series on the economics or costs of data protection. My colleagues Ros and Claus also are writing a parallel set of blogs on the technology behind data protection. My boss Hu Yoshida also posted compelling points in a blog from 2 months ago, and an experience where only 12% of a customer’s data storage was 1st instance data.

As fate would have it, IDC published a recent report from Laura DuBois, Richard L. Villars, Brad Nisbet entitled “The Copy Data Problem: An Order of Magnitude Analysis.” It is an excellent read, with high points being:

  • IDC estimates that in 2012, more than 60% of enterprise disk storage systems (DSS) capacity may have been made of copy data
  • Similarly, in 2012, copy data made up nearly 85% of hardware purchases and 65% of storage infrastructure software revenue
  • IDC projects that data protection infrastructure will cost businesses $44 Billion in 2013
  • They go on to say that the growth of data is bordering on paranoia

So with this as a backdrop, let’s walk through a process to actually calculate the costs of data protection. First, we have to determine what cost elements we should use in a TCO analysis. Luckily HDS has a robust methodology called Storage Economics that provides 34 different cost areas to use in this approach. See these papers and books for more on the 34 costs.

Next, we need to isolate the costs and align them to the different data protection techniques outlined in my first blog. These costs tend to be hard costs, or direct costs. You can add soft costs as well, but for this exercise hard cost calculations will be more impactful to management for them to see what this insurance is really costing. We will handle the risk costs in another part of this data protection blog series, as these risks need to be quantified and dollarized as part of the annualized loss expectancy.

Here is a simple correlation to some of the costs on the far left side, and how these costs may exist in the several data protection methods.

With this framework you are now able to do this math on your own, to calculate techniques unit costs and total costs of data protection. HDS has tools and services to help you if you want to do this a little faster and with people who do this several times a month instead of once in a career.

I also recommend not only measuring data protection cost per usable TB, but also dividing these costs by the 1st instance capacity that you are protecting or in other words, the total cost of data ownership (TCDO). This gives a better metric going forward with improvement and cost reduction plans. With this framework in place, you are now able to start calculating the total cost of your data protection strategy.

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Comments (2 )

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Todd Sanders on 12 Apr 2013 at 7:38 am

Very good points. I think HP has put together a document that addresses some of the things you are talking about in a very detailed format – http://www.hpl.hp.com/techreports/2005/HPL-2005-107R1.pdf

If you have more content, I would really be interested in knowing more.


David Merrill on 30 Apr 2013 at 2:47 pm

Thanks for sending me this paper – it’s a good paper on the physical attributes and characterizations of the physical data center costs. But it does not address the various costs that contribute to data protection. Certainly power, cooling, labor, and floor space are components of this cost (as outlined in the paper) but we also have to quantify outage risk, recovery time, recovery time risk etc. That said, it’s a very good overview of how the mechanics of costing out the physical center can be derived. Thanks again.

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David Merrill - The Storage Economist

David Merrill
Chief Economist

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