The Storage Economist

Here in the US, we are almost ready to celebrate the NBA (basketball) championship. Even though my 2011 World-Champion Mavericks are not in contention again, this annual playoff series is still exciting to watch.  Between several customer and sales team meetings this week, and watching some of the games in the evening, I have heard common phrases – mainly that of a baseline. In basketball, it is the end-line, and stepping on the line causes a turn-over. There is not much correlation of basketball baselines to TCO baselines, so I won’t take any time trying to draw correlations.

TCO baselines are one of the first things that we do as we engage with customers who want to reduce their costs (storage, VM, servers, etc.). I always tell people that we cannot improve what we cannot (or do not) measure. Our economic methods include some 34 different costs, so once these costs have been isolated, then we can measure and report on the baseline costs. With storage we typically look at TCO/TB/Year. With converged solutions we tend to track TCO per VM/@100GB, or some such metric. We have also done $/IO and unit cost of a transaction, or map reduce. I have some old blogs on this topic that go into much more detail.

TCO Reduction: A Customer Perspective

So Let’s Do A TCO

Identify, Measure, Reduce

Measure Twice, Cut Once

Baselines are just the start of the process though. Once the baseline is done, we can start to review the results to determine what investments and actions can be taken to actually reduce the costs. Annual cost measurements can be repeated to measure progress and adjust the strategies. But the primary action of the baselines and subsequent measurement is to provide feedback that improvements are being made. The baseline is not the end-goal, but the measurement system.

One important step after the baseline is to map or lay out a plan to provide the necessary improvements. HDS and the storage econ methods have developed a tool that can help you correlate your cost interests to investments and strategies that are proven to reduce your costs. If you have not seen this tool, you need to take a look at it, it only takes a few minutes to click off the cost areas that are important to your organization, and then to see what steps can be taken to reduce these costs. The tool can be accessed here.

Just as in basketball, the baseline is an important starting point for the start of a new offensive drive. But it is just the starting point. A specific plan and roadmap are necessary to provide real savings, predictable savings over a longer period of time. Use a TCO baseline to get the momentum to start, but periodically measure yourself again, adjust the roadmap, and make tactical and strategic investments that are proven to reduce IT costs.