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Top Ten IT Trends for 2013–Trend 2

by Hu Yoshida on Dec 7, 2012

The current consumption model for storage creates a lot of wasted storage capacity which customers pay for but may never use. In the past when storage hardware costs were low compared to the operational cost of storage, it might have made sense to spend more on storage capacity if it lowered your operational costs. However, today with storage demand increasing and the price erosion for storage slowing down, it makes sense to revisit the CAPEX versus OPEX trade-offs in consuming storage.

In the beginning of a new product cycle, IT customers purchase all the capacity they think they might need for the next 4 or 5 years at today’s best price. Although much of the new capacity that was paid for would not be used, it was there just in case more storage was needed before the next technology refresh cycle. It was more cost effective to buy storage up front because installing, formatting, creating RAID groups, and carving out LUNS with each acquisition increased operational costs. Also increments that were bought two to three years into the product cycle would lose their asset value on the next product refresh cycle, and the administrative time that is necessary to go through a procurement process for each increment was not practical. Migration to the next generation storage was costly because both old and new storage has to be available during the migration of data, which can take six months or more, and by the time one migration was completed it was almost time to start the next migration. In the chart above, the shaded area above the storage utilization curve is capacity that is not used and the overlap of the shaded areas indicates the overlap for storage migration.

Hitachi believes that it is time to change this consumption model. Instead of buying all the storage you will need for the next 4 or 5 years at today’s price, you can buy what you need when you need it. In order to do this you need some basic technologies; the ability to dynamically provision storage when you need it, the ability to non-disruptively migrate data from old storage to new, and the ability to virtualize and sweat your asset while moving to the latest technology. These technologies are available today from Hitachi Data Systems.  You will also need some financial tools, because someone still needs to carry the capital cost. Cloud services such as infrastructure as a service (IaaS), facility outsourcing and managed services are enabling a transition to more efficient, on-demand consumption models that reduce TCO and convert CAPEX to OPEX.

Gartner agrees with this trend and has projected that 25% of customer infrastructure purchases will be based on a per-unit charge by 2013.

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