Price per megabyte a misleading metric

Today's business environment continues to be difficult. IT is still a target for cost reduction while still delivering critical services. As a result, IT managers can be easily seduced into thinking that low-price disk equates to lower cost and, therefore, reduced total cost of storage ownership. However, price does not equal cost, and price per MB is the wrong single-metric to use in storage economic decisions. In fact, the purchase price of disk is only a fraction of the total cost of operational ownership.

Purchasing inexpensive disk solutions certainly reduces capital expense (Capex). This often has a negative long-term impact by increasing operating expense (Opex) when other costs are factored in, such as personnel, downtime, environmentals (electricity, air conditioning, floor space, and so on), software licences, and hardware maintenance. IT managers need to become sensitive to Opex and explore new solutions that reduce long-term ownership and operating costs, not just the short-term Capex “savings”.

With a target on Opex, storage ROI and total cost of ownership studies have determined that there is a $1 million net Opex potential for every 8TB of usable disk capacity that can be harvested from an average storage infrastructure. These expenses exist due to storage that has proliferated throughout the enterprise, localised management for dispersed storage and host-based storage architectures.

Activities most likely to reduce storage Opex with proven results and defendable savings in a relatively short period of time are equally clear: consolidating and centralising storage systems, implementing storage networks, common backup, and hierarchical storage management, as well as automating management. Over the medium term, Opex can be further reduced by advanced efforts in storage chargeback, storage resource management, common architectures, and multi-tiered storage. Newer trends in storage utility computing, virtualisation and storage provisioning will continue to provide Opex targets for IT planners.

Although the pressure to reduce Capex is great, the price-per-megabyte approach is clearly short-sighted. When evaluating a storage purchase decision, economic analysis needs to be driven as a joint effort between the finance and IT departments. There are Opex savings to be harvested within the storage infrastructure, and a balanced assessment team provides an unbiased economic analysis that can help separate tangible and intangible savings.

David Merrill is director, SAN solutions, Hitachi Data Systems

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