Storage Corner : Return on Storage Investments

Aligning IT with business goals is a key requirement for an agile IT
infrastructure, and this is a challenging task for many CIOs. An IT backbone is
an ecosystem of hardware, software and apps. Two things that top the list of
CIOs challenges arecreating a computing power that can run demanding apps and
storing the data that is created. If we look at the key components of an IT
infrastructure, storage is the vital element that secures enterprise data. Data
in all formsfiles, images, appsare exploding, and hence even during the
recession, investments on storage become a necessity.

An IDC report Expanding Digital Universe says that the information growth
through 2010 will grow at a CAGR of 57%. And Asia Pacific, excluding Japan, will
grow 30-40% faster. What this growth denotes is that it is equivalent to
approximately 3 mn times the information in all the books ever written. As per
the report, organizations, including businesses of all sizes, agencies,
governments, and associations will be responsible for security, privacy,
reliability, and compliance of at least 85% of the information. What makes the
situation more complex and somewhat uncontrollable is the nature of the digital
information that is generated. Over 95% of the digital information consists of
unstructured data. Hence, managing storage and giving a structure to
unstructured data will be the key growth driver.

Storage RoI?

TCO and RoI are closely interlinked, and it has become the essential vocabulary
in vendors solution offerings and in most cases it acts as their USP. But if we
look at the CIO community, the term RoI evokes mixed responsesome are totally
confident about the tangible benefits, and others a bit cautious on providing
benchmarks on the savings in relation to the quantum of spend that went into IT
purchases. If we contrast this to a storage deployment, due to its macroscopic
nature, more CIOs are looking at ways in arriving at a storage architecture that
gives them optimal results and cost savings.

Effective storage architecture hence needs to factor in a lot of best
practices so that economics can be achieved. Storage economics is all about
creating a fine balance between storage spends and actual requirements so that
one arrive at a greater RoI due to the optimal use of assets. Experts aver that
there are proven strategic and tactical investments for storage infrastructure
cost reduction. These range from technology components to organization and
staffing changes, and even include methods of provisioning storage capacity to
end users. As new technologies become available, smart organizations will follow
the principles of storage economics to evaluate them not just for their
technical prowess, but also for how well they can support business performance
and particularly efforts to economize.

Road to Storage Economics

At a macro level, to arrive at better storage economics one sure way is to
adopt a service oriented approach. This approach will enable enterprises to
achieve greater storage manageability and cost savings in terms of capacity
planning, administration, and a whole lot of storage related jobs. Why is
storage economics important? Experts say that it is important because it
attempts to align operational and technical dimension of the storage
infrastructure to a corresponding financial viewpoint. As storage prices drop
from 15% to 30% every year, it is easy to develop the erroneous belief that a
lower cost of acquisition will result in a lower cost of ownership. Storage
economics methods and practices provide measurable techniques that can expose
the true costs of storage decisions and help IT leaders make plans to
systematically reduce these costs over time.

Experts say that the road to better storage economics can be achieved by
taking a comprehensive view of the existing setup. To start with the first
principle is to be aware that the cost of storage includes more than price. One
report by a leading storage vendor identified that there are thrity-three types
of costs that compose TCO. Of these, not all are equal in relevance to an
organization and some are more strategically important to bear, reduce, or
eliminate than others.

The second principle, therefore, is that an organization must determine which
are the relevant costscosts on what to focus, to measure, and to control. The
third principle is that there are economically superior storage architectures.
Too frequently, organizations fail to recognize that business performance and
the ability to reduce costs over time are features of any technology. Some
technologies have a well documented edge over others in controlling and lowering
TCO. Over time, new and better technologies will be introduced and the specific
technologies that build economically superior storage architecture will change,
but the principle will remain constant.

Hence, organizations must evaluate new technologies for what they can
contribute to business performance and, specifically, to cost reducing
performance as well as considering their technical functionality. The fourth and
final principle of storage economics is that organizations should use money as
one measurement for storage improvement. Once an organization has identified
which costs are most strategic to control, it must develop an economic measuring
system to quantify current costs and track progress in reducing them.

Clearly, an informed approach based on the existing pain points and investing
in areas that will lead to better TCO management and RoI is the right choice.
This approach also creates a cohesive storage environment leading to an optimal
storage backbone.

Shrikanth G

shrikanthg@cybermedia.co.in