Storage Basics: Reining In Storage Costs

Thursday Jul 15th 2004 by Mike Harwood
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Storage Basics: Reining In Storage Costs

One of the toughest challenges facing IT managers of enterprise networks and data centers is finding cost-effective and reliable methods to handle the explosion of information created by e-commerce and other initiatives. Storage area networks (SANs) provide a flexible, networked storage solution, but at a high cost.

There are many fast-growing, but undercapitalized, companies in need of storage solutions. Instead of shouldering the expense of buying, configuring and installing new storage systems in climate-controlled rooms with redundant components, these businesses need to find a viable and affordable alternative.

Wavefire Technologies is one company in need of a solution. Due to projected growth and shifting data storage needs, Wavefire is considering a SAN solution, but because of fiscal restraints, the company is forced to explore its storage options carefully. In this and the next Storage Basics article, we will explore two alternatives companies such as Wavefire can consider when looking for a storage solution: refurbished SAN equipment and utility storage. We'll focus first on secondhand storage equipment, and look at utility storage in the next article.

Where to Buy Used Storage Equipment

As with anything else IT-related, there is an active market for used storage equipment, and finding vendors that sell used SAN components is not a difficult task. While many companies have embraced this market, others remain cautious. Purchasing anything used carries with it a host of concerns, and SAN equipment is certainly no exception.

Darcy Buskermolen, CTO of Wavefire, finds that purchasing secondhand or refurbished SAN equipment is a difficult decision to make.

"As the data storage needs grow for our company, we are looking toward a SAN solution," Buskermolen says. "As with most companies our data is critical. Can we trust our data on used storage equipment? Let's be honest, it's like buying a car — if I had the money, I'd buy new every time. There's just less chance of breaking down."

Reliability is not the only consideration for Wavefire.

"One of the reasons we are considering a SAN solution is to take advantage of the high-speed capacities of a SAN," Buskermolen says. "One of the concerns we have is investing dollars into antiquated equipment. We all know the lifespan of technology is short. While lease-returned hardware may be in working order, it is still older technology. By buying used, we may not be taking advantage of the latest SAN technology."

Page 2: 'Price and Availability'

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'Price and Availability'

These are the types of questions and concerns Harry McMaster is used to hearing. McMaster is the president of Systems Resale Solutions, a company that specializes in the sale of refurbished and used storage equipment. While purchasing secondhand may not be the solution for every company, McMaster points out that there are two clear reasons why companies lean toward a used solution: "price and availability."

Price is the most obvious advantage of a used component solution. Used storage equipment allows a company to implement a storage solution at a fraction of the cost of deploying a new SAN and lets companies spend less at the time of purchase.

As for availability:

"Almost every conceivable component, from racks to switches, fibre cards, power supplies, disk and tape drives, are readily available on the resale market," says McMaster. "We ship from stock or through our network of resellers; we can generally supply the product within 24 hours."

Companies that deal in used storage gear are quick to point out that it is not a case of either...or; instead, many companies are taking a more integrated approach. A combination of used and new components lets companies get the maximum benefit from an investment while at the same time assuring reliability on critical components such as hard disks.

"A large number of our customers will order SANs made up of a combination of refurbished and new components so they get the best of both worlds, reliability at a much lower price," says McMaster.

In some cases integrated used and new equipment can be covered together under an extended warranty.

McMaster identifies other points to consider when looking to buy used storage equipment:

  • Storage, like all computer hardware, depreciates rapidly. A used solution can offset the depreciation. Generally, once you take delivery of your new storage equipment, it has depreciated at least 15%, and when it is installed you lose another 15% on your investment.
  • Switches, racks and controller cards are not mechanical and are very reliable. The most likely component to fail in a SAN is a disk drive.
  • Most of McMaster's customers do regular maintenance on their systems and they stock used spares.
Despite the advantages of buying used components, most customers want a warranty to fall back on. McMaster has an answer for them:

"Most disk drives are fully warranted by the manufacturer for up to five years, and we guarantee all our refurbished equipment for one year," he says. "Often we can extend whatever is left of the manufacturer's warranty to the customer."

With the advantages of purchasing used SAN solutions, it is little wonder that the resale market is as active as it is. For most companies, it makes sense to save costs whenever possible, especially when it comes to buying expensive computer equipment.

As for Buskermolen, he would prefer to work with new equipment, but concedes:

"For me, the true value of the used SAN market is taking advantage of combining new equipment with reliable used components. I would prefer to keep critical components such as hard disks new and augment the network with used equipment where appropriate. In addition, there is clearly a benefit to network up-time by purchasing spare components for hot-swapping."

With a lower price, high availability of components, the flexibility to match new and old, and the benefit of a warranty, a good argument can be made for a role for used storage components. In the next Storage Basics article, we'll examine another storage option, utility storage.

See all articles by Mike Harwood

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