Justifying the Cost Of Storage : What's Your ROI?

Tuesday Sep 17th 2002 by Enterprise Storage Forum Staff
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When selecting any piece of storage equipment, the question invariably arises - what's the ROI? In this article, John Pearring looks at the cost advantages associated with a backup appliance.

Is your company's data adequately protected and managed? Probably not, most IT managers would admit. Today, network environments consist of so much data in so many places that making protected copies available for both on-line restores and off-site recovery is simply a distant dream.

Most environments have distributed data across servers performing file, web, client/server, and database management functions, and attempt to centralize data on NAS, SAN and RAID products. The data probably originated from and accessed on more than just servers. Users own that data, often on their own local disks. Dozens, hundreds and thousands of workstations and laptops are not only located at headquarters, but also at branch and home offices.

Can your current system handle this growth? Is your data protected in these critical areas: Backup, Archive and Disaster Recovery? And what does it mean if your system fails in any of these areas? The answer is so frightening that most IT managers are left speechless.

The Cost of Inadequate Data Protection
Plenty of studies from Strategic Research Corporation and others site the awesome dollar damage from disasters. One study shows that companies experience two hours of down time each week due to storage failures and data inaccessibility, resulting in hundreds of thousands of dollars lost each year per company due to the inability of network users to perform their job. Suffice it to say, even if they're only 10% right, the cost is not easily absorbed.

To store archive and protect against disaster, consider the many pieces of a typical backup solution: Server Brand, Operating System, Library or Stacker, Tape Drives, Media type, Network interface, SCSI or Fibre, Disk caching, RAID, SAN or NAS, Backup software for each operating system or platform, Cloning or duplication technology options, Clients and options, Agents and options, Archive software or component, Bare Metal Restore plan, software and procedures, Disaster Recovery software and a Disaster Recovery Plan.

Oh, and the integration, installation, support, maintenance, and training opportunities for each of these, as well as the RFP, RFQ, pricing negotiations on each one, the ordering coordination, the coordination of the VARs and suppliers, delivery dates, and plan for deployment.

Then, hope it works.

What if it doesn't? Where do you go to get your money back - more importantly, your lost data?

The average company spends between $100,000 and $1,000,000 in total ramifications per year for desktop-oriented disasters (both hard and soft costs), according to the 7th Annual ICSA Lab's Virus Prevalence Survey (March 2002).

Even a single megabyte of lost data is costly. A 1998 Pepperdine University study, "The Cost of Lost Data", estimated that the average incident of lost, stolen or damaged data cost companies more than $2,500 per affected PC. The same report estimated that the cost of lost data to U.S. economy totaled more than $11.8 billon.

Unfortunately, data stored on disk drives can too easily be lost. The National Archives & Records Administration in Washington reports that 93% of companies they surveyed that lost their data center for 10 days or more due to a disaster filed for bankruptcy within one year of the disaster. Fifty percent of businesses that found themselves without data management for this same time period filed for bankruptcy immediately.

This is why computer data must be effectively managed and protected from loss. In the event of a widespread disaster, such as with September 11, the cost to reconstruct data is astronomical, which drove home the importance of having effective data storage and disaster recovery in place. After the tragedy, a study by Metricnet found that 62 percent of respondents had increased their disaster recovery spending by 0 to 2 percent, and 38 percent have increased spending more than 5 percent.

However, all the components of a typical storage solution can be expensive. An all-in-one solution can take care of backup, archive and handle disaster recovery with just one unit in a cost effective manner.

The Cost of Traditional Storage Management

The costs of managing data today have risen dramatically. According to one study by Strategic Research Corp., typical organizations spend over $350,000 annually on storage management. The same study found that the average cost for managing storage grew by 27% in one year alone, principally for four reasons:

  • Lost user productivity - from time spent manually managing storage space, 'out of disk space' conditions, and locating lost files
  • Lost administrator productivity - from time spent dispatching user requests for restores and scheduling backups and recoveries
  • Lost organizational productivity - from storage failures that prevent access to crucial data
  • Storage maintenance and repair expenses - from repair of disabled storage devices.

Although it costs $1.00/MB to acquire hard disk storage for the client server network, it costs an organization an additional $8.00/MB each year to manage the storage. In the study, the cost components to storage management are user's managing their file structures and assuring adequate storage capacity, user's lost productivity due to storage unavailability and corruption, and administrative tasks such as capacity management, backup, restore, archiving, installation, fault handling and reconfiguration.

In addition, each network user and administrator must spend time out of every week managing network storage data organization and computers. In order to use a baseline that is acceptable, the typical corporation spends $7/MB annually to manage network storage, typically reaching over $300,000 per year.

The Backup Appliance Approach
Data centers are notorious for their compartmentalization of hardware and software into solutions categories. It's the goal of every system manager to put physical and operation boundaries around products. It just makes sense.

A backup appliance is an all-in-one, pre-bundled, pre-tested, pre-assembled integration of all the software and hardware required for a complete backup, archive and disaster recovery solution, which saves both time and money for a data center. For instance, Vail Resorts - which owns and operates four ski resorts in Colorado and ranked as one of the top 10 ski resorts in North America by SKI Magazine - uses a backup appliance approach to storage to manage data between the four properties: Vail, Keystone, Breckinridge and Beaver Creek.

A backup appliance includes:

  • Storage: Today's corporate LANs are undergoing explosive growth as higher capacity data files, more complex applications, and more users task the available storage capacity. A single page of text requiring 4 kilobytes of storage may grow with the addition of a single picture to 2 megabytes. A short multimedia presentation needs 1 gigabyte of storage, and a small library of full-motion videos could require 1 terabyte or more. The cost of physical storage is going down. But in today's data-intensive world, the amount of data that needs to be stored is going up. Storing and protecting data in a cost-effective manner is critical.
  • Backup: By understanding the types of files on your network, and managing the files based on their characteristics, backup, storage and management costs can be reduced. Identical files that are located on multiple computers are considered duplicate data. By eliminating the duplicate data from continuous backup, significant savings can be made in backup time. Since inactive files are accessed so infrequently, it would be more cost effective to store the files on less expensive, slightly slower access media, matching less access frequency to slightly less access performance at the benefit of significantly lower media expense.
  • Disaster Recovery: If a business is not prepared for a widespread disaster, the recovery process can be a painful and costly process. When a disaster strikes, many companies go out of business because of the lack of recovery planning and subsequent delays in recovering the mission critical business data. Each day that your business is not operational causes a loss of business revenue. The longer the business cannot be performed, then the greater the revenue loss potential. If you cannot get your critical business functions, including business location, phone systems, computer systems, programs, data, and personnel, restored and operational in a 6-month time frame, typically, you will lose all of your business revenue.

Data Management Benefits of a Backup Appliance
Backup appliances operate efficiently by performing one initial full backup of data and incrementally thereafter, backing up modified or changed data to reduce workload, increase backup window and reduce management costs.

Less efficient backup products force customers into the following scenario:

  • Do a full backup to ensure that all data is protected.
  • Do incremental backups on a daily basis of all files that have changed since the last full backup.
  • Do another full backup at a point where recovery using 'full plus incremental' backups would produce totally unacceptable performance (typically once a week).

A backup appliance, however, performs the following:

  • An initial full backup of all systems to ensure that all data is protected.
  • Incremental backups thereafter, automatically reorganizing backup sets and media to reduce restore

Some backup appliances, for instance, don't need additional full backups because it consolidates all data belonging to a particular client on the minimum number of volumes (tapes or disk) possible. Recovery of that client's data is therefore much more efficient, because the appliance doesn't need to look through dozens or hundreds of tapes for the files.

A Centralized Solution
Every platform, system, LAN workstation, mobile laptop, file server, branch office, and accessory solution (phone systems, video surveillance, etc.) that are backed up by a backup appliance no longer require attached tape and distributed operations management.

No longer do users whose system has a backup/archive client need to contact a system manager or operator to restore a backup or retrieve an archive.

The system managers who administer and operate the backup solutions in your enterprise don't have to learn a separate procedure for every file server, every operating system, every department, and every new platform that arrives in the data center.

Browser interfaces allow management, monitoring, and operations to take place from anywhere. A backup appliance solution can be distributed with many appliances managed from one location. Data will remain forever distributed in today's environments, but managing the backup, archive and disaster recovery of that data no longer needs to be chaotically disbursed.

The Bottom Line: ROI of a Backup Appliance Solution
The following return on investments opportunities can individually, or together, provide a return on investment. A backup appliance approach to storage can:

  • Reduce your storage expansion costs, by eliminating the need to duplicate data across users, networks and by storing inactive data in archive packets.
  • Reduce your network management costs by eliminating the need to backup data already backed up and available. No more full backup requirements, since the data is already backed up and on-line.
  • Eliminate productivity losses due to backup or archive inaccessibility.
  • Reduce downtime from lengthy restore or retrieve operations, because all of a user or manager's data is available for restore on-line or retrieval on-site.

Deployment Savings
The purchase of a backup solution often disregards the time required to put a solution into operation. Because of the short life cycle of software and hardware products, however, the length of time an enterprise, department or single data center spends on deployment can make or break the success of a product.

Many solutions are depreciated on a 3-year time frame, but the actual lifetime of a solution more than likely averages only 1.5 years, or 18 months. Practically all software products must be re-evaluated on an annual basis in order to decide whether to install the latest upgrade or look at a different investment.

When studying the lifetime of a product, IT managers and directors see several critical turning points for a solution:

  • 30 days - evaluated in order to return for a full refund. If not, return.
  • 3 months - evaluated for successful integration into a daily operation. If not, still time to go back to old solution.
  • 1 year - evaluated for upgrade. If not, let it die off while you look for a replacement.
  • 18 months - now, way through the depreciable life of the product has it paid for itself. If not, plan for an RFP for a new solution.
  • Many backup solutions take almost the full 30 days just to get completely installed and running. That's not usually a good time to assess whether to return the solution. After 3 months, many companies still have parts of their solution (extra libraries, clients, database agents) sitting around waiting for deployment.

This type of solution should be easy to install as well. Vail found that installing a backup appliance took about 30 minutes and was fully operational within two or three days, completely deployed and operating like it will everyday from that point onward.


John Pearring is president of STORServer., Inc., a fast-growing, employee-owned manufacturer of the STORServer Backup Appliance. Based in Colorado Springs, the company was formed in 1995 from SSSI, identified worldwide as one of the premier technology providers for ADSM/TSM consulting and solutions.
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