My background is in accounting so I have a fondness for numbers. I never met a spreadsheet that I did not like. I have parlayed my skills into a few areas in the IT analyst world, and most recently, I have built some models for customers to help justify certain investments. Some of these projects have been on the storage side and others have centered on electronic discovery related issues. Most analysts spend their time trying to help customers beat up vendors on price, but we have taken a different tactic by helping IT folks make some smart buying decisions. Here is what I have uncovered during my financial modeling:
- The biggest cost in storage is by far the amount of redundant data (multiple copies of the same information as well as the same bytes) and the amount of backups / replicas of this duplicate data. This is the source of all data center space, power and cooling, and management issues that most organizations face. ESG research suggests that the majority of users that have deployed data de-duplication are getting 10-20x. This is not surprising given the modeling I have done on how many copies exist inside an organization.
- Electronic discovery costs are linear. Legal service providers charge per gigabyte or per document. Attorneys get paid the same amount of money regardless of how many documents they review. The only way to save money is to reduce the amount of data that gets funneled into the electronic discovery process. If you want to spend less money on electronic discovery, you have to spend money on something that allows you to find data quicker and search it so that you are sending less data to service providers or attorneys for review. I am on a crusade to convince legal and IT to set aside some capital budget for IT products that can help with electronic discovery because the spending here is out of control.
- I just ran a budget for an entire storage environment. Labor was roughly ten percent of the total. I ran another one, and labor was around 5% of the total. I also gathered some utilization metrics (how much capacity was allocated and not used, how much was configured, not allocated, etc). In some cases, the cost of underutilized storage was a higher percentage of the total budget than labor. Maybe it's time to invest one or two more bodies and some resource management software (the labor is needed to set up and run the software and then do something about it).
- Backup is still growing as part of the overall IT budget, but some of this money can be saved if customers are smart with how they use it. For example, if an organization buys an archive solution with some of their 'backup' money, then there is less data in the primary environment to back up (because you have archived the stuff that is not changing). Therefore, you may not need as many media servers and certainly not the most powerful ones, and I know you pay a license fee based on how many media servers you are running or how big the servers are that run the backup software or how much data you back up.
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