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


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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.

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