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Vol. 1 No. 5 July 2002

Chargeback ROI: Does accountability pay?

Without a doubt, chargeback for storage use is attracting a lot of interest. But does it make sense financially? Chargeback can save enterprises money, says IT ROI expert Tom Pisello, CEO and founder of Orlando, FL-based consulting firm Alinean, but only if it slows storage growth dramatically. Pisello looked at what storage growth costs companies today. For example, a company with 1TB of storage today will increase that figure by 76% this year, or about 760GB, he projects. With a TCO of about $0.20 to $0.30/MB per year, 760GB of extra storage will cost about $200,000. Then, Pisello looked at how much a chargeback program costs to establish: 25% of a storage professional's time ($25,000, assuming $100,000 annual salary and overhead), and 100% of an administrator's time - or about $75,000. The bottom line? If the chargeback program manages to hold the line on storage use, a company could get back $1.66 for every $1 spent on accountability, Pisello says. But if chargeback only slows growth by a realistic 40% to 60%, it's a toss-up...

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