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Are you paying too much for storage?

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It's not all gravy
But not all the technological development of storage networking is driving costs down, at least not in the short run. Storage area networks (SANs), in fact, are a mixed blessing. Although they can reduce the total cost of ownership over time through consolidation, centralized management and administration, they increase the acquisition cost.


What does storage cost?
  LOW END
(STANDALONE)
NETWORKED
(MIDRANGE)
HIGH END
Disk 8GB-160GB drives, ATA drives at $235 each, $1,880 total 8GB-60GB SCSI drives at $600 each, total $4,800 $12,250

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14GB-73GB (10,000 RPM) FC drive at $875 each
Controller $500 $2,800 SCSI RAID $20,000 (hardwired FC loops for disk shelves)
Case, frame $100 $650 $40,000 (hardwired FC loops for disk shelves
Motherboard (CPU, memory) or midplane (connectors) $100 motherboard Part of the frame Midplane (part of frame)
OS (Linux OS with various open-source software) $0-$49 No need if direct attached or Fibre Included
Management software $1,000 for basic volume manager $10,000 $100,000 advanced features
Power $80, built-in fan $300 redundant power supply, includes fan Includes redundant power and fans
TOTAL $3,709 $18,550 $172,250
This table estimates the cost elements for 1TB of different tiers of storage, compiled from a consensus of industry sources. Actual costs to the vendor are highly dependent on volume. The relationship of price to component costs has traditionally been quite different for the midrange and high-end products than for the low end, reflecting extremely different profit margins and support costs. However, that gap has narrowed in the last two years.

And until vendor implementations of SAN standards are as consistent as SCSI standards, storage system vendors will have to endure the cost of extensive compatibility and interoperability engineering and testing, costs they will pass on to users. Shops that also mix storage, switches and HBAs from multiple vendors--whether from a philosophical imperative or circumstance--will also have to bear similar costs.

"It is not enough to just conform to a spec. You have to test and certify that it works, and that costs a lot," says William Pinkerton, director/storage solutions at Pioneer-Standard Electronics Inc., Atlanta, GA, a distributor of high-end storage systems. In the past, high-end systems had an advantage in compatibility and interoperability as a result of the extensive certification testing the systems have undergone, he says, but midrange systems are catching up in this area.

Another complicating cost factor is service and support. Organizations requiring more hand holding will find themselves forced to buy more costly storage systems. The high-end vendors excel at service and support, but it comes at a premium price. The new, modular storage technologies promise to be easier to set up and use right out of the box, minimizing this particular cost. "As time goes by, things will get easier to set up," says Dave DuPont, vice president, LeftHand Networks, Inc., Boulder, CO.

LeftHand, for example, offers modular storage consisting of units almost 500GB in size (list price: $12,500). Through virtualization technology--an extra cost--you can set up multiple modules to appear as a single disk drive, making them easier to manage and support. The company offers a comprehensive service program, but rarely expects to get called, says DuPont. "We also have an installation charge, but most customers skip it. They can get it up by themselves in minutes," he adds.

Storage managers at large enterprises, however, are unlikely to start assembling their own modular storage, at least not as primary storage for their biggest, most mission critical applications. "Enterprise storage managers are willing to pay a premium price for performance, availability and service," says Jerome Wendt, senior information technology analyst at First Data Corp., Denver, CO.

In terms of performance, the high-end storage systems have more specialized tools for troubleshooting problems, such as when an Oracle database inexplicably slows down. For availability, the high-end systems offer redundant everything and the automatic call-for-help feature when something goes wrong. And vendor service "helps us to lower our staffing costs. Those are people we don't have to keep on staff," says Wendt.

Still, Wendt isn't optimistic about the future of today's high-end systems in the face of the midrange onslaught. "The midrange is a very viable solution now, and the gap between the midrange and the high end is closing. So, I seriously doubt the future of the large boxes."

Lower costs ahead
But despite the countervailing factors, cost pressures on both high-end midrange systems will only increase going forward.

"Even lower cost storage is coming. Some company will combine serial ATA disk drives and iSCSI to create midrange storage," says Robert Gray, research director/storage systems at IDC, Framingham, MA.

Serial ATA drives-destined for the PC-assembled into large disk arrays will deliver terabytes of storage to the data center at a cost per megabyte of well under a penny. Many of these arrays will have Fibre Channel (FC) connectivity to fit into existing SANs. Beyond that, IP in the form of iSCSI or some other storage over IP standard can eliminate the cost of the entire FC infrastructure.

"These technologies have the potential to be disruptive," says Tony Prigmore, senior analyst, Enterprise Storage Group, Milford, MA. Disruptive technologies first enter a market at the low end, or for specialized situations but increasingly penetrate the high ends of the market as performance improves and features are added, ultimately driving down prices and undercutting the dominant technologies.

But the biggest cost--the cost of labor to manage all this storage--still remains, Wendt point outs. Even here, advances in software, particularly storage virtualization, promise to simplify the task of managing terabytes of heterogeneous storage.

This was first published in December 2002

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