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How to count the cost of storage

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Total cost of service
Anyone who has worked in financial accounting can tell you that unit cost is just one small metric, and the total cost can often be much higher. In storage, it's critical to take a broad view of the actual cost of delivering a service rather than the unit cost for a gigabyte of storage. In other words, what else goes into the system apart from disks?

The most obvious cost elements are hardware and software. Then add in data protection in the form of backup software and tape hardware, and disaster protection with replication software and hardware, extra storage arrays and so forth. And few businesses would dare to run their systems without maintenance, which means support contracts that can easily add an extra 30% to the overall cost of storage.

Stepping back further, there's the infrastructure that allows data storage to exist. Data center costs can add up quickly, especially with rising energy costs. The cost of consumables, such as tape media and offsite storage, is also often overlooked. Some organizations even have "keep forever" policies for tape media, causing these costs to rise significantly.

Of course, personnel-related costs are the elephant in the room. It can be extremely difficult to accurately allocate management costs into a cost calculation, especially for employees who aren't 100% dedicated to storage. But one of the biggest issues with personnel costs is the conundrum of value: It takes little effort, and

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thus little cost, to do a poor job of managing storage; it takes much more money and time to do a good job. In fact, whenever a real assessment of storage management effectiveness is performed, it's unusual to find a company that's overstaffed.

Note, too, that the ratio of these cost areas isn't consistent from one company to the next. Small businesses tend to spend much more money on capital hardware and software, while larger businesses are more personnel heavy. In fact, a TCO analysis at a large enterprise may reveal that hardware and software account for a very small percentage of the overall cost of storage--sometimes even less than 10%.

This was first published in August 2006

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