Writing the book on SAN ROI

A look at the paybacks on ROI for two companies implementing SAN solutions

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Writing the book on SAN ROI
By Alan Earls

What's the payback on SAN investments? According to a recent analysis conducted by KPMG on behalf of Brocade, money spent on SANs is money well spent. The mini-study, heralded in a press release over the summer from Brocade, attempts to identify Return on Investment (ROI) and quantifiable benefits yielded from SANs in enterprise-class storage environments.

The study
Brocade customer, Intuit, Inc., was one of the two companies participating in the initial study, entitled Case Studies on the Business Impact and Strategic Value of Storage Area Networks. The study was comprised of interviews, questionnaires, analysis of technical documentation, and the use of a financial model that analyzed the ROI on the companies' investments in SANs when compared with the direct-attached storage model that they had prior to the SAN. Perhaps unsurprisingly, the study revealed that the financial return from implementing a SAN is significant and that companies can use SANs to improve their competitive position.

The study also found other benefits, including:

  • Reduced capital expenditures and optimization of existing equipment investments
  • Increased IT staff efficiency
  • Higher system and application availability, leading to more application uptime and customer satisfaction
  • Ability to efficiently exploit full value of information assets
  • Faster time to market with new products
  • Better IT decision making through granular knowledge of the demands on the storage environment
  • Flexibility to move on new initiatives and reallocate storage and application resources quickly

The results
Intuit had implemented a SAN to attain the benefits of storage consolidation, backup and recovery, and high availability. According to the study, after SAN deployment, Intuit has been able to reduce backup times from 26 hours to four hours, and the SAN has delivered an annual return of 123 percent. For its high availability systems, the SAN produced an annual ROI of 525 percent and complete payback of the SAN in two months. Implementing the SAN for storage consolidation has produced an annual ROI of 296 percent. Additionally, centralization of Intuit's storage libraries has led to lowered IT management costs, increased productivity, and the ability to handle system-wide data growth of 75-100 percent per year. Similar results at Federal Express were also chronicled in the study.

Other points
Not addressed, however, is whether such glowing results can be considered typical. "The high ROI that SANs offer is achieved through server and storage consolidation and centralized management, resulting in improved asset utilization and operational efficiency," says .Jeff Seltzer, Vice President of Global Alliances, Brocade. "The companies showcased in our published study are representative of what we have been finding across the board." Seltzer also lauded KPMG Consulting "as instrumental is validating the accuracy of our ROI methodology."

Todd Paris, senior strategist at KPMG consulting notes that, while the published study included only two companies, other Fortune 100 companies did participate. "Time and time again, we found the ROI benefits to be strong," says Paris. Further adding to the validity of the study and the corresponding model, each of many companies that KPMG and Brocade profiled not only added their data points, but also served as validation points in terms of the model structure and completeness, he says. "Having initially developed the model, tested it with leading global companies, and 'run' the ROI model, we [KPMG Consulting] are confident in its validity," says Paris.

Copies of the Brocade/KPMG report can be obtained at http://www.brocade.com/events/events-ROI.jhtml.

The two companies are also sponsoring a series of seminars called "Measuring SAN Success". The events are being held in eight cities across North America from this week through November 1, 2001.

Additional Resources
* How can I calculate cost/benefit on a SAN?
ROI on a SAN implementation depends on a number of factors, and SAN expert Christopher Poelker lays out 13 general factors in his response to this user-submitted question.
http://searchstorage.techtarget.com/ateQuestionNResponse/0,289625,sid5_cid408875_tax286192,00.html

*How can I build a matrix of storage solutions and their TCO/ROI?
SAN expert Christopher Poelker has outdone himself with this answer. If anyone is looking for information to help evaluate and make SAN purchase decisions, this is a must-read. Included are references to key analyst reports where this type of information can be obtained. The reader mentioned comparing against the five S's. Do you know what these are? Poelker also goes on to offer a list of over 25 characteristics you should consider in enterprise SAN evaluations.
http://www.searchStorage.com/ateQuestionNResponse/0,289625,sid5_cid416537_tax286192,00.html

*How can I quantify SAN advantages?
Although the benefits of SANs are obvious to storage administrators, quantifying them can be difficult. One recent study found savings of more than $600,000 a year by choosing a SAN over a conventional storage architecture. Want more info on this vendor-neutral study and where to obtain a copy? Check out this tip:
http://searchstorage.techtarget.com/tip/1,289483,sid5_gci525783,00.html

* What are the issues when considering SAN deployment?
According to storage management vendor Tivoli Systems Inc. (an IBM Company), the best way to find out what you need in a SAN is to start by finding out what you already have. According to Tivoli, the first thing you should do once you recognize the need for a SAN is take an inventory of all the hardware and software in your company. Want to know more about the inventory process? Click here:
http://searchstorage.techtarget.com/tip/1,289483,sid5_gci534530,00.html


About the author: Alan Earls is a freelance writer residing in Franklin, Mass.

This was first published in October 2001

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