Way IT Organizations Need to Consider Options With Respects to Their Storage Deployment Shifting Rapidly

This study was written Neuralytix and sponsored by StorONE.

Executive Summary
The way IT organizations need to consider their options with respects to their storage deployment is shifting rapidly, and dramatically. This Insight looks at the reasons behind this shift and how four vendors – Amazon Web Services (AWS), Nutanix, Pure Storage and StorONE are responding to the changes.

Introduction
Just like computing capacities have become a service or a utility, storage has now followed suit. The need to commit to large capital expenditures, arduous maintenance and support by skilled professionals, and the costly, and risky need for migrating data to a new storage system once the existing storage system can no longer meet the needs of an organization, is no longer necessary. Apart from necessity, it is no longer desired.

At the end of the day, storage should not be a concern at all. It is the data that it stores that matters. Data fuels today’s digital economy. Without it, there would be no analytics, no AI, no reporting.

The result would be devastating to any organization trying to understand how it can improve its market standing and competitiveness. However, historically, organizations have had to predict storage performance and capacity over 3 to 5 years. This protection is then translated into capital purchases that result in significant overprovisioning, and wasted expenses, until the capacity and performance potential of the investment is reached. At the end of the forecast period, the organization then has to migrate the data to the next storage system, with a new prediction over the same course of time, and the cycle repeats itself.

Instead, storage and storage systems need to provide just enough capacity and performance to meet the needs of the applications it supports. As the application needs change (whether it is up or down), the underlying storage should be elastic and flexible enough to match these new needs.

What is necessary in today’s world is the ability to deliver storage performance and capacity on demand. In other words, storage-as-a-service (StaaS). Traditionally, StaaS has been offered as a capacity on demand (CoD) model, in which an organization commits to an investment in capital equipment, and then it has a fixed price for increasing capacity. This works to a degree, but doesn’t have the full flexibility of a true StaaS.

Additionally, these traditional models have often been presented in the form of an operating lease.

Given the new International Accounting Standards Board (IASB) rules relating to leases, the appeal of this has diminished.

So a true StaaS model is one in which storage capacity and performance can be defined and delivered in exchange for the appropriate fee. As the needs change, the fee will change depending on capabilities, capacity, or performance.

As a result, a number of on-premises StaaS has now appeared for organizations to consider. This paper will look at four offerings from Amazon Web Services (AWS) storage services, Nutanix, Pure Storage (Pure) Elastic Storage Service (ES2), and StorONE (S1).

What does StaaS solve?
StaaS solves the problems that have plagued storage from the beginning.

A true StaaS offering must have at least the following attributes:

• Flexible and granular capacity changes;
• Variable performance guarantee;
• No long term commitments;
• HA and durability; and
• Simplicity with respect to procurement and
  managing the solution.

Flexible and Granular Capacity Changes
Perhaps the biggest challenges facing organizations with respect to storage is how to optimize capacity needs, especially as needs change suddenly.

Traditionally, there are 2 approaches, purchase the capacity needed for a given period upfront, and use it up throughout the period; or purchase only what is needed today, and purchase additional capacity once a need is defined.

In the first approach, there is the benefit of being able to absorb unexpected changes in capacity needs such as when one organization acquires another. The downside of this approach is that the organization is committing capital that does not get realized until later in the forecast period, resulting in money spent with no return.

This can be represented by the following graph:
As the graph illustrates, while there is some return on investment in the early time periods, the true return is not realized until the later periods.

Figure 1: Capital to Value Comparison

For many organizations, only in the later periods will the value of the storage system match the outlay. Furthermore, the potential of the storage system is temporal, and at the end of the time horizon, organizations typically repeat the cycle. In other words, most organizations will never get the full ROI they desire.

The second approach, in which an organization buys only what it needs is a more interesting one, and matches more closely to a positive return on investment. In this model, the organization makes periodic new investments in capacity.

Figure 2: Capital to Value Comparison, Approach 2

The challenge with this approach (which parallel the traditional CoD model), is that there are going to be times when there is under-investment, therefore, failing to meet the organization’s needs; and conversely periods of time in which there will be over-investment, whereupon, excess capacity will remain idle until used.

Additionally, like the earlier approach, by the time the needs are fully met, a new investment cycle will be required.

Ideally, the needs of the organization and the investments are completely aligned. Also, there should be no need for investment cycles, as data often transcends storage system investment. So, StaaS solves this problem by delivering the necessary capacity ad infinitum.

Furthermore, there are no capital outlays, and the StaaS provider will persist the necessary capacity as long as the organization subscribes to the service.

Variable Performance Guarantee
Like capacity, performance needs to be flexible and variable. Organizations often have peak periods and low periods for performance. In general, performance demands tend to increase over time. But also like capacity, organizations do not want to overcommit to performance guarantees, nor find themselves unable to service the needs of its clients when performance needs to be boosted.

StaaS can solve this problem by allowin organizations to buy the amount of performance for their needs, and then changing it as the organization demands. Again, like capacity, this should be delivered so long as the organization is a customer of the vendor, and will not force the organization to engage its own people or resources to meet the ongoing performance demands. The StaaS provider will therefore be responsible to meet the performance needs by migrating live data as necessary to higher performing storage systems without access or performance interruptions.

No Long Term Commitments
Since many traditional attempts at StaaS relied on leases, this means that organizations are committed to long term agreements, typically for a minimum of 3 years.

With the introduction of the International Financial Reporting Standards (IFRS) 16 by the IASB in January 2016, organizations have been scrambling to replace traditional operating leases (previously an off-balance sheet item) to alternative methods of off-balance sheet operations.

StaaS solves this problem as title is never transferred to the organization. Additionally, StaaS providers typically require little to no time for changes to configurations, and do not constrain organizations to (typically long) fixed term contracts.

HA and Durability
It almost goes without saying that the underlying storage system from a StaaS provider needs to deliver HA and durability for the data stored.

That said: since the configuration of the storage systems are determined by the organization, it does not relinquish the organization from engaging in best practices to ensure that the data is backed up, and otherwise protected, since the StaaS provider is only capable of providing best effort when it comes to the redundancy of any solution.

With that said: data durability is something that is unique when it comes to StaaS. Since data that is stored on StaaS remains there until the organization removes it, the onus is on the StaaS provider to deliver a storage system that will protect the organization’s data from being corrupted, or make it otherwise inaccessible.

Simple Procurement and Management
Finally, and far from least, StaaS providers must allow organizations to procure capacity and performance easily. Given that StaaS providers deliver short or shorter term commitments, and payments are typically made monthly, procuring StaaS capacity and performance is analogous to procuring power, network capacity, or other utilities.

While the procurement is typically simple, a StaaS provider needs to also provide a simple way for organizations to manage the storage system.

Although traditional methods of configuring and tuning storage systems can still be provided, the whole idea of StaaS is that organizations can procure the required performance and capacity that they need, and it is up to the StaaS provider to ensure that those needs are met. As such, IT organizations will need to rethink the energy and resources they dedicate to storage data management.

This last point is particularly poignant. Much of the cost of sustaining storage has been in the maintenance. Many organizations report that over 50% of their TCO is related to support and maintenance. By almost eliminating this need, organizations will be able to save substantial money in terms of headcount. This translates to being able to do more with less, or in many cases, IT organizations have embarked on retraining their IT staff in more value creation capabilities.

Challenges related to StaaS
Based on the above qualitative analysis, there does not seem to be any downsides to StaaS. It solves all the business needs in with respect to people, process, technology, and economics. For many organizations that is very much the case.

However, industry and individual organizations dependent, there are a number of considerations when shifting to a StaaS model:

• Change in operations;
• Perceived lack of ownership; and
• Potential lock-in.

Change in Operations
For most organizations (particularly large organizations), the role of the storage administrator is, for the most part, minimized. Processes will need to be updated to reflect the simpler operations related to storage. For many organizations, this could mean the elimination of the storage administration task altogether, and moving the responsibilities to system administrators. This can have a severe impact on morale, and headcount.

Perceived Lack of Ownership
As humans, we have a tendency to want to own things. Corporations and other organizations are no different. When moving to a StaaS model, there is a perceived notion that the organization loses ownership of storage. In fact, that is true. The organization literally (and legally) loses ownership of the storage systems, however, it will never lose ownership of its data. After all, data is all that matters. Whether the storage system is acquired, capitalized, leased, or delivered via a StaaS model is irrelevant, so long as the capacity and performance needs are met.

Potential Lock-In
Of all the considerations and challenges related to StaaS, potential lock-in is perhaps the most controversial. On the one hand, the organization is contracting for the delivery of storage capacity and its relevant performance. However, what if the organization no longer desires to work with the StaaS provider? Or, what if the StaaS provider is not delivering on its promises?

In this case, there are significant ramifications – the organization will have to contract with a new StaaS provider, and data migration (a risky operation) will need to occur, along with the associated changes in application integration, and likely interruption to application availability.

This is where finding a StaaS provider that will allow an organization to start small, and grow with it is paramount. Obviously “small” is a relative term: for some organizations that could mean several gigabytes, while others will consider hundreds of terabyte as being “small”.

Engaging a StaaS provider is no different to engaging an Internet Service Provider (ISP) or a network infrastructure vendor. Ultimately, it is a long term relationship between the organization and the provider or vendor.

The vendors oo, with the understanding of the benefits and considerations needed when evaluating whether StaaS is your organization’s desired go-forward direction, let’s look at the 4 vendors Neuralytix has chosen to analyze:

• Amazon Web Services (AWS) storage services;
• Nutanix;
• Pure Storage (Pure) Evergreen Storage
• Services (ES2); and
• StorONE (S1).

Of these vendors, AWS is a cloud-only provider, Pure and StorONE are storage vendors, and Nutanix is best known as a HCI provider.

AWS
Of the 4 vendors, AWS is the most unique in that AWS does not actually provide on-premises StaaS. It provides a number of different ways in which data can be transferred to AWS, such as the AWS Snow Family of products (AWS Snowball, AWS Snowball Edge, and AWS Snowmobile). It also provides a gateway product that sits on-premises for transferring data to AWS S3 object storage service called the AWS Storage Gateway.

However, Neuralytix has decided to include AWS in the comparison because it tends to be the bellwether in terms of XaaS economics.

Nutanix
Nutanix is unique in this mix of vendors in that it is known best for its HCI solutions. However, with any IT infrastructure, the underlying data needs are arguably the most critical, so Nutanix have options that focus on data delivery (i.e. storage) as well as compute.

The software that Nutanix develops sits on industry standard servers, and a number of them are clustered together to deliver the capacity and performance needs for a customer. One of the challenges associated with HCI is the way data is protected.

Traditional HCI (such as VMware VSAN and Dell EMC VxRAIL) typically use erasure coding to distribute data across many (if not all) nodes in a cluster. While this can provide high durability for the data, it increases the overheads across the cluster, resulting in larger servers to be acquired for the cluster, increasing costs. Additionally imbalance in terms of the capabilities of each node in the cluster will also impact performance.

Nutanix, on the other hand, has the ability to pin data to specific nodes. This reduces the amount of data that traverses across the cluster. However, if data sharing is needed, then the data will need to traverse across more hops, thereby reducing performance.

In Neuralytix’s opinion, neither approaches are optimal.

Pure ES2
Pure introduced the ES2 service in May 2018.

Essentially, Pure provides its FlashArray (and now its FlashBlade) storage system on-premises, and organizations can determine the capacity and performance they need, for a fixed monthly fee. The entry level for Pure ES2 is 100TB with a minimum of a one year commitment.

ES2 meets all the IFRS 16 requirements set out by the IASB since the customer never has title of the storage array(s).

While there is a fixed monthly fee, customers can choose to pay more and get more capacity as their needs grow. In many ways, ES2 works like a mobile phone plan. You get a minimum amount of capacity (akin to minutes/month on a mobile phone plan), and if you go over the minimum you are charged for the overage at a premium rate. Pure only charges for what you use, and the time for which you use it, so a customer is not locked in.

One drawback of Pure ES2 is not the program, but the underlying storage solutions – with FlashArray, the product is essentially a block-only solution, although for capacities less than 100TB, there is the ability to run Windows File Services within the array to deliver capacity via the SMB or NFS protocols; and with FlashBlade, it is only provides NFS and S3 protocols. This means for a larger organization needing both file and block capabilities, it is likely to have to make a decision to subscribe to two disparate solutions. However, everything can be managed via Pure’s cloud-based management platform called Pure1.

From the outset, Pure has distinguished itself for being one of the most user-friendly and simple to manage storage system on the market today, thereby addressing the key criterion above for simplicity in management. The terms and conditions of ES2 is also relatively straightforward, making procurement simple as well.

Pure tailors an ES2 subscription to each customer’s individual needs, so there is no blanket pricing that is advertised.

Over the course of 3 to 5 years, customers should expect to pay a premium over capitalizing the acquisition of the storage system. With the Pure “free every three” promise, customers will be assured that they will get the latest controllers and capabilities at least every three years. However, this feature is somewhat negated by the fact that a customer will demand specific capacity and performance profiles, so Pure will need to deliver whatever system meets the demands of the customer
anyway, irrespective of what gen of product is needed to meet the need.

StorONE
A relative newcomer to the storage market is StorONE (S1). S1 has been developed over nearly a decade to deliver on-premises StaaS via block, file or object protocols. It has also optimized its data placement algorithms to minimize impact on performance as capacity needs grow.

Typically, S1 says that it will require up to 90% less hardware compared to its competitors to deliver the same capacity and performance. With the integration of NVMe based Storage Class Memory (SCM), this reduces the overheads and latency compared with traditional SAS connected solutions.

Comparisons: Basic Feature Comparison
Below is a table that compares basic features of each of the providers:

$/TB/month Snapshot Price Comparison
In calculating snapshot pricing, Neuralytix assumed a 20% rate of change during the month.

$/TB/month Price Comparison
Nutanix and Pure pricing excludes the cost of maintenance which is expected to increase base price by around 20%.

Analysis and conclusion
While each vendor approaches StaaS differently, it is clear that StorONE is a clear winner in terms of economics on raw terabyte costs. Additionally, StorONE includes file and object protocols that none of the other vendors include.

Other considerations when it comes to evaluating cost – for AWS, 20TB is considered a large opportunity, so Neuralytix expects that the cost of deploying exabytes would be lower than our analysis.

Additionally, since both Nutanix and Pure are based off US Government NASPO pricing, we expect that the actual street price to be 20-30% lower than our analysis.

We do caution that this analysis must not be taken as the sole approach to evaluating StaaS. There are many factors when looking to a StaaS provider.

Some of those other considerations must include:

• Scale – how large are you expecting to grow your volumes and file systems?
• Application needs – are your applications looking for a more compute intensive or a more storage intensive infrastructure? Is there a benefit in having the hypervisor, compute, and storage in one solution?
• Data locality – will your data be accessed or processed from the cloud, or is it mainly a local, on-premises need?
• Architectural preferences – some users prefer storage systems that are purpose built for storage, while others focus less on the architecture of the storage system.

Overall, what this analysis demonstrates is that there are choices for users. Each user has different philosophical, technical, and even political approaches to infrastructure.

Neuralytix believes that users should start a journey towards subscription based storage. In doing so, it allows the cost of storage to be balanced vs. the value of the data it stores, thus giving a clear ROI, as well as giving rise to new economic considerations for how data can improve the success of the user’s organization.

Notes
i AWS delivers block, file, and object as separate services.
ii Pure flashArray has a for-fee optional Windows File Services license that can turn a portion of the flashArray into a NAS solution. However, Pure recommends that the amount of NAS does not exceed 100TB.
iii Nutanix uses either software encryption (which is expected to have significant performance impacts) or Self-Encrypting Drives (SED) which carries a price premium.
iv Based on published pricing of Amazon EBS Snapshots to Amazon S3 at https://aws.amazon.com/ebs/pricing/.
v While vendors other than AWS do not explicitly charge for snapshots, it is important to note that a larger system may be required to store the snapshot changes for these systems which may be higher than AWS.
vi Based on vendor’s published price on June 30, 2019.
vii To make the comparison fair, AWS EBS Provisioned IO/s SSD (io1) Volumes pricing for 150,000 IO/s has been used. Based on published pricing at https://aws.amazon.com/ebs/pricing/.
viii As Nutanix does not offer an on-premises StaaS, for comparison purposes, we are assuming a 8% financing of the minimum hardware required over 36 months. Neuralytix has chosen the Nutanix Appliance model number NX-3360-G6-00320 as a minimum viable product to deliver around 20TB of SSD storage, using a redundancy factor of 3. For the capacity, we have discounted raw capacity by 30% to account for the HCI software necessary. Pricing used is based on US Government NASPO pricing.
ix To calculate ES2 pricing, Neuralytix has amortized an X20 with 28.8TB raw discounted by 20% for Purity software overheads over 36 months, and
applied a 10% price premium for the ES2 service. Pricing used is based on US Government NASPO pricing. For data reduced calculation, a 5:1 ratio has been applied. An 8% interest rate was assumed.
x Based on annual pricing.
xi Since HDDs and SSDs are quoted in gigabytes, for the comparison, Neuralytix is using 20TB, not 20TiB. At 20TB, Neuralytix is estimating 10,000 provisioned IO/s for this comparison.
xii Nutanix does not have a concept of minimum commitment, as it doesn’t offer an on-premises StaaS solution.