HDS Created an Analytical Methodology: Storage Economics

Hitachi Data Systems Corporation has created an analytical methodology, termed Storage Economics, that reflects a major transformation in the way companies assess, view and understand their storage requirements.

At a time when every organisation is having to justify IT spend, pressures on IT managers to drive even more value from investments have grown exponentially. Added to this, more people are getting involved in the decision-making process and new metrics are being considered for justifying spend, far beyond the one-dimensional return on investment model.

Furthermore, nearly two-thirds (63%) of IT managers need help managing operational costs associated with their storage infrastructure and 62% find it difficult to calculate these operational costs. The need to better understand storage costs is paramount. Storage Economics, the methodology being spear-headed by Hitachi Data Systems holds the key to businesses obtaining greater return on their assets than ever before.

"Many companies with large scale IT infrastructures are on the verge of the ‘perfect storm’ regarding their storage environment," said Michael Väth, senior vice-president and general manager for EMEA at Hitachi Data Systems. "Financial pressures caused by uncertain economic conditions have been exacerbated by a spike in demand for storing unstructured data, compliance, and the pressures of providing resilient business continuity solutions. The knock-on effect is that IT departments are being asked to do even more with less."

Based on over six years’ of customer data, Hitachi Data Systems’ Storage Economics methodology comprises a series of services and tools to help organisations better understand and assess their storage needs from an economic perspective. One element of the methodology, an estimator tool, allows businesses to visualise how changing budget priorities could impact on overall data centre investments. The methodology incorporates 33 different cost categories for storage, and hardware costs are not necessarily at the heart of this. Factors incorporated range from electricity costs, data centre floor space costs, backup server costs, compliance risk and data retention issues.

"When considering the lifetime cost of a high-end storage solution, the architectural, operational and environmental characteristics are typically more important factors than the initial capital outlay," said Nick Sundby, consulting director for IDC’s European Storage Group. "Customers can benefit from tools such as the Hitachi Data Systems’ Storage Economics methodology to help analyse and quantify the potential return on a proposed storage investment, without the need for a complete view of their internal cost structure. This will drive more widespread and effective use of financial modeling in the storage purchasing process, and is particularly appropriate in today’s economic climate."

"Storage Economics is about identifying the true economic owner and helping them to understand how other cost categories beyond CAPEX impact on their business. In reality this means having a conversation with the CFO as well as the CIO and IT director," said David Merrill, creator and business consultant of the online estimator at Hitachi Data Systems.

"Ultimately this means selling less storage to customers, but for users to get more value from these assets. It’s like living off your own body fat," concluded Väth.