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Storage Economics: When Data Meets Dough

If you think storage is cheap, you aren’t doing your sums right. The big picture, with power, carbon, and legal costs, adds up to a new discipline, says Hitachi Data Systems’ David Merrill – a storage economist

Data growth shows no signs of slowing. At the same time, regulation is forcing organisations to keep more data, accelerating this growth even more.

So much so, David Merrill of Hitachi Data Systems (HDS) is calling for a reassessment of the oft-forgotten storage infrastructure that underpins the data flowing through the information systems that so many businesses now rely on. It is his job to work with HDS’ largest global clients, advising them on strategic information planning, advanced storage architectures. 

In a nutshell, his job covers what might sound a forbidding subject, combining as it does two forbidding words: he is a Storage Economist.

Disks = Money?

“ILM [information lifecycle management], cloud, storage-in-the-cloud, solid state, de-deduplication, and even storage economics, which is around seven years old now, are all great developments in the better use of storage,” he said. “But we need to start talking about storage in the context of money.”

Merrill argues that the increasing commoditisation of storage has clouded technologists’ perception of the true total cost of its ownership. “It’s been a very popular theme around technology economics to monetise the cost of waste. Yet the storage guys are happy with 30 per cent utilisation rates, because they perceive storage as cheap. I mean, you can now go to your local electrical store and buy a one terabyte drive for $50.”

The problem, he maintains, is that the perpetuation of bad architectural practices has made the total cost of storage ownership and its return on investment far higher than the cost of acquisition. “The first thing storage economics can do is help save money, at a time when capital spending is down, but data is still growing. Building a superior storage solution or squeezing more value out of an existing system is key. It may not be cheaper to buy, but it will be cheaper to own. The current way of buying storage is unsustainable,” Merrill said.

Factor in labour, power and litigation

“The number one tenet of storage economics is that price does not equal cost,” he continued. “For some customers, TCO [total cost of ownership] is not going up. Power and litigation costs are high. Labour, maintenance, disaster recovery and even the cost of decommissioning an array all increase the total cost of ownership. And, incidentally, in the UK it’s very difficult and expensive to decommission an array with the e-waste regulations that have come into force.”

Even when the direct costs of storage systems are taken into account, Merrill said the dialogue around more efficient data storage use should involve all relevant operational areas of the enterprise. In this way, any strategy to prioritise storage optimisation projects can be aligned with the wider goals of the business. “If an organisation has a recent incident that makes them sensitive to cost, that’s the area they tend to want to look at first,” he said.