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Why Isn't Storage Getting Cheaper?

Part 4: The Glass Floor

Why isn't storage getting cheaper? Storage capacity keeps growing, but unstructured data grows at least as fast. IT organizations have tried to contain costs, but tiered storage has not worked out that well. Although there are technical limits to the effectiveness of tiered storage, the biggest challenge is a business one: Disk drives are a very small component in the overall cost of storage.

This series of articles attempts to answer the question:

  1. Too Cheap to Manage
  2. Too Much to Manage
  3. Tiered Storage
  4. The Glass Floor
  5. Storage as a Service

The Glass Floor

As I've mentioned in the past, there is a "glass floor" below which storage costs simply cannot drop for technical reasons. This seriously limits the effectiveness of cost savings activities in general and tiered storage concepts in particular!

Hardware Costs

Consider an average enterprise storage array. For about $250,000 you get a rack-sized device with all sorts of software and hardware capabilities, plus about 50 disk drives. If we were just buying "spinning rust," as industry wags often claim, no one would consider buying an enterprise storage array. Instead, enterprise storage companies sell their kit for its value add over plain old disk capacity (JBOD): Networked enterprise storage offers tremendous advantages over JBOD. These advantages are apparently so compelling that businesses everywhere have been ready to spend serious amounts of money for comparatively little disk space.

The disk drives themselves aren't run-of-the-mill consumer items, but they're not all that expensive compared to the total cost of a storage array. Each of those 50 drives probably lists for $2,000, so disk drives make up 40% of the list price of our example storage array. Much ink has been spilled arguing whether enterprise disk drives are worth their list price, which can be 10 times higher than consumer units. But disk drives are not manufactured by enterprise array companies anymore, and they are purchased at steep discounts in massive numbers. Most of that cost is profit to the array vendor, and they are normally willing to sacrifice margin there rather than on their core value-added software features. After negotiation, disk capacity probably makes up less than 10% of the purchase price of a storage solution. The disk drives themselves are simply not a major component of the cost of enterprise storage.

Let us now apply these basic facts. Organizations typically implement tiered storage in one of the following ways:

  1. Extra-array tiering involves the use of multiple independent storage systems. An organization might buy a smaller amount of capacity on expensive high-end arrays and a larger amount on cheaper midrange models.
  2. Intra-array tiering requires a storage array or virtualization controller that supports multiple disk drive types. These often can also move all or some of a virtual drive, or LUN, between these internal tiers of storage

Adding an entirely new type of storage array presents a major challenge for IT. The initial purchase price is high, there is a capacity planning and product selection process to deal with, and administrators have to be trained in managing this new system. Then comes the process of migrating data from the existing tier to this new tier of storage. Most have found that the somewhat lower unit cost for capacity on low-end storage systems is offset by the added overhead involved in buying and managing these arrays. Since the price of a disk drive makes up little of the total cost of a storage solution based on even the least-expensive storage system, extra-array tiering often fails to deliver the expected savings.

Many enterprise storage vendors are also touting the ability of their larger storage systems to support multiple disk types at different price points. This intra-array tiering approach is made more enticing with the promise of automated storage tiering. But the effectiveness of intra-array tiering is limited by the high cost of the storage systems involved. Let us imagine that disk drives made up 40% of the purchase price of such a solution; a 50% savings on 50% of the disks would represent an overall savings of about 10%. And even this cost savings might be eaten up by the additional cache memory, controllers, licenses, and maintenance cost required to support more disks. The automated storage tiering software features often have high additional price tags as well!

In truth, neither extra-array nor intra-array tiered storage delivers much benefit even in the best of circumstances. In typical scenarios, tiered storage often results in no cost savings whatsoever.

Operational Cost

As we have seen, the falling cost of disk drive capacity fails to deliver the savings needed to support the ever-growing volume of data in businesses, since it makes up such a small part of the cost of an enterprise storage system. But storage costs as a component of IT budgets are not falling. In fact, storage costs are escalating relative to other IT disciplines.

The high cost of operating and managing enterprise storage systems tends to soak up any cost savings from less-expensive hardware. More data requires more equipment, more floor space, more electricity and cooling, more engineering, administration, and operational personnel, more backup issues, more compliance concerns, and more management oversight. In short, a given amount of storage requires the same operational expense regardless of the cost of the hardware it sits on.

Operational expense hits mid-sized businesses hardest. The smallest organizations rely on just one or two IT staff, so hardware cost is a major concern. The largest businesses have such a huge footprint of data that the cost of storage gear dwarfs their operational expense. But no matter the size of the business, simple changes to storage hardware infrastructure has failed to deliver any overall IT budget savings.

It is simply not enough to attack the hardware side of the equation with cheaper disk drives. Organizations must dramatically lower their aggregate storage infrastructure costs and the associated operational costs at the same time. The impact that managed storage services can have on this equation is tomorrow's topic for this series!

Read the original blog entry...

More Stories By Stephen Foskett

Stephen Foskett has provided vendor-independent end user consulting on storage topics for over 10 years. He has been a storage columnist and has authored numerous articles for industry publications. Stephen is a popular presenter at industry events and recently received Microsoft’s MVP award for contributions to the enterprise storage community. As the director of consulting for Nirvanix, Foskett provides strategic consulting to assist Fortune 500 companies in developing strategies for service-based tiered and cloud storage. He holds a bachelor of science in Society/Technology Studies, from Worcester Polytechnic Institute.

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