With the introduction of storage area networks (SAN) in the second half of the 1990's data and storage consolidation has been a significant trend contributing to massive cost savings, improved processes and procedures and enhanced flexibility and responsiveness of data architectures.
But SAN's promise of providing a single logical pool of storage resources to all connected users was not fulfilled in its entirety and a world of SAN-lets developed that organizations are now trying to further consolidate using a variety of techniques ranging from storage virtualization to tiered storage.
Organizations continue to investigate the degree of consolidation that can be attained, the strategic fit of consolidation for varying workloads, the number of remote sites, heterogeneity of vendors, the number of technologies (e.g. SAN vs. NAS), backup strategies and the granularity of storage tiers, among others key decision points.
This How-to Note is written for storage managers, finance professionals and IT people interested in analyzing the need and strategic fit of storage consolidation for their organizations. The article is a practical guide to performing a storage analysis and is organized as follows:
- What is a storage consolidation analysis?
- How does a storage consolidation analysis process work?
- What is the impact of using a storage consolidation analysis plan?
- How to develop a storage consolidation analysis plan
What is a storage consolidation analysis?
A storage consolidation analysis or assessment is a detailed investigation of the potential costs and benefits associated with a storage consolidation. The outcome of an assessment is to determine the degree to which storage consolidation will impact infrastructure from both a financial and non-financial perspective. The storage consolidation assessment plan serves as a planning resource and can be used to communicate the business case to management, identify likely consolidation targets, establish metrics for success and guide the overall consolidation agenda.
How does a storage consolidation analysis process work?
Intrinsic mechanics
A storage consolidation assessment is an analysis that should be completed over a period of weeks or months, with ongoing and periodic improvements to the plan as warranted. Specifically, the assessment should be updated as the storage consolidation effort evolves from the analyze phase to each subsequent phase, including design, build, implement, operate and exit.
For clarity the assessment or analyze phase can be broken into five steps:
- Initial assessment - a first pass view of the current situation at an organization to describe the current infrastructure, the cost structure, applications supported and FTE resources assigned
- Analysis of the proposed solution or scenarios and the potential business impacts (described in more detail below) of implementing a storage consolidation
- The development of a report or presentation detailing findings, conclusions, assumptions and initial recommendation to stakeholders
- The refinement of the plan based on stakeholder feedback
- A final distribution of a report with agreed-upon recommendations
Tools and technology dependencies
Technology components in a storage consolidation analysis are typically confined to a variety of basic tools, including:
- Cost benefit analysis tools - typically delivered in a standardized format as required by financial departments
- Infrastructure assessment tools specific to storage consolidation - these may include vendor tools, in-house ROI tools, risk assessment frameworks, disaster planning checklists and other diagnostics useful to the analysis
- Project management and other collaborative tools
- Infrastructure and application 'agents' to identify and locate assets
Technology dependencies are typically uncomplicated and often fall back to in-house or user developed spreadsheets.
Skills dependencies
Key skills needed to perform a successful storage consolidation analysis include:
- Staff knowledgeable about storage infrastructure
- A finance professional to ensure financial best practice and adherence to organizational prerequisites
- An interface to and/or direct participation from application owners
- Vendor input or in-house expertise to estimate configuration and pricing of proposed solutions
Often, organizations will solicit assistance from outside consultants to perform assessments drawing on best practice industry expertise.
Organizational dependencies
As with most projects, a storage consolidation analysis should include champions empowered to marshal resources necessary to complete an assessment. Access to reasonably accurate financial/cost data, configuration data and proposed costs are compulsory. It is important to stress that the storage consolidation analysis is iterative and should be approached in a manner that provides an initial 'first pass' view that can be made more granular, more detailed and more accurate over time.
Key stakeholders including storage staff, enterprise architects, financial representatives and application owners should be providing input to the process in order to ensure its adoption and backing. An executive sponsor might include a Chief Technical Officer (CTO) at a larger organization or CIO in smaller settings.
What is the impact of developing and using a storage consolidation assessment plan?
A detailed assessment and analysis provides the foundation for executing a storage consolidation plan. It rationally injects facts into the decision process and provides a framework for infrastructure rationalization with input from key stakeholders including technology, finance and line of business business constituents.
A storage consolidation analysis also sets goals, defines target success metrics and provides a framework for measuring ongoing improvement.
How to develop a storage consolidation assessment plan
Planning
A storage consolidation analysis starts with a planning phase that involves:
- Establishing goals
- Sizing the work effort
- Drafting work plans
- Setting time scales
- Budgeting resources
Establishing goals
The main driver behind storage consolidations is often improving operational efficiencies, however other factors will often drive decision-making, such as improvements in service levels and increased business flexibility. Organizations often choose to be highly specific for example citing cost cutting targets (e.g. reduce storage operating expenses by 25% over a three year period). A primary goal of the plan is to determine the believability of goals, critical success factors, risk factors and the best path for hitting targets.
Sizing the effort
The scope and size of a storage consolidation analysis will generally depend on five key factors, including: 1) Size and diversity of infrastructure targeted for consolidation; 2) Diversity of applications and supporting locations; 3) Degree of decentralization (i.e. the number of locations being consolidated); 4) Complexity of environment (e.g. workloads, disaster tolerance strategy); 5) Desired level of depth and accuracy.
Drafting work plans
The main tasks individuals perform during a storage consolidation analysis include:
- An infrastructure assessment - to include the documentation of the applications and businesses being served by target infrastructure, the amount of storage, types of storage, number of servers, types of servers, replacement costs of the infrastructure, data protection approaches and other key elements discussed later in this article
- Target / proposed consolidation analysis - a description of the "to be" state that includes estimates of how the consolidated environment will appear to the organization (e.g. numbers of locations, servers, amount of storage, protection goals, etc.)
- A financial and strategic analysis of the organizational impacts that include current and projected total cost of ownership (TCO), growth projections and other analysis pertinent to developing a business case.
- Validation of technical and business assumptions
- Communication of preliminary analysis to stakeholders
- Final analysis and communication to stakeholders
Setting time frames
Generally, a credible first pass analysis can be achieved in an elapsed time of six to eight weeks. The following rough schedule can be used as a guideline:
- Week 1: Kickoff meeting with stakeholders
- Weeks 2-3: Initial data collection on current "as is" environment
- Weeks 3-4: Research and proposed target solution ("to be")
- Weeks 4-5: Gap analysis / capture missing data
- Weeks 5-6: Analyze business case and produce first pass report
- Weeks 6-7: Incorporate feedback and perform final assessment
- Weeks 7-8: Communicate findings, conclusions recommendations
Budgeting resources
Generally, a storage consolidation assessment can be constructed by a project lead and a team of a few individuals committed to the process. The team will likely consist of the following individuals:
- An executive sponsor with appropriate authority to mobilize resources
- A project manager to organize resources
- A lead consultant to serve as the key expert across the project
- One to two individuals with infrastructure expertise and general knowledge about application requirements to provide credible input to the process
- A finance or IT finance professional or business analyst to bless the financial projections and business drivers
- A line of business client to ensure business input is provided
In general a typical storage consolidation assessment will consume between 75 - 85 person hours to complete. An outside consultant will cost between $10,000 - $20,000 (plus direct out-of-pocket expenses) to complete a basic assessment and up to $50,000 for a more in depth analysis.
Preparing
This section details the activities related to preparing for the assessment. Main activities include:
- Choosing the lead
- Selecting the team
- Delegating authorities
- Negotiating work plans
- Delegating work
- Installing escalation channels
- Establishing performance incentives
- Releasing resources
Choosing the lead
The main activities managed by the team lead include setting goals, scheduling resources, quality control (to include capturing missing information and ensuring communicability of results), keeping the project on schedule and within scope, approving and communicating changes. The team lead will also participate directly in key team meetings and often present to decision making bodies.
Experienced project management capabilities are necessary along with a basic understanding of the organization, its overall organizational objectives, general infrastructure and application knowledge, an ability to write and good communications skills. Consultative capabilities are extremely useful, particularly to establish clear goals, identify and close information gaps, ensure quality analysis and communicate results.
Selecting the team
As indicated, a storage consolidation assessment can be accomplished by a relatively small core project team comprised of approximately three individuals with limited support from one to five other contributors, depending on the size and scope of the project. Organizations with large, geographically distributed portfolios will often require more supporting team members to provide details of IT infrastructure and application/business requirements.
The team will likely consist of the following individuals:
- An executive sponsor with a stake in enterprise infrastructure. Direct access to or participation on the leadership team
- A project lead to provide impetus, manage resource, establish timescales and govern the project
- One to two individuals with infrastructure expertise and general knowledge about application requirements - more for larger more geographically distributed organizations. A good rule-of-thumb is one infrastructure expert for each distributed location.
- A finance or IT finance professional or business analysts capable of constructing a business case
- A line of business client knowledgeable in business requirements for applications
Delegating authorities
Key actions for delegation include:
- An executive sponsor empowers the team and approves escalation processes
- A project lead delegates important functions to include: 1) data collection; 2) the construction of a proposed solution with rough costing; 3) data analysis and the preparation of the business case; 4) construction of the interim presentation; 5) construction of the final report to management.
- Project expert contributors may delegate information gathering tasks to include a list of existing inventory, replacement costs, capacities installed, protection strategies and FTE headcount supporting infrastructure.
Negotiating work plans and delegating work
As indicated, a typical storage consolidation assessment will consume between 75 - 85 person hours to complete. Work plans should be established along these milestones:
- Kickoff meeting:
- Meeting prep - Project lead 1/2 day + review with management: Identify stakeholders, set meeting agenda, prepare kickoff presentation
- Kickoff meeting - 1 - 1.5 hours for project lead, infrastructure manager, application manager, financial representative and line-of-business manager. Players should be prepared to briefly discuss infrastructure goals, challenges, current approach and application requirements
- Data collection begins:
- Series of one hour meetings with data collection person (analyst) and one to two individuals knowledgeable about infrastructure requirements. The key here is to engage the appropriate number of individuals necessary to develop a credible picture of the existing storage infrastructure, costs and service levels.
- Build consolidation design:
- One half day, infrastructure expert to construct basic consolidation design and cost structure (one-time and ongoing).
- Two hours to review the plan with technical and business stakeholders
- Business case constructed:
- Two days - analyst constructs business case / cost benefit analysis detail
- Business case presented to team:
- One to 1.5 hours to present business case to the team review assumptions and capture comments
- Final report written, delivered and presented:
- One half day to revise assumptions, incorporate feedback
- Two days to construct final report / presentation to management committee
- One hour to present analysis case to leadership team
- Ongoing measurement:
- One half day per quarter throughout the project to realign the plan based on design, build, implementation and operations feedback
Installing escalation channels
The main points of escalation in a storage consolidation assessment typically arise from lack of commitment to the process, lack of quality information and/or disputes over assumptions used to determine costs and benefits.
The following escalation levels can be used as guidelines:
- Level 0 - team members resolve issues with no need for escalation
- Level 1 - issues brought to team lead who constructs an adjudication process within the team
- Level 2 - team lead constructs adjudication plan using resources outside the team (e.g. internal experts or external consultants)
- Level 3 - team lead is unable to resolve conflict and escalates to executive sponsor
Establishing performance incentives
Performance incentives should align constituents but at the same time reflect the roles of the players. The executive sponsor and senior infrastructure managers should receive incentives related to achieving the financial and strategic goals of the consolidation. Direct project incentives should be constructed for the the team lead and the financial/business analyst constructing the case. These incentives should be tied to the project's timely delivery and quality of analysis as judged by the executive sponsor.
Management by objectives (MBO's) are appropriate for other team members with notation in performance reviews for participation and a 'black mark' for not supporting the project in earnest.
Releasing resources
Once the storage consolidation analysis project has been approved, an executive sponsor assigned, a team lead freed up and commitments secured from major participants, resources for project execution should be released.
Performing
This section discusses the performance aspects of a storage consolidation analysis.
Executing work plans
The following guidelines can be helpful in executing work plans:
- Preparing for kickoff meeting:
The project lead must prepare for the kickoff by setting the agenda, inviting in proper constituents, organizing meeting logistics and preparing the kickoff presentation. The kickoff presentation should introduce the team, describe roles and responsibilities, establish project goals and measurements for success, establish a process and time line, articulate escalation procedures and delegate actions. This presentation should be reviewed with the executive prior to the meeting.
Likely actions from the meeting include the creation and distribution of a set of questions for an infrastructure survey, the initiation of a proposed target solution with appropriate costing and the allocation of a resource (financial/business analyst) to construct the business case. A timeline and
- Kickoff meeting:
The kickoff meeting is a one to one and one half hour meeting between the project lead, infrastructure manager(s), application manager(s), financial representative and line-of-business manager. Players should be prepared to commit resources to the completion of the project and briefly discuss infrastructure goals, challenges, current approach and application requirements. The outcome of the kickoff meeting is an agreed-upon project plan, time line, escalation process and time for the next meeting.
- Collecting data:
Very soon after the kickoff meeting data collection should commence. Data collection can be performed in a series of one hour meetings with the data collection person (analyst) and one to two individuals knowledgeable about infrastructure requirements. The key here is to engage the appropriate number of individuals necessary to develop a credible picture of the existing storage infrastructure, costs and service levels. In general, data should be collected around groups or "suites" of applications with a person familiar with the infrastructure supporting targeted applications providing data. The outcome of these sessions should be enough information to construct an "as is" total cost of ownership model.
Data collected should at a minimum include:
- Numbers and types of servers and amount of storage attached
- Location and topology of servers and storage (distributed, collocated or consolidated)
- Estimates of storage utilization levels
- Levels of protection in place
- Backup approach
- Types of switching networks in place if any
- Types of applications supported (in broad terms)
- Rate of change of applications (high, medium, low)
- Service level requirements (high, medium, low)
- Number of FTE's supporting server and storage tasks
- Historical and expected growth
- Current constraints and problems with storage infrastructure
- Key software facilities in use (e.g. snapshots or remote mirrors)
- Building consolidation designs:
This step entails an infrastructure expert constructing a "to be" configuration based on rules-of-thumb and best practice experience. The configuration should provide a reasonable estimate of what the environment will look like after consolidation and the one-time and ongoing annual capital cost of the storage consolidation project. Vendors can often be helpful in constructing such scenarios.
This plan should be reviewed with other technical/configuration experts and business stakeholders to ensure functionality is being met.
Good rules-of-thumb for the configuration include:
- The target storage consolidation should provide response times equivalent to the existing environment
- The resources (server power and storage capacity) being consolidated and currently installed should approximate the consolidated environment. While fewer servers will likely be used and storage capacity freed up as a result of consolidation, the consolidated environment will use more expensive servers and typically more sophisticated storage and storage software.
- Constructing the business case:
A financial analysis should be included in a storage consolidation assessment, typically quantifying three high-level factors, including:
- One time and ongoing costs associated with a storage consolidation
- The degree to which storage consolidation will improve storage management efficiency (i.e. the number of full time equivalent (FTE) staff needed to manage storage
- The potential improvements in infrastructure utilization that can be achieved (i.e. storage and server utilization levels)
While these are not the only financial factors for consideration, they are typically the most dominant in terms of their business impact. Other financial factors including floor space and consumption of power and cooling resource are also often including in financial plans when analyzing storage consolidations.
Other practical considerations include impacts on network, backup and data protection costs.
Non-financial factors included in storage consolidation assessments typically include:
- The degree to which a storage consolidation impacts application availability
- The degree to which a storage consolidation allows infrastructure changes to better support application requirements.
The business case will be constructed by the analyst using inputs from the infrastructure survey and the design proposed for the consolidated environment. This is about a two-day effort and should be high level enough to be done expeditiously but detailed enough to be credible.
The three steps taken to construct the business case include:
1) Create a total cost of ownership model for the as is infrastructure assuming a 3, 4 or 5 year time horizon. Include all growth estimates in the calculations and project what the current installation will look like if no consolidation is accomplished.
Line items captured in the cost model may include:
- Hardware - storage and server
- Software - storage and server
- Switching/network
- Backup
- Other remote hardware and software
- Implementation and services
- Staffing (FTE's)
It is advisable when building the model to separate the one-time from the ongoing costs to account not only for project costs but ongoing management expenses.
2) Create a model to forecast the proposed consolidated infrastructure (forecast out for the same N years)
3) Create a “delta” business case from the differences between the two cases
Figure 1 is an example of a business case with the potential line items included.
Project summary These lines are the key metrics that have been mandated by the organization, or agreed by the sponsor and may include unique key performance indicators not listed (e.g. availability levels).
Project costs This section includes all the additional costs to implement storage consolidation. Included might be:-
- Additional costs of storage & server hardware & hardware maintenance
- Storage management software and maintenance costs
- Switch network costs
- Implementation services
- Loss on books from retired equipment and software
TCO Benefits This section includes the difference between the "as-is" costs of storage and storage administration and the proposed consolidated storage costs. In general this will be line items from the IT budget. Specific line items might include:
- Reduced cost of storage from improved utilization and deployment
- Reduced cost of storage and server administration
- Reduced cost of backup, copy and other storage services
- Reduced cost from improved server deployment
Business Benefits This section includes the additional business benefits or business costs of tiered storage. In general this will be line items from the business budget. Specific line items might include:
- Business Value of Availability (this includes the business benefits from improved productivity from improved availability, as well as the business benefits from any improvement in disaster recovery (RTO & RPO))
- Business Value of Performance (this includes the improved user productivity from better performance)
- Business Value of Flexibility (this includes the improved user productivity from quicker implementation of applications and changes to applications)
- Business Value of Security (this includes the expected decrease in loss from breaches of security)
- Business impact of delay on other projects includes any negative business effects of the project such as business disruption or lost productivity during the transition
Financial Analysis This section calculates the key financial metrics mandated by the organization or agreed by the sponsor. This section includes all the benefit line items, both IT and business. This is a full business case with the impacts on the business as a whole.
Financial analysis (TCO only) This section calculates the same financial metrics as above, but includes only the IT benefit line items. This business case is from the point of view of IT only.
Two additional items should be included in the business case:=
- A list of all the assumptions and sources of data
- A conclusion and recommendation from a financial perspective
This business case example is inclusive of all the line items that might be considered. On many occasions it will be necessary to negotiate what level of saving is put in the final business case. For example, an IT executive may want to include a conservative estimate of the benefits to IT to maximize chances of achieving those benefits.
Rules-of-thumb when constructing a storage consolidation business case
- Start by answering the question, "over what period of time will my infrastructure be completely refreshed?" This should set the time frame over which the business case will be constructed and the basis of comparison for a consolidated environment. It is important to remember the business case compares staying the course with an existing approach with changing to a consolidated environment. Make sure to compare the as-is case to the to-be assuming that each will go through an entire refresh cycle. Only in this way can one achieve an accurate comparison.
- Generally, consolidations yield better storage utilization, but that utilization improvement is realized over time, not immediately. On balance, hardware savings are typically offset by the need for more expensive software and switching infrastructure (in the case of storage networks).
- The majority of cost savings come from reduced administration costs. It typically takes less people to manage a consolidated infrastructure because management occurs from a single point of control
- Workloads will generally determine the strategic fit of storage area networks (SAN) versus network attached storage (NAS). If the workload is favorable, NAS will often be more cost-effective.
- In a distributed environment, administration costs (people) are typically as high as 66% of TCO
- In a consolidated installation, administration costs drop to as low as 15% of TCO
- Application availability typically improves when consolidations occur because processes and procedures are simplified and made common, reducing the chance of errors and improving overall infrastructure quality.
- A storage consolidation typically enables better infrastructure flexibility as available resources can be reallocated when needed (assuming appropriate provisioning functionality is used).
- Storage consolidations also enable more robust, affordable and higher quality business continuance strategies to be put in place.
Key risk impacts of developing a tiered storage business case The business case shown in figure 1 is a likely case scenario. In order to present a complete financial analysis some sort of risk analysis should be done. The degree of sophistication of this analysis will depend to a large extent on the size of the project, and the standards of the organization. At a minimum it should include a doesn’t work worst case scenario (e.g., fall back to current storage philosophy), a worst case scenario (increase the costs and decrease the benefits to a (say) 90% confidence level that they will be achieved), and a best case scenario (potential benefits is project exceeds expectations.
- Business case presented to team:
The business case should be presented to the team to solicit feedback and refine prior to the final presentation to the decision making body. This can be accomplished in a one to one and one half hour meeting to review assumptions and capture comments
- Final report written, delivered and presented:
Feedback from the team meeting should be incorporated into the process in less than one half day to revise assumptions and rerun data. An additional two days will be required to construct the final report / presentation to the management committee.
Monitoring progress
It is advisable to spend approximately one half day per quarter throughout the project to realign the plan based on design, build, implementation and operations feedback
Tracking resources
Team members should be advised to track their time so a post project evaluation can be performed. This will allow the accurate accounting for project costs and act as a feeder source for future analysis projects.
Scanning contingencies and solving problems
Contingencies should be considered constantly to include technology and price dislocations, market shifts and execution challenges. Some typical project-oriented hurdles follow with possible causes and advised contingency steps:
- Issue: Major changes in technology or pricing discredit fundamental assumptions. Cause: Original assumptions were flawed or team is not current. Action: Revisit assumptions and perhaps install more experienced team member.
- Issue: Market conditions change necessitating a change in strategy. Cause: Outside forces. Action: Place the project on hold and reevaluate.
- Issue: Infrastructure or application team is unable or unwilling to provide the necessary levels of detail and accuracy for the business case. Cause: Team does not have proper participation incentives in place or data collection team is inexperienced. Action: Adjust incentives, escalate or install more expert data collection staff.
- Issue: Disputes arise over the proposed configuration and cost detail for the target environment. Cause: Miscommunication about objectives, technical assumptions or business requirements or inexperienced professional building models. Action: Revisit assumptions and requirements, solicit vendor assistance, install new expert on the team.
- Issue: Disputes arise over the degree of likely benefits to be achieved. Cause: Political tensions (e.g. manager does not want to commit to level of benefits), dubious projections, lack of credible case examples. Actions: Negotiate targets within a range, obtain best practice metrics of likely achievement.
- Issue: Project falls behind schedule. Cause: Unrealistic expectations, other priorities, lack of credible data, lack of resource. Action: Reset expectations, escalate to determine priority, perform additional research to improve data sets, realign schedule and work plans, reevaluate incentive structure.
Paying incentives
Upon successful project completion, incentive targets should be reviewed expeditiously and performance incentives delivered where appropriate. This can be accomplished only with incentives related to project performance. Project result incentives will need to wait until enough experience is gathered in the customer base to audit results.
Promoting
The promoting phase involves testing and auditing results, transferring knowledge gained and distributing operational responsibilities.
Testing results
The ability to test or audit results is dependent upon: 1) the initial setting of clearly communicated goals that are measurable; 2) the commitment to measure and agree on results; 3) the expertise and credibility to measure results. Key measurements for a storage consolidation analysis include:
- The accuracy of the existing installation cost data on a relative scale (e.g. 1 to 10). Are the results deemed credible by finance? Are hidden costs exposed? Are chargebacks defensible? Can the systems used to track results be transferred to other projects?
- The perceived accuracy of the proposed consolidation costs-- are the estimates accurate within a degree of comfort defined by management?
- The time scale required to complete the project - was it reasonable? Was the project on schedule and on budget within acceptable levels determined by management?
- Potential business impact - does the proposed project demonstrate the financial and non-financial attributes that make it desirable? How desirable (e.g. what percentile relative to other projects)?
These attributes should evolve as the consolidation project evolves, specifically tracking the proposed costs and benefits over the life of the project and into post-implementation phase.
Transferring knowledge
Training a wider team on the process of analyzing the need for storage consolidation can be accomplished by:
- Documenting the process and results
- Communicating results in public
- Publishing the process and results for peer review
- Performing formal training
- Publishing a case study
- Making available artifacts used in the assessment (tools, templates, etc.).
Distributing operational responsibilities
Once completed and made procedure, the assessment process and results can be transferred to a day-to-day stakeholder to maintain and keep the analysis up-to-date. The recipient of the process should have appropriate incentives in place to maintain the analysis and extend its usefulness. Incentives may include job descriptions, MBO's or other incentives for ongoing improvement.
Parting
This section addresses exit strategies. It is important to note the useful life of an assessment can be many years and professionals should be encouraged to innovate and improve the process to extend its useful life.
Reconciling plans with actuals
Systems should be in place to track expectations with actual performance. Ideally, these are automated as part of the day-to-day metrics captured by an organization.
Finalizing incentive payments
The tracking of actual versus plan is the basis for paying incentives on performance-based objectives, as well as ongoing incentives that are in place.
Dissolving the effort
Dissolution should occur when the cost of maintaining the process exceeds its business value.