Originating Author: John McArthur

Data center managers and CIOs may not be well positioned to report on the difference between cheap and cost-effective IT acquisitions. Acquisition cost represents only a fraction of the total cost of ownership for any technology. Often, CIOs are only directly responsible and directly impacted by a portion of the factors that determine operational cost.

Steve Sicola, CTO of Xiotech and the June 29, 2010 Peer Incite participants discussed a variety of factors that should be considered when choosing between suppliers and technologies. In the case of storage, and depending upon the workload, factors could include:

• $ per GB,
• $ per I/O,
• $ per GB/second,
• Expected utilization rate,
• Effective utilization rate,
• Power requirements,
• Cooling requirements,
• Floorspace requirements,
• The useful life of the storage system,
• The warranty period,
• Maintenance cost after warranty,
• Management cost,
• Software license cost.

Buyers should also add to that the impact to the business, if service levels can not be maintained. Even when data is protected with hardware or software RAID, performance may decline during a RAID rebuild process. Technologies that can avoid or minimize the performance impact of a RAID rebuild may be considered more valuable. Routine maintenance can also impact availability. Storage systems that offer non-disruptive software upgrades may be more valuable than those that do not.

Unfortunately, factors that should be included in the list of considerations cross budget lines. For example, the business unit may fail to meet revenue goals due to IT's failure to meet service levels, but the IT department may have no financial incentive to meet those service levels. Power and cooling may be the budget responsibility of the facilities manager and not a consideration for IT. IT may not even be concerned with power at all, at least until the facility reaches its maximum power load. Data management and data protection capabilities can be delivered in a variety of ways: in the storage system, in the operating system, or in the application. In larger organizations, software license expense may be charged against different cost centers, depending upon whether the software is licensed to a storage controller, a function of the operating system, or a feature of an application.

IT organizations that have accountability without authority or authority without accountability are significantly limited in their ability to effectively control the total operational cost of IT investments. Often reporting must be at the level of the CFO to gain a complete, consolidated and accurate view of cost.

Action Item: Organizations should establish measurement systems to report total operational costs associated with IT investments. Cost and benefit estimates need to cross organizational boundaries, and reporting needs to be elevated to a sufficiently high level to ensure that budget boundaries don't lead to poor IT investment decisions. Often, that total accountability will only be reached at the level of the CFO.

Footnotes: