CIOs and CFOs: Storage Management Alternatives Represent Great Potential For ROI; Storage No Longer a Sunk Cost of "Shopping for Disks"

Nucleus Research (NucleusResearch.com), the leading provider of bottom-line focused technology research, today announced the results of a benchmark study for CIOs and CFOs on the financial returns from effective storage management. New storage architectural alternatives and rapidly improving management software can provide bottom-line benefits, but these must be balanced against the need to reduce administrative costs and downtime issues, reduce storage capacity costs, and manage software management costs.

Benchmark Study: Storage Management

The survey is the latest in a series of benchmark studies that outline best practices for measuring ROI from specific enterprise technologies. The study is available for download, free of charge, at NucleusResearch.com.

"This isn't just about buying disk space and infrastructure anymore—from a financial point of view, storage should be managed to maximize return on investment," said Rebecca Wettemann, vice president of research for Nucleus Research. "CIOs should review their storage management strategy to ensure they're maximizing returns while managing storage costs."

The independent study was conducted over a timeframe of 6 months, and involved participants using storage solutions from EMC, IBM, and Compaq, among others. Participants were asked a series of questions, and discussed at length issues that determine effect on bottom line ROI, including deployment profiles, storage benefits, and storage costs. Respondents storage budgets averaged $2.3 million for an average of 115 TB of storage capacity.

Key ROI Drivers

Nucleus Research's analysis found that storage managers need to be cognizant of ROI drivers in three areas: administrative costs and uptime; storage utilization and capacity; and use of storage management software.

Administrative and Uptime Costs

Respondents had an average of 2.44 employees, each earning $92,643, managing their storage infrastructure. The Nucleus research showed that the average administrator manages 14 TB, 177 hosts and spends more than 25 hours per month tracking utilization and creating utilization reports. More intense storage performance monitoring and frequent utilization reports ultimately bring benefits, but need to be balanced against the associated high administrative costs.

Storage staffs are spending an average of 14 hours per month to troubleshoot storage problems, with most companies suffering from nearly 4 application crashes per year from storage. Many companies are moving to more resilient storage architectures, like a storage-attached network (SAN). Deploying storage management software within a SAN may help a data center improve uptime requirements. Companies should compare the cost of current downtime with the cost of upgrading storage resiliency.

Costs of Storage Capacity

Spending on storage capacity averaged $2.3 million, with the size of the deployment the key driver of total costs. Although companies' storage spending was also impacted by the per-gigabyte price of their storage acquisition, this wasn't a consistent measure: SAN networks with high uptime requirements, for example, cost significantly more than direct-attached storage boxes. In a seemingly counterintuitive measure, some companies invested in excess storage capacity in order to limit the amount of per-application utilization monitoring: the cost of excess capacity was actually less than the corresponding cost of administration would have been.

Chargeback systems have emerged as a solution to contain storage capacity costs. Companies are utilizing nearly two-thirds of their SAN (64.7 percent) and disk-attached storage (DAS), and most are attempting to reduce their spending on storage capacity, by implementing a chargeback system, consolidating to a SAN, or using storage management software. Nineteen percent have implemented a chargeback system, which is useful to discourage storage users from exaggerating project storage needs—without such a system, users tend to "pad" their requests for storage, which can eat capacity quickly.

Storage Management Software Costs

For companies that have invested in storage-attached networks (SANs)—especially those who have to monitor utilization rates and SLA requirements—storage management software boosts the per-terabyte abilities of the average administrator. However, most companies could not account for the expense of storage management software: it was rolled into a "black box" pricing as part of a larger, bundled contract. For those companies that could cite a licensing price, responses ranged from $14,000 to $120,000. Companies that asked software vendors to show software costs separately are able to more adequately conduct a cost-benefit analysis on savings in management costs.

About the Benchmark Study Series

Nucleus' Benchmark Study Series is focused on researching and evaluating the impact of leading technology categories. On an ongoing basis, Nucleus will publish reports on different technology areas to help end-users gain unbiased, credible research geared toward helping them make intelligent technology investments. The intent of the series is to allow CIOs, CFOs and "CFOs of IT" to compare their current and potential IT investments with the technology solutions from several vendors to determine the usefulness and ROI of a technology family as a whole, not just the offering from a single vendor from the category.

About Nucleus Research

Nucleus Research is an independent global research and advisory firm that provides CFOs and CIOs with the financial and technology insight they need to make clear, accurate assessments of the returns from their technology investment. The company is the first firm of its kind to blend financial analysis with comprehensive technology expertise to deliver 100% impartial return-on-investment (ROI) information to organizations worldwide. Nucleus Research uses an uncompromising set of processes and tools to evaluate the financial return on IT assets throughout a technology's life cycle, from selection and deployment to upgrade and retirement. Nucleus Research's ROI assessment methodology can be applied to virtually any technology investment.