Calculating hidden cloud storage costs
Look out for these ancillary expenditures when you budget for cloud storage.
Computerworld - Cloud storage is priced like a utility. Over and over again, virtually all vendors repeat the same mantra: "Customers pay only for what they use." Pricing for public cloud storage ranges between 12 and 25 cents per gigabyte per month.
Yet the real savings in cloud storage may have more to do with all of the ancillary costs associated with companies storing their own data. "Lots of data centers are already starting to fold under the amount of data under management," notes Terri McClure, an analyst at Enterprise Strategy Group. "If you are out of space, power and cooling, it doesn't matter how cheap [storage] gets -- starting to offload data into the cloud is a better and cheaper alternative than building a [new] data center."
Marc Staimer, president of Dragon Slayer Consulting, a Beaverton, Ore.-based IT management consultancy, suggests that the best way to calculate the cost of storage is to take into consideration a laundry list of ancillary costs, including power and cooling expenses, annual licensing fees for storage software, and the cost of data center floor space and security. All of those expenses plus others add up to what he calls the "burdened storage cost."
"The conventional wisdom is overall storage costs per gigabyte are rapidly declining," Staimer noted in a 2008 report on a price/performance comparison of Nirvanix's cloud storage services and in-house storage. "In fact," he explained, "conventional wisdom is completely wrong. Overall, the burdened storage costs per gigabyte in most data centers are actually increasing or at best staying flat. This is because the hard disk drive acquisition cost is a very small part of the overall burdened storage costs."
Douglas Menefee, CIO at Schumacher Group, an emergency medicine management and staffing company based in Lafayette, La., says cost reduction is one of the primary reasons he continues to explore moving more and more terabytes of data to the cloud. "While storage costs have decreased for SANs, we can't compete with the buying power of the emerging cloud storage providers," he says.
"But cloud storage providers do need to simplify their pricing models," Menefee adds. "It can be dizzying to dissect the formulas they come up with for pricing."
Another thing to consider when weighing the potential cost savings of cloud storage is the age of your current storage gear.
"One reason many organizations can't make a wholesale jump to cloud is that they're still operating with legacy environments, many of which are still depreciating," notes Mark Tonsetic, program manager for the Corporate Executive Board's Infrastructure Executive Council.
Read more about Data Storage in Computerworld's Data Storage Topic Center.
- Data Warehouse Augmentation: The Queryable Data Store While organizations have, to date, been busy exploring and experimenting, they are now beginning to focus on using big data technologies to solve...
- Rebranded Quadmark revamps its IT solutions with Google Apps Switching to Google Apps halved Quadmark's IT admin costs while achieving 10% time savings per employee. The global consulting firm now spends 80%...
- CrashPlan PROe Security Because mobile laptops often are connected to unsecured networks, a very high standard of security is required to ensure privacy.
- Protecting Digitalized Assets in Healthcare Healthcare providers face an urgent, internal battle every day: security and compliance versus productivity and service. For most healthcare organizations, the fight is...
- Live Webcast LIVE EVENT: 5/7, The End of Data Protection As We Know It. Introducing a Next Generation Data Protection Architecture. Traditional backup is going away, but where does this leave end-users?
- LIVE EVENT: 5/7, The End of Data Protection As We Know It. Introducing a Next Generation Data Protection Architecture. Traditional backup is going away, but where does this leave end-users?
- Make or Break: New Auto Products Must Go To Market On Time This Webcast quantifies the value of time to market for the auto industry and highlights how Primavera Enterprise Portfolio Management can help organizations. All Data Storage White Papers | Webcasts