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Computerworld - Many organizations are struggling with escalating demands for storage and better disaster recovery - while plodding through a tough economic climate with frozen budgets and overworked staffs.

These organizations realize that saving money on storage is nearly impossible without costly investments in networked storage technologies. Unfortunately, storage networking isn't cheap and doesn't offer a quick fix to immediately reduce storage costs.

So the paradox of storage is that you have to spend money to save money. What's an organization to do?

Industry analysts, consultants, storage suppliers and IT organizations say that reducing storage costs is a step-by-step process that begins with diligent and ongoing planning. Here are the five key steps:

1 Plan to Consolidate The first step is to apply "data center discipline" to storage outside the data center. It's critical to consolidate storage across all platforms to reduce management and maintenance costs.

Having, say, seven servers with direct-attached storage is far less efficient than having a storage-area network (SAN) that acts as a pool of storage for various servers to use. For one thing, a single pool of storage is cheaper to manage than separate, direct-attached storage systems. Also, when storage is shared across a SAN, there's no need to maintain large amounts of excess capacity (for mirroring or backup purposes) for each server.

For example, Ahold USA, part of the Royal Ahold Group in Zandam, Netherlands, migrated from direct-attached storage to an IBM SAN infrastructure that has reduced management costs from $1,300 per gigabyte to about $200 per gigabyte.

Royal Ahold is a rapidly growing international food provider with supermarket operations in the U.S., Europe, Latin America and Asia. It has more than 7,000 supermarkets and specialty stores and annual sales approaching $50 billion. The result is a deluge of data. Ahold's combination of inventory records, daily sales figures, customer buying patterns, sales trends, employee data and financial reports have pushed its data volume up by 30TB in the past 36 months, to 62TB of storage.

With that kind of mushrooming storage demand, Chris Collins, manager of enterprise architecture, realized Ahold needed to investigate networked storage to reduce not only administrative costs, but also the company's dependence on mirrored storage. One data warehouse, for example, took 4TB plus an additional 4TB of mirrored storage in the direct-access storage environment. "We made a hard choice moving to IBM's Shark, to go with RAID V architecture. The database administrators fought this change," she says.

But now, instead of needing 8TB for a 4TB data warehouse, the entire system uses just over 4TB - a huge capacity savings over the previous storage environment.

During the past three years, Ahold has also consolidated its hardware environment to Windows 2000 on Intel-based servers, AIX and S/390, and has decided to stick with one supplier for disk storage - all to reduce costs and management headaches.

Ahold's latest move from the IBM F Model Shark series to the new Model 800 Sharks has doubled capacity from 3.5TB to 6TB and tripled the number of disks per SAN subsystem. Collins says that means savings of $1,100 per gigabyte over the former direct-access storage model.

Next up: Planning for storage virtualization. "It's an incredible concept, offering great price/performance potential, but it's still scary," Collins says.

So Ahold will start testing virtualized storage subsystems sometime next year and then roll them out slowly during the next two years.

2 Connect Modular Subsystems One advantage of storage networking is that you can plug in storage capacity in a modular fashion whenever the business demands it - and help avoid downtime due to occasional storage shortages.

Moving to networked storage environments that incorporate modularity makes it far easier to maintain and allocate storage as required by business needs, and will definitely reduce costs, according to Jim Porter, president of Disk/Trend Inc. in Mountain View, Calif. While "going modular" primarily reduces the cost of downtime, it also reduces regular daily operational costs - it takes far more resources to maintain several direct-access storage devices than it does to maintain a SAN.

Los Angeles-based Paul, Hastings, Janofsky & Walker LLP, a global law firm, was running into a storage crisis every few months with its direct-attached storage. Now it's implementing an 18TB storage infrastructure from Hopkinton, Mass.-based EMC Corp. to meet the demands of critical applications, including monthly billing, documentation, accounting, e-mail and other enterprisewide software.

The law firm needed to save money and more efficiently manage storage resources because the cost of direct-attached storage for more than 100 file servers was becoming untenable. "Maintenance and miscellaneous costs for the Los Angeles office alone exceeded $400,000 annually," says Stova Wong, director of networks and telecommunications.

Wong evaluated offerings from IBM, Hewlett-Packard Co. and EMC. He chose EMC because of its experience with the legal profession in Los Angeles. This past spring, the firm began installing EMC Symmetrix and Clariion SANs using Fibre Channel switches to provide consolidated storage.

The law firm is also implementing networked-attached storage (NAS) for image-based documents and other visual materials that support litigation. And EMC management software will centrally manage the entire SAN and NAS infrastructure.

The networked storage environment is still being rolled out, but it has already improved the accuracy and efficiency of billing processes, reducing the time to complete month-end processing from six hours to one. "That translates to lower accounting costs because we no longer must pay the accountant to wait for six hours while billing reports are processed," says Wong.

Most of the savings have come from reducing administrative overhead and production downtime, he says. Previously, the law firm experienced storage shortages every few months, which meant systems had to be taken down. That situation has been eliminated in the networked storage infrastructure.

3 Manage Storage Ruthlessly "Hold users accountable" for the storage they use, says Chuck Hollis, vice president of markets and products at EMC. "You must know how much storage capacity you have - enterprisewide -and what it's being used for."

Amazingly, many organizations don't have a handle on their storage utilization levels - except in mainframe environments, where very little capacity is wasted. But industry estimates suggest that 30% of storage capacity in Unix environments is wasted. And that figure goes as high as 70% in Windows environments.

Hollis often tells customers "you are still wasting up to two-thirds of your current storage capacity and can improve utilization and cut costs by an average of one-third by consolidating on networked storage and managing storage ruthlessly."

This really means keeping tabs on what's being stored. "When storage is presented as free and infinite, everyone will use all of it up," Hollis says. But IT organizations must be able to scrutinize "the business benefits of those 2TB of MP3 files on a Windows server," he says, if they want to control utilization costs.

4 Search for Interoperability Modularity gives IT organizations a giant step forward in reducing storage management costs, but interoperability is considered the Holy Grail, enabling customers to pick and choose from multiple network storage devices to keep costs down. "For the most part, however, this is still largely a pipe dream," says Disk/Trend's Porter.

Storage suppliers are moving very slowly toward making their networked storage devices open and interoperable. And working with interoperable storage takes special fortitude for managing multiple storage vendors.

5 Bring on New Technology If reducing storage costs is a step-by-step process, adding new technology is really the final step. There are plenty of new technologies - virtualization, iSCSI, storage on demand - with proponents claiming each one will reduce long-term storage costs, says Dan Tanner, an analyst at IDC in Framingham, Mass.

But the key is to do your homework: Proper planning, standardization and consolidation are critical. Migrating to modular, interoperable storage devices is a next logical step. And controlling storage growth by ensuring that users understand that storage isn't a free, infinite resource, is also important.

Ultimately, IT professionals say they understand there's no quick or easy solution. Ed Moore, IT director at CDNow Inc., a New York-based Internet retailer of CDs, videos and DVDs, says he has yet to actually reduce storage costs via recent investments in EMC SAN technology. But he says it's best to focus on cost avoidance. "That means incorporating new technology to avoid spending additional amounts managing outdated storage subsystems in the future," he explains.

DePompa is a writer and editor in Germantown, Md. Contact her at bdepompa@aol.com.