When Good Enough is Not Enough Part II

Monday, May 18, 2015

In part one, we discussed why charging a flat rate (in this case, $3,200 per gigabyte) is not an accurate reflection of the actual costs associated with managing storage, and how the manual tracking of actual costs is price-prohibitive.

The screen capture of an APTARE chargeback report below provides an illustrative example of the problem facing IT organizations. In this case, there is a high variance between the amount of backup volume and storage that are being used by host. This is exactly what the insurance company and APTARE customer found once a proof of concept (POC) project allowed them to discover the data on a host-by-host basis.
Chargeback Report

The advantage to the company of using the APTARE solution is a huge improvement in accuracy and efficiency in getting the right chargeback amounts tied to the right departments or business units. In this example, the company is going to save hundreds of thousands of dollars per year by replacing IT professional’s time manually collecting the chargeback data and developing analytics on that data. The savings come from automating both the data collection process and using the more accurate data to develop custom reports like the example below that can be pushed to the right people in the IT organization at the right time.

The insurance company that worked with APTARE to develop the new solution is now able to easily collect and analyze usage data by host for multiple items: backup volume, tape volume, switch ports, tier1 storage (blended tier treatment in this example), vCPU, vMemory, VMDK, Oracle and SQL database volume. By providing this level of granularity, companies can greatly increase the accuracy of their chargeback solution.
When you evaluate the benefit and the ROI of a host-level data collection process that automates all of the collection and analytics, it’s important to put the overall environment into perspective. Two factors become important when evaluating the economics:
  • First, the projected growth rates of data are currently 30-50 percent per year in most enterprises, which means that most data center environments will double in two to three years.
  • Second, the actual storage growth that is created by this data growth has a multiplier impact of 2.5x (i.e. for every 1 TB of data produced, you end up needing 2.5 TB of storage because of all the copies that must be produced, stored, and secured due to regulatory and/or internal IT requirements).
Being able to produce the type of chargeback data shown in the example below in an automated fashion and that integrates with the billing application can save most enterprise IT organizations hundreds of thousands of dollars per year. When you factor in storage growth of 2-3x in three to five years the savings grow quickly because the automated solution scales at little to no incremental cost regardless of the environment size. The manual solution, on the other hand, requires more time and people as the environment grows. For many large enterprises, managing 50 PB is already a reality and they fully expect that in several years this number will grow to 100-150 PB if nothing changes. In addition, remember that for many enterprises the combination of data growth with a storage multiplier is actually accelerating the storage growth of their environment so it could easily be more than 150 PB based on even a small rise in either rate.

This is only one example. Other APTARE customers are in a similar situation to the insurance company profiled in this post. The first challenge with chargeback is often political: simply getting the business units to agree to it. Once that hurdle is passed, the next challenge is to figure out how to begin the chargeback process. As mentioned, a flat per gigabyte charge is a common result because it is straightforward and easy to implement. However, as we showed, the cost of managing each gigabyte can fluxuate wildly and more granular information is needed. This then creates the third problem, which is how you deliver the level of insight into actual storage costs without spending hundreds of thousands in FTE on manual data collection and analytics activities.

This is where a solution like integrated chargeback can provide a significant benefit.

Did you read Part I?

APTARE—the global leader in IT Analytics—is the only company delivering unified backup and storage insights for heterogeneous IT environments across on-prem and hybrid-cloud