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Transcript of 1 © 2004 Cisco Systems, Inc. All rights reserved. OPT-4052 9628_05_2004.c The Business Case for...
1© 2004 Cisco Systems, Inc. All rights reserved.
OPT-40529628_05_2004.c
The Business Case for Storage Networks
Storage Strategies for Lowering TCO
222© 2004 Cisco Systems, Inc. All rights reserved.
OPT-40529628_05_2004.c1
The Cost of Poor Quality
• Most companies waste more than half their storage.
• Between 1999 and 2002, an estimated $35 billion of storage assets have gone unutilized.*
• Approximately one quarter of all annual computer-related U.S. revenues.
*Worldwide OEM Revenues 1999-2002
333© 2004 Cisco Systems, Inc. All rights reserved.
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Summary
• Falling disk prices = Increased TCO
• Create value with STORAGE STRATEGIES.
• In order to take advantage we must:
Understand the problem
Visualize the impact
Use metrics and know TCO components
• Cisco has implemented a STORAGE VISION to direct strategies for storage management with significant impact.
444© 2004 Cisco Systems, Inc. All rights reserved.
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Agenda
• Storage Strategies for Lowering TCODefinitions
Strategies
Measurement
Metrics
STORAGE STRATEGIES FOR LOWERING TCO
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777© 2004 Cisco Systems, Inc. All rights reserved.
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Definition—Total Cost of Ownership (TCO)
• The sum total of all costs associated with implementing a storage solution including acquisition and depreciation of raw storage, labor, support, maintenance, and so on over the lifetime of the solution.
• Provides for “apples-to-apples” comparisons of different solutions.
• Measures impact on environment and on bottom line—real world costs.
• Cash basis or depreciation?
Cash basis—Present value of all acquisition costs**
Depex—Matches budget structures
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Cash Versus Depreciation
• Year 1 labor costs = $0.1*(0.9^1)
• Year 2 labor costs = $0.1*(0.9^2)
**Cash Basis—Present Value of Future Costs at 10% Discount Rate
Cash Basis Year 0 Year 1 Year 2 Total
HW $ 1.00
Maint $ 0.20
Labor $ 0.10 $ 0.09 $ 0.08
Total $ 1.30 $ 0.09 $ 0.08 $1.47
Depex Year 0 Year 1 Year 2 Total
HW $ 0.33 $ 0.33 $ 0.33
Maint $ 0.20
Labor $ 0.10 $ 0.10 $ 0.10
Total $ 0.63 $ 0.43 $ 0.43 $1.50
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Storage Storage DemandDemand
Storage Resource ManagementStorage Resource Management
VirtualizationVirtualization FrameworkFramework
Information Lifecycle ManagementInformation Lifecycle Management
Data Integrity and ResiliencyData Integrity and Resiliency
Management and ConsolidationManagement and Consolidation
Storage Storage SupplySupply
Storage Storage ManagementManagement
Utility-Like Storage ServiceUtility-Like Storage Service• Service-Level ManagementService-Level Management• Appropriate Hardware TiersAppropriate Hardware Tiers
Storage Recovery ProgramStorage Recovery Program• Best Practices and ProcessesBest Practices and Processes• Special Tools and MetricsSpecial Tools and Metrics
Strategies
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Strategies
• Migration to storage networks
Increases allocation efficiency
Decreases management costs
• Storage consolidation
Fewer hosts and fewer frames
Reduce points of management
Reduce maintenance costs
• Storage recovery
Increases utilization efficiency
Reclaim unused storage
131313© 2004 Cisco Systems, Inc. All rights reserved.
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Measurement
• Data collection
Asset reports
Accounts payable
Storage inventory
SRM
Spreadsheets
• Need measurement of “before” picture
• Key values
Allocation efficiency
Utilization efficiency
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Utilization
Allocation Efficiency
60%
UtilizationEfficiency
40%
PRODPROD
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Allocation Efficiency
Storage TypeIndustry Average
Allocation Efficiency
DAS 30%–40%
SAN 50%–60%
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Measurement Example: (DAS)
• Sample DAS TCOSeven storage frames
7 x external RAID arrays (total 24,192 GB)
$350K purchase price
$2.45M total
One storage manager
$150K per year
Seven datacenter tiles
$10K per tile
$5K for cabling
$75K total
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Measurement DAS (Cont.)
• BackupsPer GB $0.086
Plus tape costs per GB $0.868
Total per GB $0.954
Total $63,698
• Maintenance$6K per frame per month
$42K per month
$504K total
• UtilizationAllocation efficiency factor (60%)
Utilization efficiency (40%)
181818© 2004 Cisco Systems, Inc. All rights reserved.
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Sample DAS TCOSample TCO Cash Basis Depex—Year 0
Seven Storage Frames7 x External RAID Arrays (Total 24,192 GB)$350K Purchase Price$1.75M Total 2,450,000.00$ 816,666.67$
One Storage Manager$150K per Year 398,160.00$ 150,000.00$
Seven Datacenter Tiles$10K per Tile 199,080.00$ 75,000.00$ $5K for Cabling
BackupsPer GB $0.086Plus Tape Costs per GB $0.868Total per GB $0.954Total 63,698.51$ 23,079.17$
Maintenance$6K per Frame per Month$42K per Month$504000K Total 1,337,817.60$ 504,000.00$
Utilization RatesAllocation Efficiency Factor (60%) 0.6Utilization Efficiency (40%) 0.4
Total Storage 24,192,000 24,192,000Utilization Efficiencies 5,806,080 5,806,080Total Cost 4,448,756.11$ 1,568,745.83$ TCO Per MB 0.77$ 0.27$
*Expenses not depreciated, but totaled over 3 years**Discount rate needed for present value—years 2 and 3 discounted at 12 precent
191919© 2004 Cisco Systems, Inc. All rights reserved.
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Measurement Example: SAN Migration Strategy
• Sample SAN TCOSeven storage frames
7 external RAID Arrays (36 GB drives)(total 24,192 GB)$350K purchase price$2.45M total
One storage manager$150K per year
$15K for training$165K total
Seven datacenter tiles
$10K per tile$5K for cabling$75K total
Maintenance$6K per frame $42K per month$504K total
Backups*Total $63,698.51
*Significant savings in backups possible—not analyzed here
202020© 2004 Cisco Systems, Inc. All rights reserved.
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*Assumes 15% Increase
Measurement SAN (Cont.)
• FC switches
$500K total including maintenance
• Utilization
Allocation efficiency factor (75%*)
Utilization efficiency (40%)
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Sample SAN TCOSample TCO Cash Basis
Seven Storage Frames7 x External RAID Arrays (Total 24,192 GB)$350K Purchase Price$2.45M Total $2,450,000 $816,667
One Storage Manager$150K per Year$15K for SAN Training$165K Total $437,976 $165,000
Facilities - Seven Tiles$10K per Tile$5K for Cabling$75K Total $199,080 $75,000
BackupsPer GB $0.086Plus Tape Costs per GB $0.868Total per GB $0.954Total $61,261 $23,079
Maintenance$6K per Frame per Month$42K per Month$504K Total $1,337,818 $504,000
Switches4 Director Class Switches (Inc. Maint.) $500,000 $166,667
Utilization RatesAllocation Efficiency Factor (75%) 0.75Utilization Efficiency (40%) 0.4
Total Storage 24,192,000 35,040,000Utilization Efficiencies 7,257,600 10,512,000Total Cost $4,986,134 $1,750,412TCO per MB $0.69 $0.17
Depex—Year 0
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Consolidation Impact
$0.07
Sample TCO Cash Basis Depex—Year 0Two Storage Frames2 x External RAID Arrays (42,048 GB)$750K Purchase Price$1.5M Total $1,500,000 $500,000
One Storage Manager$150K per Year$15K for Training$165K Total $437,976 $165,000
Facilities Three Tiles$10K per Tile 3$5K for Cabling$35K Total $92,904 $35,000
BackupsPer GB $0.086Plus Tape Costs per GB $0.868Total per GB $0.954Total $61,261 $23,079
MaintenanceNo Maintenance for 3 Years $0 $0
Switches4 x 32 Port Switches $500,000 $166,667
Utilization RatesAllocation Efficiency Factor (80%) 0.8Utilization Efficiency (40%) 0.4
Total Storage 42,048,000 42,048,000Utilization Efficiencies 13,455,360 13,455,360Total Cost $2,592,141 $889,746TCO per MB $0.19 $0.07
232323© 2004 Cisco Systems, Inc. All rights reserved.
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Recovery Impact
Sample TCO Cash Basis Depex—Year 0Two Storage Frames2 x External RAID Arrays (42,048 GB)$750K Purchase Price$1.5M Total $1,500,000 $500,000
One Storage Manager$150K per Year$15K for Training$165K Total $437,976 $165,000
Facilities Three Tiles$10K per Tile 3$5K for Cabling$35K Total $92,904 $35,000
BackupsPer GB $0.086Plus Tape Costs per GB $0.868Total per GB $0.954Total $61,261 $23,079
MaintenanceNo Maintenance for 3 Years $0 $0
Switches4 Direct Class Switches $500,000 $166,667
Utilization RatesAllocation Efficiency Factor (80%) 0.8Utilization Efficiency (60%) 0.6
Total Storage 42,048,000 42,048,000Utilization Efficiencies 20,183,040 20,183,040Total Cost $2,592,141 $889,746TCO per MB $0.04$0.13
242424© 2004 Cisco Systems, Inc. All rights reserved.
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Solution Cash Basis Depex
TCO per MB DAS $0.77 $0.27
TCO per MB SAN $0.69 $0.17
TCO per MB Consolidation $0.19 $0.07
TCO per MB Recovery $0.13 $0.04
Solution/Cost Comparison
Effect of Storage Program on TCO
$0.00
$0.10
$0.20
$0.30
$0.40
$0.50
$0.60
$0.70
$0.80
$0.90
TCO per MB DAS TCO per MB SAN TCO per MBConsolidation
TCO per MBRecovery
CashBasis
Depex
TC
O/M
B
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Metrics
• Project metrics
Payback method
ROI
NPV
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Metrics Examples: Payback
• Pros“Napkin math”
Suitable for small capital investments
Measures time to recoup investment
Payback period = initial investment/annual income
• ConsDoesn’t work well for large investments
Doesn’t work well for long time horizons (>1 year)
Example: $5000 for new disk infrastructure to increase performance for online transactional system that increases revenue by $2500 over two quarters.
Example: $5000 for new disk infrastructure to increase performance for online transactional system that increases revenue by $2500 over two quarters.
Payback period is one year $5000/$2500 = 4 Quarters = One YearReasonable payback—Do the upgrade
Payback period is one year $5000/$2500 = 4 Quarters = One YearReasonable payback—Do the upgrade
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Metrics Examples: ROI
• Pros“Napkin math”
Suitable for large capital investments
Well known
• ConsEasy to manipulate
Maligned as a marketing tool
Does not account for cost of capital
Does not account for time value of money
Example: $5000 for new disk infrastructure to increase performance for online transactional system that increases revenue by $2500 over two quarters.
Example: $5000 for new disk infrastructure to increase performance for online transactional system that increases revenue by $2500 over two quarters.
ROI = ($2500-$5000)/$5000 = -%50ROI = ($2500-$5000)/$5000 = -%50ROI is negative—Don’t do the upgradeROI is negative—Don’t do the upgrade
ROI = (All Returns-All Investments)/(All Investments)ROI = (All Returns-All Investments)/(All Investments)
292929© 2004 Cisco Systems, Inc. All rights reserved.
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Metrics Examples: NPV
• ProsAccurate measurement
Suitable for large capital investments
Accounts for cost of capital and time value of money
• ConsDefinitely not “napkin math”
Example: $5000 for new disk infrastructure to increase performance for online transactional system that increases revenue by $2500 over three years; cost of capital is 12%.
Example: $5000 for new disk infrastructure to increase performance for online transactional system that increases revenue by $2500 over three years; cost of capital is 12%.
NPV = -$5000 + (833.33*(1.12^1)) + (833.33*(1.12^2)) + (833.33*(1.12^3)) NPV = -$5000 + (833.33*(1.12^1)) + (833.33*(1.12^2)) + (833.33*(1.12^3)) Excel = NPV (Rate, Value1, Value2...) Excel = NPV (Rate, Value1, Value2...)
NPV = -$2998.47NPV is negative—Don’t do the upgrade
NPV = -$2998.47NPV is negative—Don’t do the upgrade
303030© 2004 Cisco Systems, Inc. All rights reserved.
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Summary
• DAS-to-SAN migrations: significant cost savers.
• Coupled with consolidation and storage recovery, programs greater reductions in TCO possible.
• Use FC and IP networks as enabling technologies for lower TCO.
• Use strategies to adjust storage TCO FUNCTION.
• Uptime and availability are part of TCO.
• Use FC and IP storage networks to increase business continuance, uptime, and availability; in turn, further decrease TCO.
• Play WHAT-IF scenarios with uptime, availability, backups, and retention.
313131© 2004 Cisco Systems, Inc. All rights reserved.
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Recommended Reading
• The Business Case for Storage Networks [1-58720-118-6] Available October 2004
• Cisco Storage Networking Architectures Poster [158720102X]
• Internetworking Technologies Handbook, Fourth Edition [1-58705-119-2]"
323232© 2004 Cisco Systems, Inc. All rights reserved.
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Online References
• Business Ready Datacenter http://www.cisco.com/go/datacenter
• Cisco Storage Networking Solutions http://business.cisco.com (click “Storage”)
• Search Storage http://www.searchstorage.com
• Byte and Switch http://www.byteandswitch.com
• Storage Networking World Online http://www.snwonline.com