White

Paper

Changing the Way

You Purchase Storage

By Brian Babineau

August, 2010

This ESG White Paper was commissioned by NetApp

and is distributed under license from ESG.

© 2010, Enterprise Strategy Group, Inc. All Rights Reserved

 White Paper: Changing the Way You Purchase Storage 2

Contents
Executive Summary ...................................................................................................................................... 3
Time for a Change ......................................................................................................................................... 3
Reviewing the Capacity Perspective ......................................................................................................................... 3
New Business Demands............................................................................................................................................ 3
Operational Restrictions Expand .............................................................................................................................. 4
The “Cloud” Benchmark ........................................................................................................................................... 4
Innovations Enable a New Perspective ........................................................................................................ 5
More than Capacity .................................................................................................................................................. 5
New Storage Measurements .................................................................................................................................... 6
Making the Transition ................................................................................................................................... 6
Look to Solve Business Problems ............................................................................................................................. 6
Start with the RFP ..................................................................................................................................................... 7
Key Criteria to Consider ............................................................................................................................................ 7
The Bigger Truth ........................................................................................................................................... 8

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© 2010, Enterprise Strategy Group, Inc. All Rights Reserved.

 White Paper: Changing the Way You Purchase Storage 3

Executive Summary
“The more things change, the more they stay the same.”
This adage offers an accurate summary of how organizations currently purchase storage solutions. What is changing
are the drivers that impact IT decision making—executives want IT to reduce costs and improve responsiveness to
business requirements. From a technology perspective, there are always new storage innovations coming to
market—such as deduplication and thin provisioning—that promise to help companies deal with massive data
growth. What is staying the same is how IT executes a storage solution purchase. Despite evolving business drivers
and innovations, most organizations still procure storage the same way they did a decade ago: by focusing on
capacity requirements.
More often than not, organizations still buy storage solutions that deliver the most space for the least money. This
used to work when buying more capacity solved performance, data protection, and other IT challenges. It was also
feasible when IT did not face data center space constraints, restricted power budgets, and limited capital and
operating resources to fund purchases. These limitations are now a reality, but fortunately for storage buyers, there
are now solutions with capabilities that address these concerns and help improve responsiveness.
To actually take advantage of the innovations in storage, organizations need a new set of purchase criteria to
evaluate the various solutions in the marketplace. Throughout this paper, ESG will discuss these criteria and the
corresponding capabilities that will help organizations alter their storage buying perspectives from a capacity-
centric point of view to one that centers on solving real business challenges within any set of given limitations. ESG
will highlight the benefits—including building a more cost effective, operationally efficient and flexible storage
infrastructure—that organizations can achieve just by simply changing the way they buy storage.

Time for a Change

Reviewing the Capacity Perspective
Current storage purchasing processes tend to follow a similar pattern:
1. Estimate how much baseline capacity an application (or applications) will immediately need as well as
potential growth rates over a three to five year period.
2. Determine how much additional space to support other requirements—such as performance and data
protection—has to be added to the baseline capacity. Disk drives may need to be added to provide more
IOPS to an application. And companies have to determine how many copies of the primary application they
are going to need for data protection, test and development, and any other purposes.
3. Issue an RFP requesting specific configuration details including the types of disk drives (ATA, Fibre Channel,
etc.) that will make up that capacity and the front-end server connection (Fibre Channel, iSCSI, NFS, CIFS,
etc.).

New Business Demands

Simply buying more capacity is not always a viable alternative as senior business leaders ask IT departments to
reduce costs and still be responsive to their demands. These mandates are reflected in ESG’s 2010 IT spending
intentions research, where IT managers indicated the easiest way to justify an investment over 12-18 months was
by proving a reduction in operating costs and improving a business process (see Figure 1).
Where these directives intersect with storage purchasing starts with the operational costs—buying more capacity
means that IT has more systems to run and manage. With nearly 50% of enterprises currently using a hiring freeze
to control IT costs, organizations will need to scale existing resources to manage the additional capacity. 1

1
Source: ESG Research Report, 2010 IT Spending Intentions Survey, January 2010. All subsequent statistics come from this report.

© 2010, Enterprise Strategy Group, Inc. All Rights Reserved.

 White Paper: Changing the Way You Purchase Storage 4

Figure 1. Most Important Considerations in Justifying an IT Investment

Which of the following considerations do you believe will be most important in

justifying IT investments to your organization’s business management team over the
next 12-18 months? (Percent of respondents, N=515, three responses accepted)

Reduction in operational costs 54%

Business process improvement 42%

Improved security / risk management 36%

Return on investment / speed of payback 33%

Reduction in capital costs 30%

Improved regulatory compliance 23%

Reduced time-to-market for our products or services 10%

0% 10% 20% 30% 40% 50% 60%

Source: Enterprise Strategy Group, 2010.

The other issue that arises is the ability to provision and protect capacity. This speaks to the agility IT departments
must strive for. If the business needs a new application, storage provisioning and setting up data protection
policies should be able to be swiftly completed—a difficult task as more and more storage capacity is deployed.

Operational Restrictions Expand

Budget is potentially the biggest limitation when it comes to purchasing storage. However, the capacity approach to
buying storage also introduces other restrictions such as available data center space and energy; some
organizations do not have the space to add more storage systems. This concern frequently occurs when companies
store data at a remote office or use a second location to house a disaster recovery target system. These facilities
are rarely built to accommodate large scale IT infrastructure and, if companies keep adding storage capacity, there
may be a point where the systems simply no longer fit.
Increasing storage system densities may offset some of the data center space limitation, but it introduces an energy
problem. Denser devices need more power to run and be cooled. If the energy is not available, companies may be
forced to spread their capacity to smaller systems. This adds more burden to IT staffs as there are now more
systems to manage.

The “Cloud” Benchmark

A few years back, if IT departments could not meet business requirements, senior leaders did not have much
leverage. Companies could “outsource” their entire IT operation, but many feared that relinquishing control would
introduce security and other operational risks. The situation has dramatically changed now that organizations can
leverage cloud computing strategies for different systems if IT cannot meet specific cost targets or if they are too
slow to respond to requests.
The promise of cloud computing is more predictable, usage-based pricing with resources being immediately
available. Whether this promise is a reality is still to be determined; however, the cloud appears to be delivering

© 2010, Enterprise Strategy Group, Inc. All Rights Reserved.

 White Paper: Changing the Way You Purchase Storage 5

value in other ways. From ESG’s perspective, the cloud actually provides IT with a benchmark to measure itself in
terms of cost and responsiveness. IT is responding by investing in server virtualization initiatives which consolidate
physical devices and facilitate rapid provisioning of new servers. Desktop virtualization projects are being rolled out
to reduce help desk costs and allow organizations to “on-board” new employees quicker.
Storage infrastructure is a critical component of many of these new projects because, depending on the solution, it
can add or reduce costs. In some cases, IT may have a “chargeback” for storage explicitly, but it is factored into
metrics such as “cost per desktop” or “cost per mailbox.” Also, the storage infrastructure is an integral part of
keeping an application service up and running—it is where backup and disaster recovery operations are executed.
The objective is for IT departments to complete these operations without impact to the business as success is
achieved when “nothing bad” happens to the primary environment. Most importantly, the entire storage
environment has to be relatively easy to manage because any delays or complications directly impact how quickly
new services can be provisioned.

Innovations Enable a New Perspective

More than Capacity
Thanks to an extremely competitive industry, storage solution innovations are continuously, and rapidly, entering
the marketplace. The first set of capabilities helps organizations manage and control capacity. They include:
• Data deduplication. By only storing a byte of unique data once and using reference pointers to any
redundant bytes an application attempts to save, data deduplication drastically cuts down on the amount
of capacity a company needs to support a particular environment. This is critical in virtualized server and
desktop environments where there is a significant amount of redundant data due to common configuration
and application files.
• Thin provisioning. Many times, application owners request a large amount of storage because they think
they will need space to grow. Rather than arguing about how much space is really needed, administrators
can allocate capacity to a virtual or physical server without actually reserving it within the system. This
minimizes wasted storage resources while keeping application owners happy.
• Space efficient copies. No matter how a company uses its copies—backup, test and development, etc.—it
is more cost effective when these copies do not take up as much space as the primary data set. Of course,
this only works if those copies are useful, meaning they can be “written to” or used by another application.
Additionally, emerging features make it easier for IT to cost effectively build a shared infrastructure—the ideal
environment for companies to achieve some cloud-like characteristics. Some of these are:
• Multi-tenant support. When deploying a shared infrastructure, IT is likely to run several different
applications to gain the economies of scale. A storage system will need to allocate resources based on
need, delivering Quality of Service (QoS) capabilities to optimize priority workloads. It is also imperative
that the system offer multi-tenant security by separating the physical device into separate, smaller
containers that are only accessible to certain networks and servers. This creates the security experience of
several dedicated infrastructures without having to deploy independent systems.
• Flash-based storage technology. In a shared infrastructure, there are going to be applications that need
fast response times and others that run fine with more standard measurements. Rather than trying to buy
and move disk drives around to figure out where the performance needs will be the greatest, companies
can use flash technology to achieve a performance boost. Flash can be deployed as an extension of the
solution’s existing cache or as a solid state disk drive. The actual hardware is not as important as the
software which enables administrators to determine how it is used (i.e., what data should be stored on it
and for how long).

© 2010, Enterprise Strategy Group, Inc. All Rights Reserved.

 White Paper: Changing the Way You Purchase Storage 6

• Comprehensive data protection. Similar to the performance conundrum, not all applications need the
same level of data protection. Certain applications may be so critical that companies will lose money if they
are unavailable while others can sustain some downtime before experiencing a negative business impact.
Storage solutions now have capabilities to create several snapshots in a given day, execute replication
activities extremely fast because only the data that has changed is copied, and be clustered together in a
highly available environment. More importantly, storage solutions integrate with applications so that any
local or remote copies are created in a “consistent” state so they can actually be recovered if necessary.

New Storage Measurements

The storage innovations referenced above should alter the way organizations measure their initial storage
purchases through ongoing operations. The most noticeable change should occur with data deduplication. This
capability renders the traditional dollars per gigabyte metric obsolete as companies may be able to store ten
terabytes of data within a five terabyte system. At a minimum, organizations should consider the effective dollars
per gigabyte measurement, taking into account a data reduction ratio.
Some IT departments measure storage utilization based on how much capacity is allocated to applications
compared to what was initially purchased. Right now, ESG research suggests that most organizations allocate
between 50% and 60% of purchased capacity. How much of this capacity is actually used is a different, usually much
lower, measurement. With thin provisioning, it is now possible to allocate more capacity than what is in the
system. At a minimum, ESG recommends that companies at least alter their targets and strive for over 100%
allocated to increase utilization and minimize waste.
From a performance perspective, flash technology removes the need to think about IOPS per disk drive. Companies
can usually get more than enough IOPS by introducing flash and carefully allocating this space to the right
applications via quality of service management tools.
The number of FTEs (full time equivalents) needed to manage raw capacity is still a good metric, but it is what these
FTEs can do that is now more important. Provisioning times are critical as storage will be a key component in how
quickly IT can respond to and fulfill service requests. Similar measurements are useful when tracking data recovery
operations. IT should be measured on how quickly they can restore an application or file as this is what is
important to the business.

Making the Transition

Look to Solve Business Problems
Eighty-five percent of organizations surveyed by ESG at the beginning of 2010 planned to spend the same or more
on storage hardware when compared to 2009 (see Figure 2). It is imperative these budgets are allocated to the
right hardware (or, in some cases software) solutions so companies can maximize the return on investment. With
so many of these capabilities now available, storage buyers may miss out if they still purchase storage from a
capacity perspective because the focus will be on how much can be bought for a specific price. A much better way
to buy storage is to start with the business problem that needs to be solved. It does not matter if IT is trying to
lower the cost per virtualized desktop or get a product to market faster by reducing test and development times. By
documenting what needs to be accomplished, organizations will seek out and place value on the storage
capabilities that help address these issues.

© 2010, Enterprise Strategy Group, Inc. All Rights Reserved.

 White Paper: Changing the Way You Purchase Storage 7

Figure 2. Storage Hardware Spending Changes, 2009 vs. 2010

To the best of your knowledge, to what extent will your organization’s

2010 IT spending for storage hardware change relative to 2009?
(Percent of respondents, N=286)

Decrease, 15%

Increase, 54%

Stay flat, 31%

Source: Enterprise Strategy Group, 2010.

In addition to focusing on the business problem, organizations should also consider the constraints they must
operate within to address this challenge. Some may have large capacity requirements, but do not have the
resources to manage them all, while others may be trying to hit a specific “cost per mailbox” target for their
Exchange environment. Considering the operational parameters will encourage companies to look for unique
storage solution features and capabilities to address the business problem at hand.

Start with the RFP

Creating an RFP is usually the first step in the buying process. It is an ideal place to shift from a capacity to a
business solution perspective. Rather than stating “We need 10 TB of capacity,” companies can say “We are
building a shared infrastructure to support several SharePoint sites.” Taking it a step further, companies may then
want to include the parameters for the SharePoint project, including availability requirements (i.e., what are the
downtime and data loss thresholds?) and expected number of users which will help determine optimal
performance needs. Expected capacity requirements should be included in the RFP as a guideline, not a focal point.
By issuing an RFP that details the business problem as referenced above, IT is inviting vendors to offer solutions that
should include many of the innovations that will solve problems while reducing costs and increasing agility.
Companies can then evaluate the ideas, solutions, and proposed architectures based on the value that they
deliver—an exercise that will lead to far greater benefits in terms of cost savings and operational efficiency than
simply selecting an alternative that offers the most capacity for the lowest price.

Key Criteria to Consider

When organizations start buying storage from a business problem perspective, they should make a concerted effort
to avoid making each purchase so unique that the solution only addresses a specific challenge. Having a separate
system for every problem precludes any economies of scale that a shared infrastructure could provide. As a result,
ESG believes that companies should establish a set of common criteria that becomes a standard part of storage
solution RFPs so that IT has the flexibility to build and efficiently run a shared infrastructure. Some suggestions are:
• Unified architecture. Flexibility in shared infrastructure is critical as IT may want to add an application that
is optimized for NFS storage connectivity. If the shared infrastructure only supports Fibre Channel, such an
action will require a new system. IT should not have to worry about these issues or get caught off guard

© 2010, Enterprise Strategy Group, Inc. All Rights Reserved.

 White Paper: Changing the Way You Purchase Storage 8

because they cannot leverage an existing solution. Having a solution that supports multiple protocols
provides a strong, flexible foundational element to any shared infrastructure.
• Broad application integration. ESG highlighted why this level of technology support is critical from a data
protection perspective; the real value comes in how many applications a solution can support. IT cannot
afford to deploy several systems each optimized for a specific application.
• Storage service delivery. If IT is going to compete with the agility of cloud providers, it will need the tools
to do so. When evaluating storage systems, companies should inquire as to the types of management
software available to automate provisioning tasks, monitor resource utilization, and schedule data
protection tasks. This software makes it easy for storage management to scale as capacities within a
shared infrastructure increase.
• High availability. This criterion is far too often taken for granted. Systems and their components fail—it is
a part of the technology lifecycle. In a shared infrastructure, storage solutions should have configuration
options that create highly available implementations and functions that automate system failover and
failback operations. At a minimum, organizations should ask in an RFP how a solution not only delivers, but
also automates, high availability.
• Scalability. For a storage solution to properly underpin a shared storage infrastructure, it has to support
multiple application workloads. Having a unified architecture (referenced above), the option to use flash
technology and lower cost disk drives, and management software to optimize system resources allows a
solution to cost effectively meet a variety of workload demands as data across all of the applications
continues to grow. QoS helps IT optimize all of these resources across the workloads. Aside from
performance, systems must be able to scale in terms of capacity. As data growth continues, organizations
do not want to “run out of room” within a shared infrastructure environment as this can disrupt availability
and create unnecessary operational burdens.
• Feature consistency. A derivative of the unified architecture is the ability to support many of the
capabilities (deduplication, thin provisioning, multi-tenancy, data protection, etc.) referenced earlier in this
paper. As recommended, it is important to seek out solutions that have these capabilities; it is just as
important to make sure they can be used regardless of the size of the system and the server connection
protocol in use. Companies should have the option of using these capabilities as they deem necessary
rather than buying individual systems that only support one or two functions.

The Bigger Truth

The ultimate objective of changing the way you buy storage is to leverage more innovations to efficiently and
successfully address business challenges. The efficiencies come from buying only the capacity that is needed and
automating storage management tasks from provisioning space through optimizing application response times.
Success occurs when IT can quickly respond to business requirements and exceed service levels while operating
within any number of constraints, such as a hiring freeze or an energy budget, that cannot be immediately resolved.
Ultimately, when it comes to storage technology and purchasing, the better mantra to live by is “the more things
change, the more they shouldn’t stay the same!”

© 2010, Enterprise Strategy Group, Inc. All Rights Reserved.

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