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Internal Costs Per Gigabyte — What Do You Pay?
CodePwned writes "I recently took over a position at a rather large company where I discovered my group was paying $30 per gigabyte per month! That's $360 per year per gigabyte to our own IT department. While I understand costs are different depending on the scale, redundancy, backup and support methods, there doesn't seem to be any good papers on what range you should expect your costs to be. So far, my research shows an average of $1 per gigabyte or less for internally hosted space. What do you pay?"
Bandwidth? Storage? Backup? Downloads from a particular site? What the hell are we talking about here?
I suppose it all depends on what, and how, you're measuring. Is that money spent on backup tapes, raid systems, flash drives, or what? Is that for offline storage, frame-relay throughput, ISP bandwidth. Does IP telephony get rolled up in that? The question seems a little vague to me.
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I think the OP is talking about total cost of ownership here, not purchase price. TCO is all-inclusive, covering network bandwidth to make use of the space, backup and redundancy, paying someone to keep it running, electricity to keep it spinning, a share of a fileserver box to put it in, etc, etc.
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"Depends" is your answer. Though I'm assuming you're talking about disk, not tape nor VTL. Do you buy direct from the manufacturer or through a channel? How big is your company? What's the total installed base so far? General Electric pays much less per GB than some midsize company with 100TB.
Do you mean for SATA disk in a tier2 array or SSD in a tier1 array?
Costs go up when you include snapshots and replication.
Do the editors even ask the submitter to be more specific?
My boss does.
No monthly cost? How is that possible? Do you just throw it straight into the trash?
Clearly there's cost associated with the life of the asset. At minimum there's some cost of the capital used to make the purchase that, if you're looking to get the most beneficial tax situation, is depreciated over the life of the asset.
I'm pretty sure you're powering the hardware somehow.
You're probably maintaining or supporting it using a system admin or two.
Hardware fails so it needs repair or replacement. This can happen anytime. Systems using many HDDs like RAID or similar are a great example.
You probably have some insurance policies that cover the hardware in case of fire or similar. As the amount and value of hardware covered increases, those premiums can go up to.
If your connecting to a network then you occasionally need switches and cabling to connect to the storage.
If there is remote access then there's bandwidth that might need to be added.
I know these costs can vary but the "There is no monthly cost." statement makes you seem really ill-informed. I hope you're not the manager for that department.
You've not allowed for power, network, or backup in your costing. Try again.
What you may be seeing, especially if you are working for a very large company, could just be a cost allocation scheme, not a real money cost as you are thinking of it. If your department brings in revenue, the organization needs to match expenses to it for purposes of Management Accounting.
For instance, imagine you know it costs $X to run one of your cost centers. That dollar amount includes everything from the manpower, the equipment, the facility...everything. Now, they need to assign these costs to the departments that actually make money in a way that makes sense. They could do this by carefully costing out each service they provide and assigning an overhead rate, blah blah. That tends to be a pain. You do it if you have to...but you try not to have to. Another, easier, way of doing it is determining a usage metric (CPU hours, GB of storage, number of tickets) and using that to determine each profit center's percentage allocation of the overall cost.
So, the $60 per GB may not even be close to a market rate for storage. However, if all the departments used twice as much storage next year, the per GB cost might fall to $31 per GB (slightly more than half to account for the fact that there would obviously be more real costs). Conversely, if you convinced your management to contract externally for storage, everyone else might find their per GB cost rise, since the fixed costs would be static.
Also doesn't allocate anything for the cost of the person doing the maintenance/monitoring - that person doesn't come for free usually.
At those costs, one terabyte of data stored for three years would cost roughly $1.1 million. I find it hard to believe that you could legitimately build a SAN that stored 1 TB for that amount of money and not have hit some sort of performance wall that made the expense superfluous. I mean, at some point, you're maxing out multiple 10GigE fibre channels from your SAN and thinking "How can I spend the rest of this money?"
Another great way to muddy the waters is to misconstrue the question. You don't have to speculate. There's a difference between a vague question and casting a wide net. The transaction value of a single post is maximized in providing a specific answer to a specific question, whereas the transactional value of a discussion forum is maximized by having many situations and specifics put forward, including scenarios not originally envisioned.
There's at least as many undeclared assumptions in your narrow pedanticism as in the original question.
The question could be more evocative of his actual circumstance, but perhaps the poster was afraid of blowing his cover. Is the net cast on this question so broad that this can't be a useful exchange? Probably, if the question generates more complaints than contributions.
Backup and redundancy can get awfully expensive, particularly if an online backup product like Evault is used. I don't know if its worth 30 dollars, but it's a pretty fucking good milkshake.
Don't forget salary costs in IT to support it all.
That said, if IT is really using $30 per Gig then they aren't necessarily using the right online backups or tools. Redundancy doesn't cost that much. Geographical redundancy doesn't cost that much. Off-site "vaults" can be pricey, but not that expensive. If I were in the OPs shoes, I'd ask the IT department to share with me how they came up with that number. It's simple and not too confrontational. If their math is fuzzy or their numbers don't make sense, I'd follow up with them justifying that cost. It could just be that there is no IT budget, it all comes out of other budgets through this sort of thing. It could also be that someone has built a very good empire.
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No he wasn't He was talking about the cost he pays to his internal IT for storage. In most companies using a chargeback model for IT services, it does in fact include All of the costs the GP mentioned.
He did not indicate what storage included at his company, however it is not uncommon to include redundancy and backup in some offerings.. $30 for a gigabyte of replicated tier I storage with backup is still high.
Having done the modeling for this, here's some components to consider.
I have one example (AUD) where this works out as follows:
Do the maths above: excluding power, staff, tape libraries and rack space etc, it's already over $25 per usable GB for Tier 1 (and $13.57 in this model for the Tier 3 storage). Redundancy is baked in. Spare disks in the SAN are baked in (so a disk failure means immediate rebuild not "wait 4h until a replacement can be installed by an engineer" rebuild. And for this cost, we also have things like automatic deduplication of data (backup and online), data replication, historical backup to tape and so on and so forth.
No, Tier 1 storage does NOT cost $.10/GB, try more like $3/GB just for the drives.
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