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Building A Business Case For Software Defined Storage (SDS)

Building A Business Case For Software Defined Storage (SDS)
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Although software defined storage is still an evolving technology, it offers unique functionality and benefits over traditional storage systems including more flexibility, improved management and utilization, as well as cost efficiency.

Before you begin to craft a business case for software defined storage (SDS) you must understand that it's still an evolving concept. However, just because it's still considered an emerging technology, doesn't mean it's a bad idea.

Software defined storage solutions resonate logically and as enterprise architecture continues to climb up the stack, it's inevitable. This innovation starts with virtualized storage, then follows through with the separation of the management software layer from the storage hardware. As a result, commodity storage can be utilized in many cases, and end-user applications experience no hiccups when there's a disruption on a particular frame. Later in the article we'll discuss what the direct benefits are and how they can be quantified.

But first a quick nomenclature note. Software defined storage solutions are sometimes referred to as software-based storage, and vice versa. Although software-based storage is the more generic term and offers a broader definition, software defined storage has become the popular choice for vendors and a common term among IT professionals familiar with the concept of software defined networking (SDN).  

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Software Defined Storage Costs And Benefits

Just because the idea of software defined storage isn't mature yet doesn't mean the technology isn't ready for deployment. SDS has been growing quickly over the last several years, offering benefits such as:

  • Improved load balancing leading to higher utilization;
  • Automating system management;
  • Simplifying backup-and-recovery;
  • Reducing the storage component of network costs.

Let's consider the case of an enterprise in which a team of eight storage administrators makes an average $90,000 per year plus a 30 percent fully-burdened rate. They manage a complicated, multi-tiered, multi-vendor, multi-platform, multi-site storage domain with 10 installed petabytes, which is growing at a 20 percent annual clip, although that's offset by a 20 percent annual reduction in unit costs. The average annual depreciation and maintenance expenses blends out to $5,000/GB, i.e., $5 million/PB. It is, as storage arrays tend to be, a highly efficient system in terms of utilization -- let's call it 88 percent.

Storage accounts for an estimated 30 percent of the IT department's WAN/LAN charges, which total $1.8 million annually. Additionally, there's a $1 million backup and recovery contract that increases in annual cost in proportion to the growth of the environment, that is, 20 percent.

The environment is reasonably scalable, so the department adds one new storage admin every two years on average, an annual growth rate of around 6 percent at present. There's also an average 4 percent annual pay raise figured in, so total labor spend increases about 10 percent per year. The current state, then, looks like this:

Figure 1: Software defined storage current state

As one might expect, the biggest slice of the storage cost pie was wheeled in on a hand truck. As cheap as disk space might be by unit, in the aggregate it's very pricey.

Now let's figure out how we're going to quantify the benefits. With SDS, we can forecast a 50 percent staff reduction, and 25 percent price cuts for storage systems costs, backup and recovery and storage-related network costs. Further, the utilitzation rate should improve by one-third. That is, the 12 percent of white space should decline to 8 percent at end state.

As for any savings from data center facilities, we consider floor space costs to be sunk and power savings to be nominal. Any savings at the management or PMO levels would also be nominal, and at best, indirect. The target state, then, looks like this:

Figure 2: Software defined storage target state

Making The Case For Software Defined Storage

Now, how do we get from there to here? Let's assume that we're through the looking glass with storage and are now paying $1 million on software and only a quarter of that on hardware. Add in a reasonable amount for consulting, architecture, testing and training. Also, because this exercise is going to result in the loss of jobs, we need to factor in severance -- say six months' pay for each of the individuals being RIF'ed, taken as a one-time write-down in Year 0.

Figure 3: Software defined storage transition costs

At this point, we can see how the costs and benefits compare on a timeline:

Figure 4: Software defined storage costs-benefit analysis

Looks like a winner. Let's see what the investment case looks like with a 10 percent discount rate:

Figure 5: Software defined storage investment analysis

This is exactly the kind of thing a CIO wants to see -- a business case that will yield benefits before she moves on to her next job. Still, you need to note -- at least in the text -- that this is largely untested technology, and it might make more sense to wait until you're discussing the following year's budget before you commit to software defined storage.

Business Case Resources:

To help you get your business case for software defined storage off the ground, download this Excel calculator and PowerPoint template, which you can customize to your needs.

The Excel calculator will help you determine your current state, project costs, and target state. It includes all of the inputs you'll need so you can present the final analysis. The PowerPoint template will walk you through adding the analysis from the Excel calculator so you can present the information to your stakeholders in a logical way.

  >> Download Excel Calculator
  >> Download PowerPoint Template

To get a better understanding of the key metrics and math used in these resources, take a look at How to Build a Successful Business Case for an IT Project.


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