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Data Storage The Internet Businesses

Internal Costs Per Gigabyte — What Do You Pay? 420

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?"
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Internal Costs Per Gigabyte — What Do You Pay?

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  • Eh? (Score:4, Insightful)

    by ledow ( 319597 ) on Thursday July 29, 2010 @04:32PM (#33075488) Homepage

    Bandwidth? Storage? Backup? Downloads from a particular site? What the hell are we talking about here?

  • IT all depends (Score:5, Insightful)

    by camperdave ( 969942 ) on Thursday July 29, 2010 @04:34PM (#33075520) Journal
    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.
  • by jhantin ( 252660 ) on Thursday July 29, 2010 @04:35PM (#33075540)
    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.
  • by HockeyPuck ( 141947 ) on Thursday July 29, 2010 @04:37PM (#33075590)

    "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?

  • I don't pay (Score:4, Insightful)

    by El_Muerte_TDS ( 592157 ) on Thursday July 29, 2010 @04:39PM (#33075622) Homepage

    My boss does.

  • Re:$40 (Score:1, Insightful)

    by Anonymous Coward on Thursday July 29, 2010 @04:49PM (#33075822)

    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.

  • by zonky ( 1153039 ) on Thursday July 29, 2010 @04:52PM (#33075856)
    You've not allowed for power, network, or backup in your costing. Try again.
  • Re:Eh? (Score:5, Insightful)

    by Guspaz ( 556486 ) on Thursday July 29, 2010 @04:52PM (#33075864)

    That's not the point, the point is that you can buy a consumer grade hard disk for $0.05/GB.

    A 1TB consumer-grade HDD costs $50. $1/GB per month would mean $12,000 per year to store that. His employer is spending $360,000 to store that same amount of information. This is clearly far beyond the "consumer pricing has no bearing on enterprise pricing" argument.

    I don't think that more than one third of a million dollars can be justified to store one terabyte of data, no matter what the infrastructure involved. At that price, you can afford to colocate one hundred servers in one hundred different datacenters and replicate your data to all of them, including the staff to manage them all. $360k per year to store 1TB is insanity.

  • by neltana ( 795825 ) on Thursday July 29, 2010 @04:53PM (#33075876)

    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.

  • by Eristone ( 146133 ) * <> on Thursday July 29, 2010 @04:59PM (#33075974) Homepage

    Also doesn't allocate anything for the cost of the person doing the maintenance/monitoring - that person doesn't come for free usually.

  • Re:I don't pay (Score:3, Insightful)

    by Joce640k ( 829181 ) on Thursday July 29, 2010 @05:05PM (#33076080) Homepage

    The only 'insightful' comment so far, and me without mod points - your department pays whatever your boss has agreed to pay. Why should it even worry you...? $30 a month is background noise compared to the cost of running a 'department'.

    (PS: The OP didn't even say what he's paying for so I don't see what other people are commenting on...)

  • Re:Eh? (Score:5, Insightful)

    by causality ( 777677 ) on Thursday July 29, 2010 @05:06PM (#33076106)

    I don't think it's as vague as everyone is making it to be. Since his department is paying the IT department it most likely means data on a windows network through CIFS that is backed up and redundant. This is a common thing.

    If you are having to speculate based on what is likely and common, then it fits the very definition of "vague".

  • by Guspaz ( 556486 ) on Thursday July 29, 2010 @05:08PM (#33076124)

    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?"

  • Re:Eh? (Score:3, Insightful)

    by bennomatic ( 691188 ) on Thursday July 29, 2010 @05:16PM (#33076230) Homepage
    Well, if they've got an internal SLA for 24/7 uptime, that would require having at least four full-time people (4*40 = 160, and there's 168 hours in a week) *available*, if not directly interactive with the storage system. If they each make $90k, there goes your $360k/year. Cut those salaries in half and you get eight IT people full time, with a little bonus for the folks who work nights and weekends.

    And that's just for one location. If this storage includes multiple datacenters, they would have to have more people on-hand.

    Maybe this is just the way the original poster's company determines their IT staffing budget; if they've decided that there is a direct correlation between the amount of disk storage requirements and the number of IT people required to cover all IT needs, then it might make perfect sense. Buy yourself a gigabyte for $30/year and with it get all the free desktop and network support you can eat!
  • Re:Eh? (Score:3, Insightful)

    by Peach Rings ( 1782482 ) on Thursday July 29, 2010 @05:21PM (#33076298) Homepage

    My guess is that at some point (back when mailboxes had a 3MB limit or whatever) during some cutback someone decided that storing too many files is a good target for a push to conserve resources, so they had the brilliant idea of jacking up prices to get departments to use less. The very idea of conserving space as if it's some limited resource is so ludicrous that I can barely type it, but it's also very believable in an office setting.

  • by epine ( 68316 ) on Thursday July 29, 2010 @05:27PM (#33076386)

    If you are having to speculate based on what is likely and common, then it fits the very definition of "vague".

    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.

  • by frosty_tsm ( 933163 ) on Thursday July 29, 2010 @05:29PM (#33076420)

    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.

  • Re:Eh? (Score:5, Insightful)

    by Anonymous Coward on Thursday July 29, 2010 @05:31PM (#33076448)

    You've been suckered into believing that private enterprise is smarter and more efficient than government, when in fact both can be equally staggeringly incompetent!

  • Re:Eh? (Score:5, Insightful)

    by Z00L00K ( 682162 ) on Thursday July 29, 2010 @05:32PM (#33076456) Homepage

    Interenal invoicing is just causing a lot more overhead in an organization making it move slower and be less responsive to changes.

    Managers will just sit down and fight about internal costs instead of heading forward.

    $30 seems to be very high too, but the important thing is also what do you get for it?

  • by dgatwood ( 11270 ) on Thursday July 29, 2010 @05:55PM (#33076714) Homepage Journal

    And it's not uncommon for IT departments to charge you for the former, and give you the latter.

    Fixed that for you.

  • Re:Eh? (Score:5, Insightful)

    by BigSlowTarget ( 325940 ) on Thursday July 29, 2010 @06:10PM (#33076926) Journal

    1) He isn't paying for today's 1TB. He's paying the loan IT took out to integrate a system to provide 1TB in 2005 across who knows how many platforms probably including wonderful legacy applications from 1982 written in COBOL.

    Think about the way that would work. IT buys the hardware but you don't pay penny one at that point. They set up the service and start charging you. Hopefully they forecast demand well and don't buy too much extra, but that hardware, setup cost, maintenance, integration, forecasting and everything else is a big lump in month one that you pay back over time in monthly charges. Two years down the line you are still paying for the initial cost even if going out and buying it new would cost only a fraction. Too bad about that, if you didn't need the capacity blame the forecasters or (probably) business people who provided data for the forecast basis.

    2) The charge that says "per GB" is not necessarily for storage. It's a proxy for it and it probably includes it, but charge back systems always include compromises about which services are packaged, which costs are shared across multiple charge items and who is using or owns the underlying assets. If you really want to know what the cost should be you have two possibilities: yell at the IT management until they provide you a special charge rate of assets specific to your department or yell at the IT accountant support until they cough up the entire IT budget and chargeback methodology. Both are nearly impossible.

  • by Wovel ( 964431 ) on Thursday July 29, 2010 @06:15PM (#33076978) Homepage

    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.

  • Re:Eh? (Score:3, Insightful)

    by SuperQ ( 431 ) * on Thursday July 29, 2010 @07:34PM (#33077806) Homepage

    Actual cost for employees is probably higher (after benefits and such), I usually 2x actual salary. That total comes out to about $1M. 150K for a SAN will you get about 10T of usable storage. That comes out to about $100/year/GB. If spread these costs out a bit:

    Capitol costs for server equipment:
    150+20+80+200 = $450K

    Operating costs:
    Rack space (1 rack @ $1500/month x 36 months) = $54K
    Vendor service contracts (10% of equipment cost per year) 45 x 3 = $135K
    Support staff ($200K for 2 senior, 100K for 2 junior) 600 x 3 = $1800K

    Grand total cost for 3 years: $2.439M

    Total comes to $238/GB or $6.6/GB/Month.

    And in reality, a single senior sysadmin/network admin @ 200K/year salary could take care of that amount of equipment and it would take at worst 25% of their work hours. I know because I used to do that kind of thing. So 25% of 200K replacing the 1.8M above would bring the SAN cost down to $77/GB or $2.14/GB/Month.

    $30/GB/Month is a scam.

  • Re:Eh? (Score:4, Insightful)

    by Gorobei ( 127755 ) on Thursday July 29, 2010 @10:49PM (#33079120)

    Fair point, but now add some time from:

    1. One audit group to ensure system continues to conform to spec.
    2. One test team to ensure all that backup stuff actually can restore according to SLAs.
    3. One legal/management group to ensure SOX compliance each quarter.
    4. One capacity planning group to track/handle trends and headroom.
    5. One data center build team to bring new farms online as needed.
    6. One decom team to manage end-of-line for obsolete resources.
    7. One architecture team to either spread your vision or show you how you're doing it wrong.
    8. Ten other groups you've never heard of doing things you think you don't need.

  • by DavidRawling ( 864446 ) on Thursday July 29, 2010 @10:57PM (#33079166)

    Having done the modeling for this, here's some components to consider.

    • Cost of the SAN controllers - often spread across servers, but can be spread across disk shelves / disks
    • Maintenance on the SAN controllers
    • Production Disk shelves - the cabinet, the full set of disks, the rack space, the cables, the power connections and the connections to the SAN head if needed
    • Backup Disk
    • DR Disk
    • DR Backup Disk (ie you replicate backups to DR then restore)
    • Tape Libraries and Drives
    • Tape Software (commonly sold at $X per TB)

    I have one example (AUD) where this works out as follows:

    • SAN controllers - $100K for up to 40 shelves of disk, so $2500 per shelf - so as below $1 per GB
    • Production Disk shelves - 300GB 15K FC disks giving ~2.8TB for $24K - $8 per GB
    • Backup Disk - 1TB 7.2K SATA disks - 9TB per shelf for $23K - $2.5 per GB
    • DR Disk - same as production - $8 per GB
    • DR Backup Disk - same as Backup - $2.5 per GB
    • Tape Software - $3.5 per GB
    • Tapes - AUD60 each, LTO4 (1200GB/tape), 17 tapes required for complete cycle - $1 per GB!

    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.

  • Re:$40 (Score:3, Insightful)

    by afidel ( 530433 ) on Thursday July 29, 2010 @11:11PM (#33079256)
    No, Tier 1 storage does NOT cost $.10/GB, try more like $3/GB just for the drives.
  • Re:Eh? (Score:2, Insightful)

    by mysidia ( 191772 ) on Thursday July 29, 2010 @11:17PM (#33079286)

    hell some of our Tier 1 SAN space still costs us in the order of $10,000 a TB just for the hardware.

    Companies purchase SAN hardware to save money... aggregating the storage in a SAN is supposed to allow less disk space to be wasted, to deliver performance to the apps that need it, and reduce hardware costs....

    Oh, yeah, and $10,000 for a TB is pennies compared to $30/Gb/Month

    100gb at that rate is $3000/month or $36,000/yr

    And 100gb is only 10% of what a 1 TB piece of SAN gear can hold

  • Re:Eh? (Score:3, Insightful)

    by DeBaas ( 470886 ) on Friday July 30, 2010 @02:09AM (#33079982) Homepage

    Well if he works for sales and knows about price per GB and the IT department managed to sell 1gb for 30$ per month, maybe they should switch jobs....


  • by PybusJ ( 30549 ) on Friday July 30, 2010 @04:19AM (#33080426)

    Your description sounds about right. But, by using storage as your proxy for all IT cost you are putting perverse incentives for people to use less storage than is right for their business need (or to avoid using central storage, where it can be managed and backed up, and put their stuff on their own external HDDs).

    I think a per person overhead charge, plus a storage charged at closer to cost is likely to work out better.

    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.

    Right, so this is the exactly what a rational department manager should be doing.

    Incidentally, I started looking into running my own departmental IMAP server yesterday to avoid much smaller charges of about $30/Gb/year for email archiving from central computing services.

When a fellow says, "It ain't the money but the principle of the thing," it's the money. -- Kim Hubbard