WHITE PAPER SAN Implementation Yields ROI for the ... - BL Trading

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WHITE PAPER SAN Implementation Yields ROI for the ... - BL Trading

Global Headquarters: 5 Speen Street Framingham, MA 01701 USA P.508.872.8200 F.508.935.4015 www.idc.comWHITE PAPERSAN Implementation Yields ROI for the EnterpriseSponsored by: Cisco SystemsRandy PerryNovember 2005Richard L. VillarsEXECUTIVE SUMMARYThe 10 companies interviewed for this study were all in various stages of migratingtheir current storage infrastructure to a predominantly Cisco MDS 9000 SAN solution.Storage demand in these companies was growing at 30% annually, which isrepresentative of many companies today. This study compares the three-year costsof the Cisco SAN environment to the costs of the former DAS/SAN mix. Highlights areas follows:! Three-year ROI of 499%! Hard cost savings from the higher utilization rates and lower staffing costs totaled$7,143 annually per terabyte! Downtime — the amount of time that systems are unavailable to users — can bevery costly in terms of lost productivity. Cisco MDS 9000 SAN systemssignificantly reduced both planned and unplanned outages of applications to endusers, reducing downtime by 56% and 81%, respectively.! Overall, companies were able to provision their businesses with more reliable,flexible, storage resources, and reduce the cost per terabyte by 68%.BUSINESS CHALLENGES FOR TODAY'S CIOIn today's evermore competitive business environment, the key challenge for CIOsand other IT executives remains aligning IT investments with general business needs.The three key elements in successful efforts to align IT and business needs are:! Consolidating IT infrastructure and operations to more effectively deliver neededapplications and services! Implementing robust business continuity for both mission-critical and generalapplications as well as the underlying information that businesses generate! Providing simpler but more intelligent systems for managing the protection,retention, and ongoing use of business information


Today, many companies are only just beginning to recognize the challenges thatthese key elements pose for existing IT architectures and IT organizations. In theircontinued effort to meet the sometimes conflicting cost, service-level, businesscontinuity, and new application demands of business executives, IT managers needto adopt new strategies for deploying server and storage solutions that provide betterperformance, higher reliability, greater capacity, and lower cost of operations.One key strategy that companies are pursuing to meet their objectives is greaterconsolidation of servers and storage on storage area networks (SANs). While SANshave been deployed in many large companies for three years or more, manycompanies tended to deploy islands of isolated SANs to support different applicationsor IT environments.When asked about consolidation, one respondent interviewed for this project replied,"Yes, consolidation is absolutely part of our strategy. Prior to our doing a consolidatedSAN environment, we would buy servers just to get storage. So now that we havedynamic storage with SANs, we can scale a lot larger with the storage."In the face of continued expansion of servers in storage deployment, companies needto go further and implement consolidated storage networks that boost utilization andmanageability for all server and storage assets.Consolidation of Storage and ServersFrom the perspective of IT executives, consolidation is consistently one of the mostwidely cited goals driving their overall IT strategies and investment decisions. For thepast six years, IDC repeatedly asked IT managers at medium-sized and large U.S.companies if they were currently undertaking any IT consolidation efforts. Today, onecan easily say that IT consolidation is the norm for most companies.The historic deployment of IT solutions in stovepipes, whether based on server type,application set, or business units, led to wasted capacity, duplicated functions, andinconsistency in policies for security and data protection. However, IT executives alsoknow that consolidation rarely if ever means consolidating to a single type of serverplatform, operating system, or storage system. The complexity of an enterprise interms of its scale and scope, its need to reap maximum benefit from pastinvestments, and the reality that IT products are optimized for specific environmentsmean that consolidation is never "one size fits all."Leveraging SANs to Simplify IT InfrastructureOne key area where IT executives need to focus their attention as they seek tosimplify infrastructure and implement consistency is physical connectivity of serversand storage systems (i.e., disk and tape) to ensure that data can be moved quicklyand efficiently around the enterprise.2 #IDCUS05WP002712 ©2005 IDC


purchasing SAN resources for new applications. Spending on SAN-based storage isdoubling annually and will comprise 69% of total online storage, up from 32% in twoyears. As a consequence, SAN integration and consolidation are important concerns."We were looking to utilize some of the new fabric intelligence services that the Ciscoplatform delivers," said one company IDC interviewed. "We were looking to reducelicensing and replication costs and disk management costs by moving that to thenetwork. The potential savings are not clear yet; but to make it worthwhile, it's got tobe at least a half million in savings."Hard Dollar SavingsThe most attractive potential benefit of SAN technology is the reduction in directcosts. Increased performance of storage assets enables companies to do more withfewer incremental servers or disk storage systems and the maintenance that goesalong with them. To gain maximum effectiveness, IT managers need to minimize thenumber of disparate SANs deployed and managed.In our study the participants had lowered their costs for storage equipment (hardwareand software), facilities, and support by 68% over three years. On average,companies were able to reduce their datacenter facilities costs for space and HVACby 50%. This savings was primarily the result of the two key factors inherent in SANtechnology: it is more efficient with higher utilization rates, and it is easier to manageand support. The utilization rate or the ratio between usable storage capacity andpurchased storage capacity in a large complex environment runs from as low as20–50% for DAS and up to 70–80% for consolidated SANs. In the study, theparticipants were able to reduce costs for the purchase and support of storage assetsby $6,860 per TB (not including IT staff savings), which accounted for 54% of the totalbenefits over three years.Even as companies were expanding their storage resources, moving those resourcesto a consolidated SAN on the Cisco MDS 9000 platform enabled a reduction in the ITstaff resources dedicated to supporting storage. Ultimately, the companiesinterviewed for this research achieved significant hard dollar savings as a result ofthe transition from DAS-SAN platforms to the Cisco solution.Over a three-year period, companies in our study improved their terabyte-to-staff ratiofrom 35.7TB per IT staff to 81.7TB and reduced total storage support staffing costs by55.6%. Increased staff efficiency accounted for 22% of total benefits.Figure 2 highlights the total three-year benefits.©2005 IDC #IDCUS05WP002712 5


FIGURE 2Total Three-Year BenefitsIT productivity(20.0%)User productivity(4.0%)Cost reduction(76.0%)Source: IDC, 2005Increased Staff ProductivityMost CIOs today are resource constrained. Their organizations spend 60–70% oftheir time keeping up with support requirements and responding to problems. Thisleaves little time for implementing initiatives to enable their infrastructure to run betteror to support their businesses. The companies in this study shifted to SANs to reducecosts. After deploying the Cisco MDS 9000 solution, they found additional resourcesavings in storage staff productivity. Centralized management and automation greatlyincreased IT efficiency and productivity.Figure 3 shows the areas of staff time reductions. Server setup and configuration andstorage setup and configuration were reduced by 49.5% and 24.5%, respectively.Online storage management operations, which consume 14% of storage staff time,were reduced by 7.1%. One case for IT efficiency increase was a healthcare facilitythat was able to consolidate from 14 devices to 2 Cisco MDS 9000 devices. "We likedwhat Cisco offered because it gave us the ability to simplify the environment," said therespondent. Capacity planning was a function that in some cases increased in timerequirements. The SAN implementation with the Cisco MDS 9500-based solutionhelped automate capacity planning so that the time requirements dropped as thequality rose. Better vision, capacity planning, and integration enabled the storage staffto reduce outages and so troubleshooting and repair dropped as well by 31.9%.6 #IDCUS05WP002712 ©2005 IDC


FIGURE 3Reductions in IT Staff Time Spent on Storage Support TasksBackupStorage managementOther storage activityCapacity planningStorage network setup/configNetwork troubleshooting/repairServer setup and config0 10 20 30 40 50(% of respondents)Source: IDC, 2005Increased ReliabilityParticipants in our study were able to reduce unplanned downtime from .3 hours permonth to essentially zero using redundant systems. Planned outages were reducedfrom 2.56 hours per month (off-peak times) to .6 hours. Increased reliability meansthat storage resources are always available to those who most need the resources.Reducing planned and unplanned downtime increases productivity across all users.Total user productivity savings accounted for 5% of total benefits.ROI AnalysisThe ROI of 499% is determined from the net present value (NPV) three-year totalbenefits of $16,696 per terabyte derived from an average annual investment of just$3,349 per terabyte. There was a fairly significant initial cost for the purchase andimplementation of the Cisco SAN solution and the migration of server and storageassets so that payback was a little over 13 months (see Table 1). Companiesplanning to migrate the bulk of their storage assets to SAN using the Cisco approachwill find most of the savings come from reduced hardware and staffing costs as wellas improved efficiency in managing multiple storage domains through a commoninfrastructure.©2005 IDC #IDCUS05WP002712 7


TABLE 1Three-Year ROI for SAN Migration (per TB)Annual Benefits $9,485Total investments $3,349Net present value (NPV = total benefits over 3 years discounted at 12% minus the total investment) $16,696ROI = NPV/investment 499%Payback = (investment/ first-year cash flow) - months 13.2Discount Rate 12%Source: IDC, 2005CHALLENGES: IMPLEMENTATION IS KEY TOSUCCESSAs is the case with any IT solution, effective implementation of a FC switch solutionis the key to success. What should an IT executive look for in an implementationpartner?! Understanding the benefits and pitfalls of server and storageconsolidation. Although network-based storage solutions can improve capacityutilization and reduce management, an implementation partner must havewell-formed and well-documented consolidation practices that don't limit futureoptions while enabling more targeted returns on IT infrastructure investments.! Support of heterogeneous server and storage environments. IT managersneed to maximize the use of previously installed equipment whenever possible.An implementation partner must have both knowledge and contacts to identifyand resolve quickly any interoperability problems. They should also make futureIT infrastructure procurement decisions based on investment protection tominimize interoperability issues going forward.! Integration of effective storage management into the deployment process.Ongoing administration/management is the most overlooked and misunderstoodissue in most IT deployment plans, regardless of company size. Animplementation partner must help develop a management and provisioningprocess that works with existing management systems and takes advantage ofthe solution's new capabilities to improve management efficiency.Choosing the right solution and the right partner to assist in implementation is,therefore, the highest priority for companies that seek to achieve better and morecost-effective control of their companies' information.8 #IDCUS05WP002712 ©2005 IDC


Copyright NoticeExternal Publication of IDC Information and Data — Any IDC information that is to beused in advertising, press releases, or promotional materials requires prior writtenapproval from the appropriate IDC Vice President or Country Manager. A draft of theproposed document should accompany any such request. IDC reserves the right todeny approval of external usage for any reason.Copyright 2005 IDC. Reproduction without written permission is completely forbidden.©2005 IDC #IDCUS05WP002712 11

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