Business technologies drive value for an enterprise, but beyond the technical characteristics, it can be challenging for a CIO, CFO or IT team to know exactly how to calculate the business value of one of the most foundational technologies for today’s data-centric business – enterprise storage.
Traditionally, enterprise storage has been seen as part of a “cost center” that simply uses up IT budget. However, the evolution of enterprise storage has led to new methods for calculating the return on investment (ROI) and payback of an enterprise storage platform.
Chief Marketing Officer at Infinidat.
The starting point for calculating business value is figuring out the payback period in which a storage system pays for itself. Expectations have changed. No longer does an enterprise have to wait years (i.e. 3-5 years) to get a positive payback on its investment in an enterprise storage platform, especially one that is core to its business. The new expectation is that the payback will be achieved in less than a year.
This is possible because the economics of enterprise storage have changed significantly.
The rise of software-defined storage, flexible consumption models, advanced autonomous automation, smaller system footprints, higher energy efficiency, and storage consolidation has spawned tangible opportunities to substantially lower capital expenditures (CAPEX) and operational expenditures (OPEX) of storage.
Business value
When enterprise storage saves an enterprise money, time and resources, it creates a measurable form of business value that justifies having cutting-edge storage capabilities for everything from AI data infrastructure to mission-critical applications and workloads.
When the enterprise storage system can cut costs in half – or more, the savings can be reinvested back into the business for long-term growth.
The way of saving money through enterprise storage varies. It’s not solely the upfront cost. Reduction in unplanned downtime delivers cost savings. A drop in hardware and support costs provides business value.
Having IT staff spend less time on the day-to-day tasks of storage has a direct financial impact. More efficient upgrades and deployment of new storage capabilities keep costs down in a business-friendly manner.
The speed of an enterprise storage system also has financial implications. Faster, cyber secure backups mean that an enterprise can recover its data faster after a cyberattack or disaster.
This translates into avoiding any significant disruptions and getting the business back online without incurring major costs. Quicker load times also affect how a company can operate most efficiently.
The flip side of the business value equation is how much an enterprise storage platform is enabling revenue growth, profitability and business growth. A method exists to calculate the total additional revenue per year that is attributed to the storage infrastructure.
This method tracks how the uptime of applications enables incremental revenue, how fast access to data provides a competitive advantage to win new sales, and how rapid recovery from cyberattacks has revenue implications.
The “nuts and bolts” of calculating the business value of enterprise storage
Now that the approach to business value has been explained, it helps to delve into concrete examples that you can use with everyone from your IT team to your company’s CFO. The following are examples of specific metrics that play into business value calculations.
• Annual average of financial benefits per petabyte. It’s useful to calculate the financial gain on a petabyte basis because it captures an important dimension in a large-scale deployment. For the sake of illustration, let’s say the financial benefit is $200,000 per petabyte of storage. If the enterprise has 50 petabytes, that’s a financial benefit of $10 million that ties directly back to the enterprise storage infrastructure.
• Combination of power efficiency, administrative efficiency, performance efficiency, and floorspace utilization efficiency into an overall set of operational efficiency metrics. It’s helpful to calculate the difference – or delta – between what level of efficiencies your enterprise currently has and what more efficient storage systems would garner as measurable efficiency gains. This calculation is helpful when you can cut power usage in half, reduce admin overhead by 50%, narrow costly floorspace by 30%-50% and improve performance by 2X or 3X compared to legacy storage systems. All of it contributes to business value.
• Cost and revenue implications due to unplanned downtime in a given year. If a storage infrastructure was down for 20+ hours in one year in unplanned disruptions that led to millions of dollars of lost revenue and unexpected costs, then these figures come into play in determining the value of the storage from a business standpoint. For example, if you lost $5 million due to downtime, then you measure that against the cost of getting a storage platform with guaranteed 100% availability and cyber storage resilience for uninterrupted uptime and near-instantaneous recovery.
By calculating and comprehending the business value of enterprise storage, CIOs, CFOs and IT teams can make better decisions on how to make a tighter connection between technology investment and business drivers.
We’ve featured the best secure drive.
This article was produced as part of TechRadar Pro Perspectives, our channel to feature the best and brightest minds in the technology industry today.
The views expressed here are those of the author and are not necessarily those of TechRadarPro or Future plc. If you are interested in contributing find out more here: https://www.techradar.com/pro/perspectives-how-to-submit
https://cdn.mos.cms.futurecdn.net/M6fvPLRyP9CRCBwfYj7mxL-2560-80.jpg
Source link
