Taking a Behind the Scenes Look at Storage TCO, Part II

By Rob Peglar

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CapEx undoubtedly is a factor in determining TCO, but OpEx costs account for nearly twice as much lifetime expense as CapEx. There are three primary operational expenses to monitor with regard to TCO: maintenance; administrative costs; and “environmental” inputs, such as power, cooling and rack space.

This article will explain several key TCO measures to calculate when evaluating the total lifecycle cost of your storage system. This should remove the complexity surrounding true cost of storage, help you purchase the best system for your unique environment and improve your return on investment.


Warranty periods for storage hardware typically range from one to three years, depending on the type of system and its intended use. Hardware warranties of four and even five years are offered, but they are the exception, since most vendors cannot reasonably anticipate service-free operation for that period. The vendors who do offer four or five year warranties are worthy of consideration, since they offer advanced technologies that significantly reduce maintenance.

When considering OpEx for maintenance costs, determine what your expectation is for the useful life of the storage system. If the warranty does not meet your length of service needs, try to negotiate an extended warranty so you avoid additional maintenance fees. If a warranty extension is not available, you must add the cost of the maintenance fees to the total cost equation―running from when the warranty expires through the system’s expected term of service. For example, if the expected term of service is five years, but the warranty is only three years, the service and maintenance costs for years four and five must be added to the TCO calculation.

Administrative Costs

Administrative and operational costs must be included in the total cost equation as well, because the amount of time required for IT personnel to manage storage will impact their ability to complete other tasks. Of particular note are any requirements for specialized expertise. For example, some storage vendors mandate that only their trained and billable technicians be allowed to manage your storage system; particularly when it comes to system reconfiguration. Under this agreement, you must contact the vendor for each change, regardless of complexity or risk. This significantly increases administrative costs and may impact a business’s ability to function if a data outage occurs.

Even the routine task of replacing a failed disk drive can have a significant impact on the total cost equation. For a storage system with several hundred drives, IT personnel can spend about 15% of their storage-related time replacing failed drives. The majority of the cost of a typical storage hardware maintenance contract involves replacement and sparing of failed disk drives. To avoid this additional cost and risk, consider storage vendors who offer self-healing drives that rarely, if ever, need replacing.

The 800 Pound Gorilla

According to Wikibon’s 2009 article Storage CapEx vs. OpEx, power and cooling costs account for 11% of the total cost equation. Worse yet, this percentage is rising. Today, servers account for 40% of a data center's overall power consumption. Storage isn't far behind, taking 37% of overall power. Compounding the cost of power and cooling is the ever-increasing amount of data in the typical corporate data center. Storing that growing pool of data requires larger storage systems, which further increases energy consumption even as the acquisition cost per terabyte continues to decrease.

In addition, for data at rest, disk drives consume the same amount of power whether they are 10% utilized or 90% utilized. So a storage system with greater capacity utilization requires fewer resources to house, power and cool the data. Also, by utilizing efficient storage, you may be able to expand your storage capabilities within the physical space you have available today.

TCO Analysis

Conducting a TCO analysis is a great way to uncover the cost of your current storage equipment or help you to identify the lifecycle cost of a new storage system. To help you uncover the TCO of your storage system here is an easy rule-of-thumb guide for reference.

So, to wrap up, following these tips will lower the TCO of your storage system:

Rob Peglar is vice president of Technology at Xiotech Corporation, an innovator in data storage and protection solutions, and leads the shaping of the company’s strategic vision and emerging technologies. With more than 30 years in the industry, he also is a sought-after speaker and panelist at conferences and seminars worldwide and currently serves on the SNIA Board of Directors. For more information about Xiotech and its products and services, visit www.xiotech.com or call (952) 983-3000.