Business technologies drive value for a business, but beyond the technical features, 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 fundamental technologies for today's data-centric businesses: enterprise storage.
Traditionally, enterprise storage has been viewed as part of a “cost center” that simply drains the IT budget. However, the evolution of enterprise storage has given rise to new methods for calculating the return on investment (ROI) and payback of an enterprise storage platform.
Marketing Director of Infinidat.
The starting point for calculating enterprise value is determining the payback period over which a storage system pays for itself. Expectations have changed. A company no longer has to wait years (i.e. 3-5 years) to see a positive return on their investment in an enterprise storage platform, especially one that is critical to their business. The new expectation is that recovery 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, increased energy efficiency, and storage consolidation have created tangible opportunities to substantially reduce storage capital expenditures (CAPEX) and operating expenses (OPEX).
Business value
When enterprise storage saves a company 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 by half (or more), the savings can be reinvested in the business for long-term growth.
How you save money through enterprise storage varies. It's not just the initial cost. Reducing unplanned downtime results in cost savings. A drop in hardware and support costs provides business value.
Having IT staff spend less time on daily storage tasks has a direct financial impact. More efficient upgrades and the implementation of new storage capacities keep costs down in a business-friendly way.
The speed of an enterprise storage system also has financial implications. Faster, cyber-secure backups mean a business can recover its data more quickly after a cyberattack or disaster.
This translates into avoiding significant disruptions and getting the business back online without incurring significant costs. Faster loading times also impact how a business can operate more efficiently.
The other side of the business value equation is the extent to which an enterprise storage platform enables revenue growth, profitability, and business growth. There is a method to calculate the total additional revenue per year that is attributed to storage infrastructure.
This method tracks how application uptime enables incremental revenue, how quickly data access 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 business value approach has been explained, it's helpful 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 influence enterprise value calculations.
• Average annual financial benefits per petabyte. It is useful to calculate the financial gain in petabytes because it captures an important dimension in a large-scale deployment. To illustrate, let's say the financial benefit is $200,000 per petabyte of storage. If the company has 50 petabytes, that's a $10 million financial benefit that ties directly into the company's storage infrastructure.
• Combination of energy efficiency, administrative efficiency, performance efficiency and space utilization efficiency into an overall set of operational efficiency metrics. It is useful to calculate the difference (or delta) between the level of efficiency your company currently has and the most efficient storage systems that would achieve measurable efficiency gains. This calculation is useful when you can cut power usage in half, reduce administrative overhead by 50%, reduce expensive workspace by 30-50%, and improve performance by 2-3x compared to legacy storage systems. All of this contributes to business value.
• Cost and revenue implications due to unplanned downtime in a given year. If a storage infrastructure was down for more than 20 hours in a year due to unplanned outages resulting in millions of dollars in lost revenue and unexpected costs, then these numbers come into play to determine the value of storage from a business standpoint. For example, if you lost $5 million due to downtime, then you compare that to the cost of getting a storage platform with guaranteed 100% availability and cyber storage resiliency for uninterrupted uptime and near-instant recovery.
By calculating and understanding the business value of enterprise storage, CIOs, CFOs, and IT teams can make better decisions about how to make a closer connection between technology investment and business drivers.
We have presented the best secure drive.
This article was prepared as part of TechRadar Career Insightsour channel to feature the best and brightest minds in today's tech industry.
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:
