It's All About ROI


A recent RoperNOP Technology study shows that nearly 50 percent of solution providers focused on storage management cite ROI as a key customer concern. One challenge for the solution provider is that each customer tends to define ROI in a slightly different way. Another challenge is that the market for enterprise storage management software is so new that few ROI models exist. Software vendors recognize the need to develop these methodologies to help the channel sell storage management software. Take, for instance, Storability, a Mass.-based storage management software firm. It is currently engaged with an outside consulting firm to develop an ROI tool for customers considering its software. "A big piece of the puzzle right now for end users is measuring the ROI for storage software deployment," says Kirby Wadsworth, vice president of marketing at Storability. "It will be critical to our success, and the success of storage management software vendors in general, to develop a value proposition that includes Return on Investment in terms of real cost savings and increases in productivity through deploying software."

With enterprises focusing more and more on how to squeeze a return from existing assets, management software becomes a financial tool to improve utilization of resources. While we wait for storage software vendors to develop ROI models to measure payback on software deployments, here are a few critical storage issues to focus on.

Utilization

Depending on whose numbers you believe, analysts estimate that somewhere between 30 percent and 60 percent of installed storage capacity is not utilized. When you are talking about a few hundred gigabytes this is not a big impact for the average enterprise, but when you consider companies with tens of terabytes, this unused capacity becomes a measurable cost. Software such as virtualization or storage resource management can address these challenges. Software virtualization allows storage managers to offer all capacity as a central virtual pool that can then be easily managed and allocated according to need. No longer will storage be dedicated to a particular system, whether directly connected to a server or through connection to a SAN. This approach would allow storage administrators to allocate unused capacity to any other system in the enterprise. It would also allow administrators to buy storage for the entire enterprise rather than by application. Another approach by storage software vendors is to provide management and reporting capabilities on storage allocations, allowing users to locate and provision unutilized capacity. While this type of software is not as functional as virtualization, the simple fact of knowing how much extra capacity exists and its location is a step up from the reporting that exists today.

Once clients know how much free capacity they have, better decisions can be made regarding allocation and purchasing. Clients may actually be able to delay or defer future storage purchases by managing capacity better. This translates into real cost savings, which can be built into an overall project ROI.

Charge-Back Models

More and more IT departments are acting like IT services firms. This model allows IT to treat other departments in the company as clients, charging them for resources just as a managed service provider or outsourcer might do. A major challenge with storage infrastructure today is, "What do you charge for and how do you charge for it?" If you are not sure how much capacity you have, if you are not sure how much you are backing up, how can you know whom to charge and what to charge. Enter storage management software. With the ability to monitor and measure capacity, backups and SAN resources, IT departments can build accurate models to begin assessing charges to business line groups by usage and services provided. This functionality will help organizations rationalize IT investments, as well as help business line groups to include IT services in their overall P&L. CFOs will now be able to allocate expenses by business line and better calculate a storage technology ROI for individual business units.

Vendor Leverage

Part of the impact of storage management software is the shift of functionality from the hardware platform to functionality independent of the hardware. This means the days of paying exorbitant prices for high-end hardware with proprietary functionality are over. Highly functional enterprise storage management software makes storage hardware officially a commodity. This allows end users to negotiate capacity purchase contracts better, without being dependent on unique functionality offered by a particular storage manufacturer. Software-based reporting features will allow users to make more accurate decisions regarding current and future needs. Overall, the ability to make better decisions will translate into cost savings and should be measured in ROI.

Solution providers who can have these financial conversations with customers will have an edge not only in selling storage management software but also in adding business value to clients.

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It's All About ROI