by Angela Miller
I thought it worth it to repost a message (with permission) from a colleague at my former company.  David Merrill from Hitachi Data Systems blogs about “Storage Economics” – a topic that is extremely important to green computing. Here’s the text of the post for your reference:

Virtualization Economics

April 14th, 2007
I attended a CSC Consulting conference this past week, and listened in on a forum on Virtualization, and the operational benefits of this approach with servers and storage. I was intrigued to hear the comparisons and differences between server virtualization (and hypervisor) and storage virtualization. Some of the talk went into how virtualization helps reduce TCO for the enterprise. I believed this statement to be true, but some of the side discussions spend a lot of time justifying these economic statements.

After the workshop, in a conversation with a CSC colleague on this topic, some key points were discussed, because people often ask me about storage virtualization economics, if and how does this technology (like the USP or NSC) really save money. Here is what I told my colleague yesterday:

• Although an important technology, virtualization is not a direct cost impact functionality. Rather, virtualization is an enabler of other cost reduction functions
• Virtualization requires some advanced operational and architecture capability to realize the full benefits
• Virtualization is not free
• There is a cross-over point (as with most technologies) where the cost to virtualize provides long-term payback from the initial investment. With very small storage environments, the cross over point may never be realized.
• The direct cost-lowing-functions that virtualization enables are (partial listing):
  • Integrated tiered storage, with the cost benefit of the right data on the right value of storage infrastructure
  • ILM and DLM with rapid data movement and remastering
  • Single management point, with multiple storage types, technologies
  • Better asset utilization, reducing long-term CAPEX
  • Reduction of software licenses
  • Reduction of HW and SW maintenance
  • Although a better-trained SA is needed, the TB-per-FTE can be much higher
  • With better aggregate utilization, the environmental costs per unit of storage is reduced

You can see from the list above that virtualization impacts several types of storage ownership cost, many of which can be reduced when virtualization is applied at the right place with the right investment and architecture.