TCO and ROI
The first attempt to document storage TCO at Cisco began in October, 2002. A number of different home grown tools were used to tally the number, type, and capacity of frames, network-attached storage (NAS) devices, SAN switches, and other capital expenditures related to storage. Subsequently, estimates were made for acquisition costs for each type of device. A weighted average of all frame types across the enterprise was then multiplied by the different cost structures for each device to come up with a total cost per MB across the enterprise. Additional data related to labor was compiled and then added to the overall per MB costs. The results from the study concluded that storage cost structures were in line with overall industry averages at approximately $0.10 per MB.Although the study produced reasonably accurate estimates of storage-related costs in IT, the study also revealed that Cisco was still in need of an automated resource reporting infrastructure. During this period of time, the SRM solution Cisco had chosen was just being rolled out and lacked the capability to supply meaningful data.Based on the estimated cost per MB, as documented in the TCO study, the savings associated with migrating one MB from DAS to SAN storage approached $0.01 per MB, per year. Estimates of overall savings for a single migration of a 150-TB DAS environment to SAN storage reached as high as $1,500,000$7,500,000 for an additional 750 TB.The Net Present Value (NPV) for the first phase of consolidation was positive and the project was positioned to create significant value based purely on the maintenance waiver, although with the additional migration of DAS to SAN storage, the ROI would surpass 50 percent.Over the long-term, the increase in depreciation expenses associated with the additional hardware was offset by the relief from millions of dollars in maintenance fees for the frames to be consolidated. With the completion of the project, datacenters that were already at capacity found much needed relief with the removal of 80 storage frames. Consequently, a planned datacenter expansion was put on hold, offering a significant cost-avoidance opportunity.The decision to deploy the MDS platform switches in conjunction with the consolidation effort led to a sizable shift in the amount of storage migrated from DAS to SAN. Early estimates projected that before the first round of consolidation, approximately 70 to 80 percent of all non-NAS storage was direct-attached, and only 20 to 30 percent was SAN-attached (spread across numerous SAN islands). Post-consolidation numbers indicated that at least 50 percent of all storage at Cisco had been migrated to a SAN architecture by the end of the first consolidation phase, decreasing the estimates for the amount of time required to complete the execution of the storage vision.