Cloud Storage On Premises And On Your Terms – Forbes Blog by John Webster

By John Webster, Monday, April 1st 2019

Analyst Blogs

Public cloud computing asks a fundamental question: Do you have to own computational resources to benefit from them?

New infrastructure as-a-service services offerings that reside within the four walls of the data center and behind the corporate firewall ask the same question. More specifically in the case of enterprise storage, do you have to own expensive, large scale, high performance storage boxes in order to capture and leverage data that could be of immediate value to your organization?

A growing list of vendors—both traditional storage and IT services vendors—now offer the latest/greatest storage systems on an as-a-service basis. These services are something of a hybrid between infrastructure leasing and cloud computing. Like a lease, the customer pays for storage system usage, not ownership. The computational benefits to the user are the same whether the system is owned or leased. And like cloud computing, storage is offered as a pay-as-you-go, consumption-based utility, only in this case, it’s delivered to the enterprise data center. A catalog of software, support and other add-on services like data protection and disaster recovery are typically available as well.

Often there’s an immediate reaction to the proposition of acquiring storage on a-as-a-service basis: It has to be more expensive than just buying it. Actually, no and the reason is simple when you think about it. When storage is bought via the capital budget (CAPEX), payment for storage is in the form of one, upfront lump sum which covers expected performance and capacity requirements over a period of 2-3 years. When the same system is acquired on an as a service basis as an operating expense (OPEX), payment occurs monthly and only for the performance and capacity needed immediately. If you compare the cumulative TCO cost of buying storage vs. Storage as a Service (STaaS), the first-year cost of the STaaS option is a fraction of the CAPEX storage cost.  That’s because the first 12 moths of payments don’t come anywhere close to equaling the purchase price. As usage goes on and capacity is added to cover data growth to both systems, STaaS continues to retain this TCO advantage, often riding down the price for performance cost curve

In short, the primary the reason STaaS can offer significant savings over the life-cycle of a solid state storage system (which in the world of all-flash arrays is typically 5-7 years) is that the user avoids both the initial CAPEX purchase of flash storage hardware/software and any follow-on purchases of hardware and software license fees needed to keep up with capacity growth. More difficult to quantify but nonetheless significant are administrative costs. When factored-in, the second source of TCO savings comes from the offloading of customer staff time to the STaaS vendor.

Vendors in this space fall into categories. There are the well-known enterprise storage vendors including Dell EMCHitachi VantaraHPEand Pure Storage. There is another category of large, well-established IT services providers including DXC Technology and IBM Global Technology Services. There is a third category of start-ups such as Zadara that have chosen STaaS as their primary rout to market. We can be sure that, not only will there be more to follow, but that services portfolios offered by each will grow as well.

Cloud computing teaches us that one can separate infrastructure encumbrances from the business application, and that because all of the burdensome infrastructure acquisition and life-cycle support issues become the responsibility of the cloud services provider, we can now focus more effectively on the life-cycle of a business project or application. On-premises, infrastructure services such as STaaS say that IT executives need not rely only on public clouds to gain this advantage. An increasing number of vendors now offer infrastructure—on premises and within a customer-controlled data center—for consumption on a cloud-like, pay-as-you go basis.

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