Despite working for a vendor, David Merrill has a habit of posting some very good entries full of common sense; I find myself nodding in agreement with much of what he posts. His latest couple of entries here and here had me nodding in agreement; it’s not just the vendors who are guilty of some dubious voodoo economics, I’m sure that most of us have put together business cases which if were really scrutinised, don’t really stack up.

We often talk about trying to make capital acquistions cost neutral in less than eighteen months; a reduction in Opex to offset the capital cost. Vendors are often complicit in this, as I mentioned in my previous entry, inflated maintenance costs mean that is often cheaper to refresh and take the bundled maintenance offered with a new system than to continue to pay maintenance on the legacy kit.

However, if I examine the failures that we tend to have; it is generally the moving parts which fail; you know those things which spin at speed? Yes, the spinning rust. And if there is one thing which has fallen in cost; it is spinning rust.

Okay; with the very much older disks, vendors simply can’t get new drives that small but I assume that most of you are aware that a large number of maintenance replacements are not actually new components? They can be previously failed and reconditioned components or perhaps pulled from arrays which have been migrated to the latest and greatest technology.

Maintenance in the IT industry is a fantastic example of Voodoo Economics…but hey it’s green, well they are recycling and re-using! But remember, there is a third part to that; REDUCE!

Vendors don’t have any real incentive to reduce maintenance costs; it firstly enables a constant upgrade treadmill because if you really had to evaluate the value of the new features, life would be a lot more complex but if you don’t upgrade, maintenance is a very nice and high margin activity.

Actually EMC should be thanking companies like HDS and IBM; it enables people to keep their legacy arrays around for a lot longer and hence keep paying EMC high maintenance! And no I’m not saying that EMC’s maintenance charges are especially high, there are much worse offenders out there!

© Martin for Gestalt IT, 2009. | Maintenance Madness
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I sat in a meeting today where the subject of how often you refresh your storage infrastructure came up. I know that many companies are working on a three-five year model but we were discussing whether this should be increased to seven and what needs to happen to make this so.

There are a few reasons why we were coming to this conclusion; firstly spinning rust in the Enterprise is probably at it’s peak and actually anything over the current maximum size of a spindle has potentially limited use i.e anything over a 1-2 terabyte drive is not especially useful for shared storage infrastructure. Please note, I say shared storage infrastructure!

Larger drives may still have a place to play in your archive tier but even that is debatable. And if you look at most Enterprise end-user desktops; they often have rather small local drives. It is the home-user and their insatiable demand for storage which really drives the size of spindles now.

We also know that the performance of the spinning rust is probably not going to improve dramatically. So what does change? Well, yes we have the introduction of SSDs and a couple of things mean that a four-five refresh cycle for that technology is probably sensible. And then there are the storage controllers themselves; these don’t especially wear out but technology does move on. 

But the current designs of arrays mean that when we refresh; we are forced to refresh the lot. We are also forced to refresh by overly inflated maintenance costs. Let’s be honest; most refreshes are justified by cost savings on the OpEX i.e maintenance. Even if I go to a virtualised infrastructure as espoused by HDS or IBM; these maintenance costs still mean it is often more attractive to refresh rather than sweat the asset.

However the current economic climate means that we are now more closely beginning to examine the model of keeping things for longer and examining our maintenance budgets very carefully. Dropping maintenance for software which is now stable and at terminal releases; potentially talking to third-party maintenance organisations who are much more willing to support legacy kit at a reasonable cost.

And we are considering strategies which enable us to continue to make use of kit for longer. VMWare’s announcements today allowing replication and thin-provisioning at the hypervisor layer for example.  So funnily enough, EMC have come round to external storage virtualisation; you just buy it from VMWare as a software product.

It’ll be interesting to see what other traditional storage related functionality makes its way into the hypervisor. And at what point EMC realise that they are actually selling ‘traditional’ storage virtualisation but as a software product and at which point that they do become a software company.

Funny old world, as EMC slowly catalyzes into a software butterfly selling storage virtualisation, Oracle becomes a hardware grub. And in the space of a week; EMC ‘kill’ DMX with V-MAX, then they kill V-MAX with vSphere. Now that’s what I call progress!

© Martin for Gestalt IT, 2009. | Investment Strategies and Virtualisation
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I found David Merrill’s blog entry here on Squeezing (Easily) into Tight Jeans amusing. David is talking about a couple of his customers who were using various capabilities to reduce the amount of storage they needed; I suspect using techniques such as thin-provisioning and the ability of the USP-V to consolidate islands of storage into a usable pool of storage.

And then they were going to decommission a whole bunch of arrays and reduce the amount of storage on the floor. I think David was surprised that they were choosing to decommission the storage as opposed to simply use the reclaimed storage for growth.

But sitting on this side of the fence, the customer side; this is no big surprise at all. Depending on the age of the arrays and depending on the software sitting on the arrays and especially if the arrays were out of warranty periods; the maintenance costs are generally so high that it simply does not make economic sense to keep them around.  

Software maintenance on all of the Enterprise class arrays is just plain expensive. If you then factor in that if you are trying to sweat an asset for a couple of extra years; that is another couple of years of what are often power and space inefficient arrays and you are going to be looking at another migration effort in fairly short order, it does not make a huge amount of sense.

The situation is actually a lot less clear on mid-range arrays as the maintenance costs are often considerably lower but if you have got aging Enterprise arrays; get them out if you can.

© Martin for Gestalt IT, 2009. | Economic Realities
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This is part of a series on Enterprise Data Migration Strategies:

• Data Migration Strategies – Part I
• Data Migration Strategies – Part II
• Data Migration Strategies – Part III
• Data Migration Strategies – Part IV
• Data Migration Strategies – Part V

I recently posted on the issue of migrating data from large Enterprise storage arrays. The post covered a summary of the migration steps, with some brief discussion on calculating costs. In this series of posts, I will discuss migration strategies in more detail, covering the major steps in developing and implementing an ongoing Enterprise Data Migration Strategy.

Why Migrate?

Understanding the reasons for migration is a great place to start in developing a strategy. Seasoned IT professionals will know that change for change’s sake is not a good thing; “if it ain’t broke, don’t fix it” – the old adage says, for good reason. Data migrations will introduce change into an environment and with change comes risk. However there are practical reasons to perform migrations. These include:

• Financial – as technology ages, maintenance payments kick in and over time, generally the older a storage array, the higher the maintenance costs. Storage vendors are keen to offer the latest, larger, faster array at a discounted cost if you move from their previous generation of technology. Hardware vendors will also offer significant incentives to achieve a vendor swap-out, giving huge discounts in order to displace the competition. Many organisations could replace their existing technology and see significant ongoing cost savings, justifying the expense of a migration effort.
• Environmental – Data centre space is always under pressure and as one of the largest users of space, power and cooling, storage is a target for rationalisation and consolidation. Whilst the cost savings in consolidation may be small, there may be larger cost avoid issues that justify migration to new technology, for example if a new or extended data centre is required at significant investment or where expansion is simply impossible. Data centre space is at a premium with many companies, who will look to make tactical changes while a longer term strategy is developed.
• Technology – storage technology continues to evolve; new features such as thin provisioning and data de-duplication can enable cost savings and increase competitive advantage. In addition, vendors may offer limited support for newer hardware (HBAs, switches, operating systems) against their storage arrays, forcing migration to new technology in order to maintain a supported position (without incurring additional cost).

Benefits

Understanding the “Why” is pretty easy to explain. However quantifying the benefits may be more difficult. In developing a strategy it is essential to be able to show the benefits that will be achieved in migrating. Some of these will be pretty easy; where the migration is being executed for purely financial reasons, the benefit is the reduction in the run-rate of operating the equipment versus the cost of migration. Environmental and technological benefits tend to be more difficult to quantify, however. Spend time in evaluating the impact of making the change. Identify the benefits and the beneficiaries and help them develop your migration business case.

Example: Due to a merger, growth in email is expected to reach 100% in the next 12 months. Migrating email servers to a new storage array will provide double the capacity at the same run-rate cost by using new and faster HDD technology. The business case justifies the purchase and migration effort versus the increase in cost of extending the existing hardware.

In summary:

1. Establish and document the reasons for migration.
2. Develop a business case, highlighting the benefits of making the change.

The next few posts will cover how to achieve migrations and avoid many of the common issues that are encountered.

© Chris for Gestalt IT, 2009. | Data Migration Strategies – Part I
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Stephen has a post here about pricing, about getting close to your vendor and developing a relationship with just a few trusted partners. Nice idea but in any relationship there needs to be some tension to keep it fresh and alive; otherwise you find yourselves doing something because you have always done so, it becomes comfortable.

Now comfort is all very well at home and in your personal life but when you are spending lots of money (your lots will vary) with a vendor, comfort is not good. I have walked into situations where the position has been far too comfortable and ultimately it becomes dangerous for both parties. You need to shake things up once in a while.

1. Single vendor relationships are not good to drive value. Competition is key, this does not mean that every bid should be competitive, there aren’t enough hours in the day and everyone gets tired. But every eighteen months, pick a technology area and review it. Do both a technology review and a commercial review. Your review cycles may be shorter, it depends on your work load.
2. Review street prices regularly; there are a variety of sources for this, some formal, some informal. Vendors do not like it but they know it happens. But it is important to understand why prices differ; it could be size of organisation or it could be a prestige thing. Let your sales-man know that you are paying above street price and that you are reviewing things.
3. New requirements need to go competitive. A sign that things have got too comfortable is that you simply default giving new business to the incumbent.
4. Be aware of the market, talk to the incumbent about competitive products; let them know that you are aware of the competition. Attend trade-shows; talk to other vendors, I know sales-guys are irritating but when the incumbent phones up and finds you are in a meeting with their rivals, there will be a moment of doubt.

And when you are doing the deal, here’s a few tips and thoughts. I am not a procurement expert but I have spent a few million here and there on storage.

1. List price is meaningless; discount levels are meaningless. Vendors should produce a cost of manufacturer and then try to negotiate a premium on this. Vendors also hate breaking things down by line-item as it reveals that you are paying massive amounts for commodity items. Do not let a vendor flannel you with a cost for a solution, get it broken down and understand what you are paying for.
2. Maintenance; you should always be able to negotiate improved maintenance terms. Hardware maintenance is pretty easy to get extended gratis, software is often harder. Review maintenance regularly; if a piece of software is at or close to it’s terminal release, consider dropping the maintenance. If you really need it at a latter point, you can often re-instate, you’ll have to pay the back maintenance but you’ll likely not need it anyway. Make sure this is contractually agreed.
3. Technical refresh/take-out; if you are refreshing with the current vendor, only pay maintenance on one lot of kit whilst the refresh is happening. If you are refreshing with a new vendor, agree that the new maintenance/warranty period only starts when the migration is complete. Always try to negotiate a trade-in.
4. Software licensing; try to negotiate a pay for the amount you use as opposed to the pay for the whole frame!  And always try to agree that software licenses are transferable between frames.
5. A vendor TCO model is worthless unless they are willing to guarantee it without caveats. If they think their kit will save you money, skin in the game is key!
6. Training; I have had teams which have had more training than any other team in a department because I ensure that any deal is sweetened by the provision of training for ‘free’. Big deals should come with free training and I am amazed at the number of people who do not leverage this.
7. One-off-deals; one-off-deals, you know the end of quarter/year specials? We all do them, we all regret them at times. Plan your one-off-deals, you know they’re coming but treat them like a normal deal. You know when the vendor quarters/year-ends are; so try and align your procurement cycles if you can. And I’ve never had the pricing on a one-off-deal pulled because I have missed the cut-off.
8. Guaranteed price decline, the cost of kit goes down all the time; ensure that you’ve got a guaranteed price deflator on a quarter-by-quarter basis to reflect this.

You will not get all of the above but at least vendors will know that you are serious, that you are thinking about things. And if your sales-man agrees any kind of special, non-standard terms; get it in writing and keep the evidence. Sales-men move around a lot and the next guy may not honour a verbal, gentleman’s agreement; get the evidence.

I am sure there’s more tricks that I have forgotten or not even be aware of; please share!

© Martin for Gestalt IT, 2009. | Deal or No Deal?
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