To derive the most benefit from cloud storage, organizations must have an in-depth understanding of their IT environments and current state costs to make the best vendor and solution selections.
By Christopher Stacy and Michael Byrne
Cloud storage offerings abound in today’s IT marketplace. Original delivery models from 15 years ago continue to provide benefits to customers, and new breeds of cloud storage providers have entered the marketplace offering secure gateway services and specialized offerings for functional areas such as disaster recovery. Given these options, more companies than ever are finding value in migrating to the cloud. To maximize this value, organizations must ensure an in-depth understanding of their IT environments and current state costs to make the right vendor and solution selections.
From its beginning, cloud storage has offered a compelling value proposition, with object-based storage offerings, such as AWS and Google Cloud Platform, allowing the efficient delivery of storage objects to the cloud and providers continually reducing unit costs for the immediate benefit of customers. Customers are able to increase their provisioning flexibility and timeliness, allowing internal operations groups to gain faster access to more storage. Additionally, enterprises maintain contractual flexibility through deals that, although rigid in their terms, require few commitments and minimums.
Historically, not all enterprises have taken advantage of these benefits, often due to concerns about security. However, recently storage providers offering secure gateway connections have enhanced available storage offerings with onsite caching, data encryption in-flight and at rest in the cloud, in-line compression, and local and global deduplication. These providers often leverage one of the original commercial cloud providers and its bulk pricing. Also, providers have become specialized in specific services delivered from cloud-based infrastructures—specifically, disaster recovery, backup and restore, and archiving have become available as very cost effective point solutions to traditional infrastructure environments.
Within the vendor landscape of cloud storage and gateway providers, myriad cost structures and availability service levels exist. Cloud storage may be charged per GB per month based on availability tier, per GB transferred out of storage, and/or per Get/Put request. Cloud storage may also be charged based on an all-in per TB per year service charge or on a per gateway appliance fee (physical or virtual) plus backend cloud use per TB per month (possibly requiring customers to additionally contract directly with the cloud storage provider).
Given the variety of cost drivers, customers need to understand the details of their existing IT landscapes to develop accurate total cost of ownership models. Specifically, they should become familiar with how their legacy applications interact with storage systems, backup and restore routines, data archives, and disaster recovery systems. They must also assess current state costs, both internal and outsourced, of providing the storage environment. They need to know if the current storage systems are near end of physical life or contract term, may require upgrades to meet current or anticipated business system needs, or have specific file system requirements (e.g., need to support a global namespace of shared files).
With an understanding of internal operational metrics and costs, enterprises can select cloud storage and/or gateway providers that best match their needs. For instance:
· If resources and technology are currently in budget to support encryption, compression, and deduplication, then these costs may be deferred to a cloud gateway provider (cloud gateways with deduplication replace onsite backup/restore appliances with deduplication capabilities)
· If an enterprise is storing multiple copies of files in different locations, then cloud storage with global namespace can allow multiple geographies to access a single copy of data, thereby facilitating global deduplication and reducing WAN synchronization traffic
· Depending on the age of the internal storage architecture, future capital expenses may be avoided, converting capital expenses to operating expense outlays on cloud storage and gateway services
· If local caching of data structures with permanent cloud storage of less frequently accessed files meets business needs, then entire NAS systems may be cost effectively replaced by cloud-based systems
Cloud migrations, with or without gateway services, should be considered carefully. Not all enterprises are good candidates for migration. Customers with less reliance on file storage and more reliance on block storage are less likely to significantly benefit from a cloud storage business case. Internet connectivity must be assessed, and potentially upgraded, to ensure the necessary data transmission rate can be supported (which is becoming less of an issue as organizations upgrade their networks). If an enterprise has unique requirements related to performance (availability), security (on premise, private infrastructure for HIPAA, FISMA and PCI), or compliance, then cloud storage from certain suppliers may be required and customized to the point where the cost benefit is unfavorable.
Cloud storage can offer significant cost savings and functionality benefits depending on the operational characteristics of an enterprise’s IT storage environment. To confirm and maximize the breadth of these benefits, enterprises must take a best practice and nuanced approach for estimating prospective cost savings and validating the ultimate decision to migrate to the cloud.
About the Authors
Christopher Stacy is a principal and Michael Byrne is a senior associate at Pace Harmon, an optimization and outsourcing advisory services firm providing guidance on complex transactions, process and operational optimization, and provider governance.
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