Get the Most of your Storage Choices by Comparing the ROI’s

If you are a CIO of a SME (Small and Medium Enterprise) or the IT manager in a startup, you might want to think twice before investing in a traditional tape or disk back up option. This is because the advent of the cloud computing paradigm has meant that it is fast emerging as an attractive option not only for Software as a Service but also for data backup and recovery.

Of course, chances are that you might not realize the relative advantages and disadvantages of traditional storage versus the cloud option till you compare their ROI’s (Return on Investment). For this to happen, you need to be aware of the costs of each option along with the benefit that you are getting from each. For instance, a typical tape backup option for 2 Terabyte storage with an annual growth of 30% might cost you around $37,500 along with a manpower investment of around 400 IT hours. On the other hand, a cloud based option might cost you around $12,000 per annum with a manpower investment of 30 IT hours. Mind you, these figures are at actual costs and have been calculated using an ROI calculator.

However, before you jump to the conclusion that cloud is any day better, ponder for a moment as to whether there are any hidden costs that you might incur. For instance, many cloud providers charge you for transactional expenses which are a derivative of how much data you send over the network. And when one is talking about humongous amounts of data, it makes sense to include this cost in the calculation as well.  Of course, there are many cloud providers are still hazy about this aspect and hence this can become an unknown. However, calculating ROI is more of an art than a science and especially so when you are comparing the returns for tape and traditional options with cloud based options.

The point here is that one needs to make educated guesses and with a bit of accuracy, you might get a fair idea of how much it costs. Further, when data storage is guaranteed to be plentiful then users have a tendency to store more and these jacks up the data that is being sent over the network and into the cloud.

The moot aspect to be noted here is that one might not be making a strict apples to apples comparison when calculating and comparing ROI’s and this is where one needs to be resourceful. The subjective aspect of the comparison comes into the picture as well since tape backup is a labor intensive and logistics dependent mechanism whereas a pure cloud backup is transparent and completely virtual. So the aspect that one needs to consider into the equation is whether the ROI for the cloud backup option should include the elimination of most part of the labor involved into the benefits tab. Without considering the other aspect of having a cloud backup of a cloud backup as a cost this equation is incomplete. The reason for this addition is that many cloud providers do suffer downtimes and outages and hence a failsafe backup would also consider alternatives. Further, there is a need to factor in the transition aspect as well as the fact that training of the IT personnel needs to be taken up to migrate from a tape based backup option to a cloud based one.

An ROI calculation for the cloud backup and recovery option would necessarily have to be done from the perspective of tallying the costs individually and then weighing them against the benefits of going in for that option. The question to ask here is whether your SME or Startup is generating the volumes that are required for cloud based backup options to be feasible. Finally, one needs to weigh in the possibility of choosing an established cloud provider with an emerging one given the reliability and security aspects of this. In conclusion, calculating the ROI is the first step before a true blue analysis of the options can be undertaken. Hence, proceed with due caution and care and include the unknowns along with the knowns.

Tagged as: CIO, cloud, Cloud back up, Computing, Cost, data, IT, Preetam Kaushik, ROI, SME, Startup, Storage