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TCO Example 

Servers with QuodCelior vs. Servers with Direct Attached Storage (DAS)
There are two types of costs associated with purchasing new servers and storage. The first and most easily recognizable are the hard, or direct, costs. These costs bear directly on the IT budget and include capital spending, labor, outsourcing, professional services, support contracts, and training. Hard costs are usually out-of-pocket expenses at the time of purchase of new storage.

The second type of costs - soft, or indirect - are less tangible, and often hidden. They typically result from reduced staff productivity or lost business revenue when a system goes offline, such as for an upgrade, for repairs, or to accommodate large backup windows. Both hard and soft costs must be considered when calculating total cost of ownership (TCO) for any IT investment.

What follows is an analysis of what a typical company would go through in planning to purchase servers with DAS or servers with the QuodCelior, including how the company would calculate TCO for their various IT investment options.

Hard Costs
- Total acquisition cost
- Total annual administration cost
- Total capacity utilization

Soft Costs
- Storage availability
- Cost per downtime hour (based on estimated downtime)
 

Administrative Costs
The storage management ratio between DAS and QuodCelior is 5:1, meaning it takes five times as many administrators to manage DAS storage as the same amount of QuodCelior storage. Additionally, one administrator can manage a maximum of 4800GB of QuodCelior storage. Using the 5:1 DAS to QuodCelior ratio, one administrator can manage 960GB of DAS storage.

Capacity Utilization Costs
Based on the finding of the Merrill Lynch/McKinsey study that a SAN is far more efficient than DAS in using available disk space, 85 percent versus 50 percent disk utilization, respectively a company doing a TCO analysis like this would calculate that a SAN provides 35% more storage available for future growth.

Soft Costs
The primary factor used to determine soft costs in an analysis such as this is unplanned downtime. To calculate downtime, a company would review the reliability of its DAS system over the past year. Such a review in this sample analysis reveals 70 hours of unplanned downtime (5.8 hours per month), for 97.8% availability (based on 12 hours a day, 5 days a week). Based on industry data on SAN availability, a company could reasonably estimate that a SAN would experience only one hour of unscheduled downtime per year, for an overall availability of 99.96%. Thus, a company doing this analysis would base its soft-cost calculations on 97.8% uptime for a DAS and 99.96% uptime for SAN.

To determine the cost of downtime, a company doing this analysis could use the industry downtime cost estimates in "IT Performance Engineering & Measurement Strategies: Quantifying Performance Loss," an October 2000 report by the Meta Group. This study showed the average revenue lost per employee-hour for a 2,000-employee company was 248.65, and the loss totaled 497,300 if all systems went down during peak work hours. A company doing this calculation could assume that unplanned downtime would affect only 5% of its work force (a conservative estimate) and thus cost it 24,865 per hour.

The table below shows total cost of ownership (TCO) for the first year of a SCSI DAS deployment versus the QuodCelior. Because the revenue lost per employee-hour is subjective  and the Capacity Utilization (depends on a variety of business specific variables) we have decided not to include the financial impact in the following table.
 

CONCLUSION
A thorough calculation of all hard costs has shown that, while servers with a traditional SCSI DAS deployment has the lowest acquisition cost, it bears a much higher total cost of ownership (TCO) than servers in combination with a QuodCelior.

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