Total Cost of Ownership Analysis

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1 Total Cost of Ownership Analysis

2 Abstract A total cost of ownership (TCO) analysis can measure the cost of acquiring and operating a new technology solution against a current installation. In the late 1990s, Gartner Group estimated the cost of operating a unit of primary storage could be five or more times the initial cost of acquisition, which highlighted the importance of an accurate TCO analysis for enterprise storage buying decisions. The cost of operating secondary storage for data protection also dwarfs the initial acquisition price by three to four times. This white paper identifies the components required for an accurate TCO analysis. Furthermore, three data protection scenarios will contrast the total cost of ownership for a tape backup solution with Avamar Axion, the industry s most efficient disk-based data protection solution: Case 1: Small Enterprise (1.5TB of primary data) Case 2: Medium Enterprise (10TB of primary data) Case 3: Large Enterprise (50TB of primary data) In addition to this white paper, Avamar has developed a tool for determining the TCO for tape versus disk-based backup for a specific environment. Please contact your Avamar representative for an analysis tailored to your environment. 2

3 Overview When considering a disk-based data protection solution, it is important to include the following cost factors in a TCO analysis: Acquisition of new hardware and software Annual hardware and software maintenance Operational media Staff administration Network communications (especially wide area network usage) Where offsite data storage is a consideration, the analysis should include the following cost elements, when applicable: Offsite vaulting Disaster recovery service (second site hardware, software and staff) Additional media requirements Disaster recovery tests or reviews Network communications When comparing a disk-based data protection solution to a tape-based solution, the value of improved restore times and increased reliability can be substantial. Enterprises continue to pay hidden costs for lost productivity due to long restore times or worse, the cost of reconstructing data for restores abandoned or never initiated due to the limitations of tape backup. Annual data protection costs range from $30-$300/GB, while data reconstruction costs are typically estimated to be much higher, in the range of $900/MB. In some environments, the need for regular restores necessitates expensive layers of redundancy that can quickly inflate the total cost of data protection for an enterprise. A separate means to evaluate the value of fast restore apart from other cost considerations is outlined later in this white paper. A Market View According to a recent study conducted by The Taneja Group, many enterprise customers do not calculate their actual data protection costs or their actual success rate in performing backup and restores. Traditional data backup systems cost up to $100/GB per year, according to Avamar studies. Using a more conservative cost estimate of $60-$80/GB per year, this white paper compares an average market view cost of ownership for tape solutions versus Avamar Axion, the industry s most efficient disk-based data protection solution, for three business cases: a small, medium and large enterprise. Avamar Axion provides customers with the value of backup, remote replication and suffecient communications necessary to accomplish remote replication for the cost of local tape backup alone 3

4 Market Assumptions Tape backup solutions create multiple redundant copies of primary data due to the inherent limitations of tape as a serial medium and the need to increase the reliability of data restores. Most enterprises back up all data in any particular server once per week, although some enterprises perform this process more frequently. This backup is called a full, and it contains a complete copy of all the data in the system at that point in time. On all other days of the week, incremental backups are preformed. These backups contain copies of only those files that have changed. To restore data, the last full backup is restored and then any intervening incremental backups are applied. To avoid reliability problems and reduce restore times, most enterprises perform cumulative incremental backups. Cumulative incremental backups collect and store copies of all the files that have changed since the last full backup was taken. Some solutions also offer an incremental forever approach, where the data protection system can rebuild a virtual full from an initial full and the incremental backups. On average, enterprise systems have a daily file change rate of 3% per day; as a result, cumulative incremental backups range from 3% on day one to almost 18% on day six, with a daily average over 10% (this white paper uses an average of 10% in the TCO calculations). Over the course of one week, a set of one full and six incremental backups results in 1.6 times the amount of primary data storage per week. Enterprises also decide how many weeks of full and incremental backups to maintain in automated libraries for near-line restore. Tapes rotated out of a library must be recovered from onsite or offsite storage, prolonging restore times. Enterprises, on average, leave between one and two months of data in the library, sometimes combined with a set of clones (copies) of the latest full backup in case the first set of tapes is corrupted. For medium and large enterprises, this white paper assumes six to seven weeks of near-line retention or about 10 times primary data storage. For small enterprises, who often maintain less data in near-line storage for cost reasons, this white paper assumes two weeks of data in near-line storage or 3.2 times primary data storage. By maximizing its use of disk storage technology, Avamar Axion provides customers with efficient full backups that are smaller than traditional tape incremental backups, eliminating the concept of incremental backups. Avamar has tested the Axion solution in over a hundred environments; with remarkable consistency, Axion finds the initial level of redundancy across files and systems is between 40% and 70%. For example, with 100TB of primary storage, the initial backup can be stored in 30-60TBs. This initial redundancy or commonality depends on how homogeneous the original systems are; for instance, a set of 10,000 Windows laptops can sometimes exceed 70% initial redundancy. This white paper assumes an average initial redundancy of 55%. 4

5 Commonality for daily backups is significantly higher. For Windows systems, commonality generally ranges between 99.5% and 99.8%; for Solaris and Linux systems, commonality ranges between 99% and 99.5%; and for highly active Oracle database servers, the commonality may be as low as 95%. This white paper assumes daily commonality of 98.9% (each day s full backup is 1.1% of the primary data being protected). Additional assumptions are as follows: 1. All hardware and software is calculated at list prices. Hardware configurations are detailed separately; tape backup software pricing is based on configurations from market-leading, enterprise backup software vendors. 2. Tape library configurations are ½ full of drives and ½ full of media at acquisition. 3. Hardware support is 15% of list price per year. 4. Software support is 20% of list price per year. 5. Tape media cost is based on a 100GB tape cartridge at $ Administrative staff efficiency is based on an analysis performed by Giga Group in 2002, evaluating the benefits of disk-based vs. tape backup systems in a number of customer environments The average, fully burdened cost of a storage administrator is $75,000 per year. 8. All hardware and software is depreciated/amortized over three years. 9. All costs are normalized $/GB per year, averaged over three years. 10. Pricing for wide area network (WAN) costs is included when backup data or replication data is transferred over a WAN (see figure 1). WAN costs used in this TCO analysis represent an average of cost quotations we have solicited for bandwidth ranging from fractional-t1 to OC3. Note: although individual enterprises will find some variability in the cost components of the following scenarios, several real-world analyses have yielded consistent overall results. Figure 1 1 September 2002: Giga Group: The Total Economic Impact of Deploying Network Appliance Nearstore Product for Backup and Recovery. 5

6 Case 1: Small Enterprise Small Enterprise (2TB Data) In a study published by Garner Group in 2003, Gartner described a mid-tier enterprise as a company with $50-$500 million revenues and employees. Gartner found that nearly 90% of the companies had less than 1.5 TB of data under management. This small enterprise case can also be applied to independent departments within larger enterprises. Figure 2 Tape hardware costs (see Figure 2) include one entry level tape library, with 5TB of slot capacity and two LTO Generation 2 tape drives. The backup software costs include support for ten client systems. An entry-level server is included as the backup server. The Avamar solution is a standard Axion E configuration, an easy-toinstall data protection appliance with 1.5TB of usable storage and software licenses for ten client systems (see Figure 3). A summary of the comparative costs for this scenario can be found in Table 1. Figure 3 Table 1: Cost Comparison Small Enterprise, Backup Only Tape Costs Axion Costs Cost Elements Cost per Year $/GB per Year Cost per Year $/GB per Year Hardware/Software $18,350 $12 $15,000 $10 Support $ 8,250 $ 5 $ 4,500 $ 3 Staffing $30,000 $20 $ 7,500 $ 5 Media $ 2,500 $ 1 $ 0 $ 0 Total $59,100 $38/GB year $27,000 $18/GB year The Axion system can provide online restore capability at less than half the total cost of a similarly sized tape backup system. In addition, while the tape library is sized to hold only two weeks of active data, the Axion system is sized to hold a minimum of seven weeks (or significantly longer with the advanced retention policies available with Axion). All data stored in the Axion system over this period is online and available for immediate restore. Even if the enterprise already has a fully depreciated, installed tape system, the savings in maintenance, media and staffing alone will support the cost of acquiring and operating a new Axion E system. 6

7 Small Enterprise Backup and Offsite Data Storage Large enterprises routinely move data offsite for disaster recovery, but Gartner Group discovered that 49% of mid-tier enterprises do not move their data offsite at all due to cost constraints. In this scenario, two items are added to the tape costs: additional tape media and transportation/warehousing of offsite media. With its remarkable efficiency, Axion offers small enterprises an affordable offsite solution over a wide area network (WAN). In the Axion case, all data can be efficiently replicated on a scheduled basis to a second Axion E system at a second site, adding the following costs: a second Axion E, Axion Replicator software and the cost of WAN communications. A comparative summary of the costs can be found in Table 2. Table 2: Cost Comparison Small Enterprise, Backup and Replication Tape Costs Axion Costs Cost Elements Cost per Year $/GB per Year Cost per Year $/GB per Year Hardware/Software $18,350 $12 $35,000 $23 Support $ 8,250 $ 5 $10,650 $ 7 Staffing $30,000 $20 $ 7,500 $ 5 Media $ 2,500 $ 1 $ 0 $ 0 Offsite Media $ 2,000 $ 1 $ 0 $ 0 Transport./Vaulting $ 2,000 $ 1 $ 0 $ 0 WAN Comm. $ 0 $ 0 $ 7,500 $ 5 Total $63,100 $40/GB year $60,650 $40/GB year Even with the additional cost of a second Axion system, Axion Replicator software and a T1 WAN line, the total cost of backup and nightly electronic replication with Axion is the same as tape backup with offsite data movement by truck. With Axion, a small enterprise that pays for offsite tape vaulting can actually afford full electronic replication, with the added benefit of immediate, online restores. Key point: Axion s efficiency enables a small enterprise to have both online backup and restore AND offsite replication for the same cost as traditional tape backup and offsite archiving by truck. For even greater cost savings, a single Axion E system can be installed at an offsite location, separated from the primary servers, in order to provide offsite data protection without the cost of a second Axion E. Backups then occur across the WAN, adding only $5/GB per year for a total cost of $23/GB per year. An enterprise can begin with this approach and eventually migrate to a dual Axion E implementation as budgets allow. 7

8 Case 2: Medium Enterprise Medium Enterprise (10TB Data) With its focus on timely restores, a medium enterprise will typically hold up to two months of full and incremental tape backups in the library or about ten times the capacity of primary storage. The Avamar configuration is a standard Axion M, a highly scalable data protection solution, configured to support 10TB of primary data, with a minimum retention period of seven or more weeks. A summary of the comparative costs can be found in Table 3. Table 3: Cost Comparison Medium Enterprise, Backup Only Tape Costs Axion Costs Cost Elements Cost per Year $/GB per Year Cost per Year $/GB per Year Hardware/Software $220,000 $22 $197,000 $20 Support $105,450 $11 $106,150 $11 Staffing $150,000 $15 $ 40,000 $ 4 Media $100,000 $10 $ 0 $ 0 Total $575,450 $58/GB year $343,150 $35/GB year The cost of providing data protection with Axion, with its full online restore capability, is significantly lower than acquiring and operating a tape backup environment. Medium Enterprise Backup with Replication The vast majority of medium enterprises send archival copies of their backup data offsite by truck. In addition, they frequently invest in high-cost synchronous data replication systems for their mission-critical data. Axion provides these enterprises with an affordable means to replicate all of their data offsite for disaster recovery. A cost comparison is provided in Table 4. Table 4: Cost Comparison Medium Enterprise, Backup and Offsite Replication Tape Costs Axion Costs Cost Elements Cost per Year $/GB per Year Cost per Year $/GB per Year Backup cost $ 615,450 $ 62 $343,150 $34 2 nd site hw/sw/spt $ 330,000 $ 33 $300,000 $30 Media $ 20,000 $ 2 $ 0 $ 0 Staffing (50%) $ 75,000 $ 8 $ 30,000 $ 3 Communication $ 600,000 $ 60 $150,000 $15 Total $1,640,450 $165/GB year $823,150 $82/GB year 8

9 As shown in Table 4, the network cost of transferring all tape backup data can be cost prohibitive. Enterprises that replicate their tape backup data to a second site also need a second set of hardware and software to use as a disaster recovery system. Including support, this amounts to an additional $33/GB per year. Because this site is for disaster recovery only, not daily file recovery, a much smaller set of media is required (approximately two full copies of primary data or $2/GB per year). Key point: At $67/GB per year, Axion makes electronic replication of all backup data to a second site affordable for the medium enterprise. Remote Branch Office Backup Medium enterprises often face another backup challenge: remote branch offices. Due to cost-prohibitive network pricing, remote branch offices are often forced to independently manage backup and recovery, which often create inconsistencies in data protection coverage across an enterprise. Axion s unique network efficiency provides enterprises with a new and cost-effective solution for remote branch office data protection. A cost comparison is provided in Table 5. Table 5: Cost Comparison Medium Enterprise with Remote Branch Offices, with 2TB of remote data and 8TB of data in the data center Tape Costs Axion Costs Cost Elements Cost per Year $/GB per Year Cost per Year $/GB per Year Backup cost, local only $ 615,450 $ 62 $343,150 $34 Communication $ 425,000 $ 43 $ 40,000 $ 4 Total $1,040,450 $105/GB year $683,150 $38/GB year Even if a medium enterprise only sends incremental backups from its remote branch offices, Axion still provides significant savings in network costs, making it cost effective to protect data stored in remote branch offices over a WAN. Key Point: Axion is of greatest value to customers with widely distributed infrastructure. TCO ($/GB-Yr) $120 $100 $80 $60 $40 $20 Tape Incremental Backup Axion $0 0% 5% 10% 15% 20% 25% 30% Percent of Total Data Remote from Data Center 9

10 Case 3: Large Enterprise Large Enterprise (50TB) Large enterprises face the greatest backup and recovery challenges. The total cost of backup and offsite replication is outlined in Table 6. Table 6: Cost Comparison Large Enterprise, Backup and Offsite Replication Tape Costs Axion Costs Cost Elements Cost per Year $/GB per Year Cost per Year $/GB per Year Hardware/Software $1,050,000 $21 $ 860,000 $17 Support $ 347,500 $ 7 $ 461,000 $ 9 Staffing $ 750,000 $15 $ 188,000 $ 4 Media $ 500,000 $10 $ 0 $ 0 Shelved Media $ 200,000 $ 4 $ 0 Total Backup $2,847,500 $57/GB year $1,509,000 $30/GB year 2nd site HW/SW/Supp. $1,050,000 $21 $ 679,000 $14 Staffing (50%) $ 375,000 $ 8 $ 94,000 $ 2 Communications $2,300,000 $46 $ 365,000 $ 7 Total Backup & Repl. $6,572,000 $132/GB year $2,647,000 $53/GB year As Table 6 shows, the return on investment for the largest enterprises is the most dramatic. These enterprises are able to maximize Axion s value, particularly its ability to replicate all backup data to a second site. Many of these enterprises have already invested in synchronous data replication systems to provide immediate offsite data protection and business continuity for their mission-critical systems. Axion does not replace this functionality. Axion does, however, provide these enterprises with the ability to affordably replicate all of their data offsite electronically for immediate online restore. These enterprises also benefit from economies of scale in the cost of communications. Key Point: Axion provides large enterprises with the ability to affordably maintain all backup data online for immediate restore. More importantly, Axion allows large enterprises to maintain all their backup data offsite on hard-disk storage for immediate restore in case of site disaster. 10

11 Building a Case for Fast Restores Unlike data stored on tape, data from Axion is immediately available for restore by an administrator or, if authorized, directly by end users. With a tape system, the tapes must either already be in the library, or they must first be retrieved and then loaded into the library; then the full and incremental backups must be serially restored. As a result, restores from a tape system take far longer on average than restores from a disk-based data protection system, which results in greater down time and lost productivity. In fact, even traditional tape software vendors suggest using a disk-staging area to speed restores, and they use the difference in restore latency to justify the cost of the additional hardware and software. The most aggressive TCO models attach a lost opportunity or lost revenue cost to restore times, which can help justify even the installation of very expensive primary replication solutions. A more conservative approach is to translate prolonged restore times into an employee expense, which is based solely upon the lost productivity of the affected employees. Research by Avamar indicates that on average, organizations perform one restore per week for each terabyte of managed data. Each of these restores impacts two employees, with a four-hour, average wait time. Assuming a user is assigned a fully burdened cost of $94,000 per year, each hour of productivity lost can be assigned a cost of $50 per hour. Given these assumptions, tape-based solutions have an additional, hidden cost of $20/GB per year versus disk-based solutions. Consequently, restore latency represents an additional 20 to 33% increase in the cost of tape backup for the enterprise. This cost is in addition to the costs outlined in Tables 1-6 above. According to several industry studies, even enterprises who have not quantified the value of faster restores are clearly aware this value exists, which helps to explain the growing demand for disk-based data protection solutions. Summary: the Value of Axion In early 2003, InfoStor Magazine surveyed its readers, asking how many of them planned to add disk technology to their backup model. 63.6% indicated yes. By the fall of 2003, over 42% planned to move at least some of their backup data to disk storage. By early 2004, Enterprise Storage Group found 24% of their surveyed customers were using a combination of disk and tape, and an additional 17% were using disk alone. A clear trend is emerging. Enterprises are seeing the value of diskbased backup in faster, more reliable backup and restore. Axion exemplifies the driving values of this trend. While customers are willing to pay more for disk-based solutions, a financial cost of ownership analysis shows that Axion quickly pays for itself. With Axion, small, medium and large enterprises can have the value of online backup, online restore and electronic offsite replication all for the cost of tape backup alone. 11

12 Headquarters Avamar Technologies, Inc. 135 Technology Drive Suite 100 Irvine, California For more information about Avamar products, call Avamar ( ), or visit our web site at Avamar Technologies, Inc. All Rights Reserved. Avamar, Avamar Technologies, the Avamar logo, Axion, RAIN, AvaSphere and Snapup are trademarks or registered trademarks of Avamar Technologies, Inc. in the US and/or other countries. All other product names and/or slogans mentioned herein may be trademarks or registered trademarks of their respective companies. All information presented here is subject to change and intended for general information. Printed in the USA. 12

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