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1 Global Headquarters: 5 Speen Street Framingham, MA USA P F W H I T E P A P E R D e m o n s t r a t i n g t h e B u s i n e s s V a l u e o f D e d u p l i c a t i o n f o r D a t a P r o t e c t i o n Sponsored by: Quantum Randy Perry December 2011 Laura DuBois E X E C U T I V E S U M M A R Y A central tenet of today's storage implementations and planning is the use of data deduplication. Deduplication is a technology that dramatically improves IT economics by minimizing storage requirements, backup windows, and network bandwidth consumption in distributed enterprises and datacenter locations. Today, deduplication is accelerating backup and recovery efficiency and driving down IT costs. This white paper looks at the business value of deduplication among a range of Quantum customers. It also highlights Quantum's portfolio of data protection offerings for backup and recovery and explores specific customer cases with their real-world backup efficiency gains and cost reductions. As part of this business value study, IDC interviewed 11 Quantum customers using Quantum DXi deduplication solutions. Customers reported high levels of satisfaction and experienced considerable benefits from the Quantum solutions, including cost reductions, backup performance improvements, and increased staff productivity. Highlights of the ROI analysis are as follows: Typical data reduction ratios of costly primary disk through the use of Quantum's variable-length deduplication technology were 15:1 or 93%. Companies were able to optimize utilization of data storage media, saving an average of 93% as a result of deduplication, accounting for $412,000 per year ($22,670 per 100 users). IT storage staff productivity increased by 61%, saving $282,000 per year ($15,515 per 100 users). Reducing downtime, shortening restore time, and eliminating backup spillover yielded user productivity savings of over 3,100 person-hours annually for each organization, contributing $166,000 per year ($9,131 per 100 users). Over three years, Quantum customers in this study enjoyed benefits of over $2.6 million ($111,853 per 100 users), or returns of $4.75 for every $1.00 invested, and a payback in 6.2 months.
2 S I T U A T I O N O V E R V I E W Recent IDC studies reveal that firms today are dealing with an average of 50% annual data growth. To keep up with this growth, IT organizations are often forced to increase the percentage of their overall IT budgets allocated to storage. More storage capacity has further implications on datacenter facility costs, including power, cooling, and floor space requirements. This data growth and infrastructure sprawl have had a significant negative impact on IT organizations' ability to back up and restore data and systems rapidly enough to meet corporate mandates. While storage infrastructure grows, the compute environment continues to consolidate. The proliferation of virtual infrastructure across firms of all sizes offers benefits of server consolidation, improved resource utilization, and increased mobility. However, the use of server virtualization further exacerbates the problems associated with today's backup environments. Storage and virtual infrastructure teams deal with I/O and network resource contention during backup periods. The increased rate of I/O, network resource contention, and bandwidth sharing can have a negative impact on successful and timely backups. As firms consolidate their server infrastructure and upgrade their networks and storage mechanisms for virtual compute environments, they are also increasingly rearchitecting their backup approaches to address these challenges. As part of the scoping and evaluation of new backup architectures, firms are increasingly investing in storage efficiency technologies such as deduplication. Deduplication technology addresses many of the long-standing backup challenges that firms large and small have been dealing with for over a decade. These challenges have included keeping up with the doubling of data every two to three years, meeting shorter backup windows, and enabling faster recovery from operational and disaster-related failures. I n v e s t m e n t s i n D e d u p l i c a t i o n The demand for data deduplication is escalating as firms look for ways to keep pace with the rate of annual storage growth. This growth is fueled by new applications, the proliferation of virtualization, the creation of electronic document stores and document sharing, the use of Web 2.0 technologies, and the retention or preservation of digital records. With constrained IT budgets, the need to curb data growth is heightened as firms look to reduce capital and operating costs. From a physical perspective, many datacenter managers are also dealing with limited infrastructure in terms of power, cooling, and floor space. Finally, Quantum's variable-length deduplication is allowing end users to reduce the amount of costly primary disk required to protect and access their information by 15:1 or 93%. This dramatically improves ROI and time to payback of initial investments. Deduplication is a technology that not only aids in accelerating storage efficiency by reducing cost but also alleviates physically constrained datacenters. Deduplication also addresses challenges associated with management, backup, and network inefficiency. As data grows, there is an increasingly disproportionate relationship between the number of IT personnel and the amount of storage requiring management. Deduplication reduces the data footprint, keeping this ratio in balance. Similarly, as the gap between server processing power and the burgeoning growth in 2 # IDC
3 data continues to widen, firms are looking for ways to improve performance throughout their environment over a WAN, within disk storage subsystems, and across limited backup windows. Data deduplication technology can optimize available physical and virtual infrastructure by sending less data over local or remote network links. It can also improve service-level response times and help meet shrinking backup windows. Deduplication also makes use of random access media (disk), improving recovery times, data security, and reliability. Table 1 shows backup challenges and the benefits of deduplication. T A B L E 1 B a c k u p C h a l l e n g e s a n d t h e B e n e f i t s o f D e d u p l i c a t i o n Backup Challenges Backup windows are shortening as operations run 24 x 7 to meet global customer demands. Recovery times are becoming shorter to minimize the cost of downtime. Reliability of backups leaves data recovery at risk. Increased server virtualization means fewer resources are available for backup, which can increase backup times and stress backup windows. Data growth means not all data can be backed up in available backup windows. Secure offsite copy using traditional tape methods leaves data at risk due to loss or theft. Distributed data in remote branch offices needs centralized protection and recovery. Backup infrastructure costs are increasing to keep pace with capacity growth and backup windows. Deduplication Benefit Traditional backups mean the transfer of vast quantities of redundant data, which can overrun tight or nonexistent backup windows. Deduplication can reduce the amount of data that needs to be backed up, or fast inline deduplication storage systems can speed the performance of the backup target. Deduplication reduces the cost of storing more backup data on disk and significantly improves recovery times over traditional tape-only methods for a broad set of applications. Deduplication uses disk as the first stage in the data protection process, eliminating or reducing fault conditions associated with poorly monitored removable media. Leveraging disk also facilitates health checks and other self-healing or failure prevention measures. Deduplication can be used to eliminate shared resource processing of redundant data, reducing contention for physical resources and speeding virtual machine backups. Deduplication also allows longer retention of virtual machine backup data on a much smaller storage footprint, ensuring that operational recovery can happen quickly from disk. Firms face an average of 50% annual growth in the amount of data requiring protection. This growth is at odds with limited nightly backup windows and traditional methods. By allowing first-stage backup and restore to occur on disk, deduplication addresses this growth challenge by providing increased backup and restore throughput. Deduplication, in concert with secure replication processes, enables an electronic copy to be kept offsite, reducing the overhead associated with manual transport and storage of removable media and improving security. Remote branch locations are replacing traditional local backup resources with a centralized edge to core backup approach for improved backup, recovery, and management. Deduplication makes the process of sending large volumes of backup data over congested WAN links to a centralized datacenter feasible. Most firms deal with data growth and backup window challenges by putting more tape infrastructure in place. Adding tape drives and automation may address current performance bottlenecks and facilitate backups more quickly but with cost and management overhead. Source: IDC, IDC #
4 Q U A N T U M ' S D E D U P L I C A T I O N P O R T F O L I O The Quantum DXi-Series deduplication appliances provide scalable protection for small and medium-sized businesses and distributed enterprise systems to core datacenter environments. Quantum's open systems solutions are designed to provide storage efficiencies and cost savings while minimizing risk and protecting prior investments. They include DXi-Series disk-based deduplication and replication systems for fast backup and restore, Scalar tape automation products for disaster recovery and long-term data retention, StorNext data management software and appliances for high-performance file sharing and archiving, and vmpro solutions for protecting virtual machine data. Customers interviewed for this study cited the business benefits of deploying the Quantum DXi deduplication appliances. Those benefits are captured quantitatively and anecdotally in the following sections of this paper. B U S I N E S S V A L U E S t u d y D e m o g r a p h i c s In the summer of 2011, IDC interviewed 11 organizations that had deployed Quantum's deduplication solutions. They are small to medium-sized organizations with an average of 1,068 employees (see Table 2). Most organizations had high IT user to employee ratios (94%), and the schools included in the study had 4.4 students per employee, so that the average number of IT users exceeded the average employee count (1,833). The study base represents a broad range of experiences from organizations across North America and Europe, from industries including construction, education, financial, healthcare, manufacturing, media, and transportation. The interviews were designed to elicit both quantifiable and qualitative information so that IDC could interpret the full impact of Quantum solutions. T A B L E 2 D e m o g r a p h i c s Category Average Employees 1,068 IT end users 1,833 TB of storage 61 Annual growth rate for storage 41% IT staff 21 Source: IDC, # IDC
5 ($ per year per 100 users) B E N E F I T S A N A L Y S I S The organizations in the study selected Quantum to resolve specific problems they were having with backup and restore operations. Quantum had the right solution at the right price. From the interviews, IDC was able to measure the economic impact of deploying Quantum deduplication solutions. Overall, the organizations recognized financial benefits from the following areas: Reduced storage costs. Deduplication enabled a more efficient storage environment, lowering capex and opex costs directly associated with storage media by $22,670 per 100 users per year (see Figure 1). Optimized IT efficiency. By reducing the time the IT staff spent dealing with storage management for servers, media management, and backup activities, organizations were able to save $15,515 per 100 users per year in IT labor costs. Enhanced end-user productivity. End users benefited from reduced disruptions from backup, recovery, and restore times as well as better server performance, saving $9,131 per 100 users per year. F I G U R E 1 A v e r a g e A n n u a l B e n e f i t s p e r U s e r s 50,000 45,000 40,000 35,000 30,000 25,000 20,000 15,000 10,000 5,000 0 $47,316 $22,670 $15,515 $9,131 Storage environment cost savings IT staf f productivity optimization End-user productivity enhancement Source: IDC, IDC #
6 O p t i m i z e d I T S t a f f E f f i c i e n c y IT organizations today run very lean really to the bone. This aspect is a result of years of staff cutbacks in response to declining revenue and more competitive pressures. The companies in our study average 83 users per IT staff overall and 1,060 users per storage management staff. The problem is that the amount of storage doubles every two to three years; therefore, unless organizations are willing to increase their overhead (IT staffing) by similar ratios, they must invest in technology solutions. A deduplication solution that reduces the amount of time that IT has to spend managing storage and storage-related operations enables a company to do more with less and avoid expansion. Table 3 shows that organizations in the study were able to reduce the time IT staff spent on management and support tasks by 61%. T A B L E 3 I T E f f i c i e n c y S a v i n g s Before After Savings % Improvement Time to recover (hours) Time to restore (hours) Backup window (hours) Backup failure rate 28% 3% 25% 91 Storage provisioning/allocation (FTEs) Managing backup (FTEs) Server admin for storage (FTEs) Tape management (FTEs) Managing capacity (FTEs) Uploading or reloading data (FTEs) Adding new applications (FTEs) Restoring and recovery (FTEs) Total (FTEs) Average annual benefit $15,515 Note: Average annual benefit is calculated by multiplying the savings by the annual burdened salary. Source: IDC, # IDC
7 As a result of streamlining storage management, the average daily backup window declined from 14.0 hours to 6.6 hours, saving each organization an average of 2,000 hours annually. In addition, server administrators saved 1,270 hours. Reducing tape backup saved another 950 hours associated with the management of removable media. Better storage backup management also led to fewer errors, resulting in fewer restores per year. IT staff spent almost 1,230 fewer hours restoring activities. After deploying its Quantum solution, one pharmaceutical firm was able to reduce its backup window considerably. "My backup window used to be six hours, starting at midnight, with another lag of four hours to replicate over a WAN link to an offsite counterpart," a company IT manager said. "Now I can complete my daily backups in less than 90 minutes, including replication." A gaming and entertainment company also reduced its backup window and restore times significantly when it replaced its legacy tape library with a Quantum DXi6540 deduplication appliance, a Quantum Scalar i500 platform, and two LTO tape drives. "Before, it would take about five days running 24 by 7 to get all of the systems backed up," a company IT manager said. "Now, it's down to about 14 hours and runs completely on the DXi appliance and the Scalar i500." Previously, a restore could take four hours. "Usually I'm able to do a restore in 15 to 20 minutes now," the gaming and entertainment IT manager said. Also, because the company can back up three times more on the LTO tape drives, it is reducing the number of tapes it needs to buy. Since deploying its Quantum solution, a construction firm has seen a major reduction in backup failures. "Before, a good 20% to 30% were failures," the construction company IT manager said. "Now it's perhaps 2%." The company deployed its first Quantum DXi6510 when it didn't have enough capacity to back up everything to tape overnight. It has since added a second Quantum DXi6510 at its disaster recovery site. A dedupe ratio of 40:1 allows the company to keep 30 days of data on disk, giving it more functionality. IT staff time spent on backup management has dropped from 20 hours a week to two. A large European educational institution is achieving a dedupe ratio of 18:1 with a DXi6540 appliance dedicated to and databases and a ratio of 9:1 with a second appliance used for file sharing. "Before, it might take two hours to back up a 1 GB database," a university IT executive said. "Now it takes just 15 minutes." The institution has also reduced staff time for backup. According to the university IT executive, "It used to take 20 hours a week, and now we're down to eight hours." Overall, the improvement among the companies interviewed in IT efficiency associated with better management of data resources contributed another $15,515 per 100 users in annual savings. U s e r P r o d u c t i v i t y End users can be significantly impacted by disruptions to their business applications. Improving the management of storage backup resources and optimizing IT operations can reduce or eliminate these disruptions and enhance user productivity. The 2011 IDC #
8 companies interviewed, on average, realized a gain of nearly 30 hours per year for each end user through the following productivity enhancements: Shorter backup windows eliminated the occasional spillover into business operations, saving 7.5 hours per year. Backup errors were reduced 91%. Reducing backup errors and failed backups eliminated minor disruptions in business operations, saving 8.1 hours per year. Restore time was reduced 95%, saving 4.8 hours per year. Enhancing server performance added another 9.2 hours per year. With its Quantum solution, a financial services firm was able to reduce restore times significantly, enabling its end users to be more productive. "We typically do five or so user-requested restores a week," a data protection executive said. "To restore something now, it takes less than 45 minutes. Before, it would take an average of four hours or up to two days if we had to call something back from an outside firm." By deploying Quantum disk-based appliances, another pharmaceutical firm reduced its average recovery time from two days under its previous system to about 35 minutes. "If we had to wait that long to recover, the impact on the business would be significant," an IT systems executive said. "I'd estimate losses of $200,000 to $500,000 for that couple of days." The firm deployed the Quantum appliances to supplement its legacy tape library when it started opening remote sites. It uses three Quantum DXi4500s for file replication between sites, with a Quantum DXi6500 holding the main portion of the data as a disaster recovery backup in its collocated facility. "We added the Quantum appliances because we had to be able to synchronize data from the remote sites to a central location," the pharmaceutical IT manager said. "When you add remote locations, you have to store data there. We put in the DXi4500s and synched them back to the DXi6500 at the collocated facility." The Quantum DXi4500s have a dual purpose: They store data and let users access the data, and they synchronize the data offsite. With Quantum DXi solutions, total enhancements to end-user productivity returned an average of over 3,100 person-hours of productive time annually, saving $9,131 per 100 users. C o s t R e d u c t i o n Organizations today are devising strategies for managing the growth in demand for storage while keeping an eye on the need for cost containment. For many organizations, that strategy consists of leveraging existing investments within new solutions. In this study, none of the organizations were eliminating tape as a backup medium. Tape's role in long-term retention (average of 21 months) is secure. Rather, they used the DXi systems and their remote replication capability to reduce the costs associated with tape, including storage, transportation, and libraries. 8 # IDC
9 Controlling storage costs starts with deduplication, which is the key to creating an optimized storage infrastructure. Organizations in this study were able to achieve 15:1 deduplication ratios on average, with some companies enjoying ratios as high as 40:1. As a result, organizations experienced significant direct cost benefits from deduplication (42% of total cost savings), as well as associated savings from reducing costs of annual media purchase, transportation and storage savings, savings on optimization of tape drives, communications savings from reduced bandwidth requirements, and tape library savings. One European manufacturer had used its 17:1 deduplication ratio to support "painfree" deployment of virtual machines. Another company related that it was able to use less expensive server hardware as a result of Quantum. With its Quantum solution, a medical organization is now storing 158TB of backup data in 17TB of disk space, a reduction of more than 89%. The company deployed a Quantum DXi system and Quantum Scalar i500 tape library two years ago. "Just adding the DXi improved our process, especially in terms of restores," a senior IT executive said. Before, it would take about 10 hours to get the data back from its offsite location. "Now we can restore in 10 minutes. Also, we can restore anytime." A major driver of cost savings is the use of remote replication between multiple DXi appliances to provide short-term disaster recovery protection instead of relying exclusively on the creation and transport of removable media for that function. By using the remote replication capability of its Quantum DXi backup solution, a supplier of building products was able to save both time and money. According to the company's IT manager, "We now have the ability to send our data offsite, almost immediately, as opposed to waiting for the truck to pick up our tapes and take them offsite." With its Quantum solution, a financial services firm was able to avoid the cost of using a local contractor to handle tapes in a new disaster recovery site. The site is in an unmanned collocated facility, managed by an outside firm, where it has more than 30 servers. By deploying the Quantum solution to replicate the backups offsite back to its primary datacenter, the firm was able to increase its ability to recover from a natural disaster while minimizing costs. "If we were paying a company to go into our cage every day to handle tapes manually, it would cost $60,000 to $70,000 a year," the financial services IT executive said. "Also, since there is no movement of tapes, there is less risk, and there's no waiting 12 hours for an outside firm to get our tapes here and then load them into the library." There is also a savings in media purchase costs. Given that demand for storage within these organizations is growing at 40% annually, the benefit generated from more efficient use of storage exceeds $22,670 per 100 users annually in reduction of costs and cost avoidance (see Figure 2) IDC #
10 ($) F I G U R E 2 S t o r a g e E n v i r o n m e n t C o s t S a v i n g s p e r U s e r s 25,000 $22,671 20,000 15,000 $10,137 Storage savings from deduplication Annual tape purchase savings Savings on optimization of tape drives 10,000 5,000 $4,645 $670 $4257 Communications savings (Mbps) Savings on tape transportation and storage Tape library savings 0 $1,933 $1,029 Source: IDC, 2011 R O I A N A L Y S I S Organizations in this study made an initial investment of $18,619 per 100 users, which included the purchase of the Quantum solution and the IT labor required to deploy it (see Table 4). Based on that investment, the organizations realized average annual benefits of $47,316 per 100 users. Over a three-year period, each company saw cumulative savings of $116,675 per 100 users. The three-year ROI analysis shows that, on average, the organizations in this study spent $23,527 per 100 users deploying and maintaining blades and received $111,853 per 100 users in benefits for a net present value (NPV) of $88,326. The companies saw a payback period of 6.2 months and an ROI of 375%. 10 # IDC
11 T A B L E 4 T h r e e - Y e a r R O I A n a l y s i s Benefit (discounted) $111,853 Investment (discounted) $23,527 NPV $88,326 ROI (NPV/investment) 375% Payback 6.2 months Discount rate 12% Source: IDC, 2011 C H A L L E N G E S Firms that evaluate and implement deduplication for their backup environments must keep in mind the following: Deduplication ratios and thus storage efficiency factors will vary based on data type, backup frequency, and backup type. Different approaches to deduplication offer a variable set of benefits and tradeoffs. For example, a source- or client-side deduplication approach introduces LAN bandwidth savings but can introduce client overhead. Not all data can be deduplicated. Image data, for example, is already in a format rendering deduplication algorithms ineffective in reducing common data chunks. C O N C L U S I O N The convergence of exploding data growth and the need to control costs confronts IT system decision makers. Senior IT executives are pressured to reduce spending on IT equipment and administrative resources while increasing operational efficiencies and meeting the demands of data growth and data protection. Organizations must deploy storage solutions that are part of ongoing efforts to optimize operations and improve IT asset utilization. Challenges can be met and goals achieved through informed implementation decisions that avoid costly storage migrations. To that end, deduplication technology can accelerate backup efficiency, drive down IT costs, and ensure data protection. Firms deploy different types of deduplicationenabled solutions to address a myriad of cost and operational challenges associated with the growing volume of backup data. In this study, IDC finds that deduplication is 2011 IDC #
12 a core, enabling technology for a variety of storage solutions to address these challenges. Quantum, a long-established player in the data protection and data management, is well-positioned to address today's data management challenges. The company's broad range of open systems scalable deduplication appliance platforms support cost control, risk mitigation, and asset utilization. Quantum's appliances are designed for a variety of environments and use cases to meet customer demand for a comprehensive and flexible data protection solution. A P P E N D I X M e t h o d o l o g y IDC's standard ROI methodology was utilized for this project. This methodology is based on gathering data from current users of the technology as the foundation for the model. Based on these interviews, IDC performs a three-step process to calculate the ROI and payback period: 1. Measure the savings from reduced IT costs (staff, hardware, software, maintenance, and IT support), increased user productivity, and improved revenue over the term of the deployment. 2. Ascertain the investment made in deploying the solution and the associated training and support costs. 3. Project the costs and savings over a three-year period and calculate the ROI and payback for the deployed solution. IDC uses the net present value (NPV) of the savings and increased revenue over three years in calculating the ROI and payback period for the deployment. The NPV of the savings is determined by subtracting the amount that would have been earned by investing the original sum in an instrument yielding a 12% return (to allow for the missed opportunity cost that could have been realized using that capital). IDC bases the payback period and ROI calculations on a number of assumptions, which are summarized as follows: 1. Time values are multiplied by burdened salary (salary + 28% for benefits and overhead) to quantify efficiency and manager productivity savings. 2. Downtime values are a product of the number of hours of downtime multiplied by the number of users affected. 3. The impact of unplanned downtime is quantified in terms of impaired end-user productivity and lost revenue. 4. Lost productivity is a product of downtime multiplied by burdened salary. 5. Lost revenue is a product of downtime multiplied by the average revenue generated per hour. 12 # IDC
13 6. The NPV of the three-year savings is calculated by subtracting the amount that would have been realized by investing the original sum in an instrument yielding a 12% return to allow for the missed opportunity cost. This accounts for both the assumed cost of money and the assumed rate of return. Because every hour of downtime does not equate to a lost hour of productivity or revenue generation, IDC attributes only a fraction of the result to savings. As part of our assessment, we asked each company what fraction of downtime hours to use in calculating productivity savings and the reduction in lost revenue. IDC then taxes the revenue at that rate. Further, because IT solutions require a deployment period, the full benefits of the solution are not available during deployment. To capture this reality, IDC prorates the benefits on a monthly basis and then subtracts the deployment time from the firstyear savings. C o p y r i g h t N o t i c e External Publication of IDC Information and Data Any IDC information that is to be used in advertising, press releases, or promotional materials requires prior written approval from the appropriate IDC Vice President or Country Manager. A draft of the proposed document should accompany any such request. IDC reserves the right to deny approval of external usage for any reason. Copyright 2011 IDC. Reproduction without written permission is completely forbidden IDC #
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