The ROI/TCO Benefits of EMC Data Domain Deduplication Storage and VMware

9.21.2010 The ROI and TCO Benefits of EMC Data Domain Deduplication Storage and VMware A FOCUS White Paper Sponsored by: September 2010 2010 FOCUS, LLC www.focusonsystems.com Page 1

Table of Contents Executive Summary... 1 Introduction... 2 Deduplication and Virtualization: Changing the Game... 2 The Challenges of Backup... 2 From Tape to Disk... 3 Changing the Data Protection Paradigm with Deduplication... 4 ROI/TCO Justification for Deduplication Storage... 4 ROI/TCO Analysis Methodology... 4 The Business Case... 4 Case Study #1: Large Regional Health Insurance Company... 6 Figure 1: Breakdown of Costs and Savings for Health Insurance Company... 7 Figure 2: Contribution to Savings by Category for Health Insurance Company... 8 Figure 3: TCO per TB for Health Insurance Company... 9 Figure 4: Financial Summary for Health Insurance Company... 10 Case Study #2: Software Development Company... 11 Figure 6: Costs and Savings by Year for Software Development Company... 12 Figure 7: Contributions to Savings by Year for Software Development Company... 13 Figure 8: Summary of Operational Improvements for Software Development Company... 14 Figure 9: Financial Summary for Software Development Company... 15 Case Study #3: Major Medical Center... 16 Figure 10: Cost and Savings over 5-year Period for Major Medical Center... 17 Figure 11: Contributions to Savings for Major Medical Center... 18 Figure 12: Summary of Operational Improvements for Major Medical Center... 19 Figure 13: Financial Summary for Major Medical Center... 20 Conclusions... 20 Deduplication and VMware Virtualization... 20 Data Domain and VMware Customer Results... 21 Appendix A: Effects of Deduplication on TCO Components 22 Appendix B: Case Study Details... 23 About EMC... 24 Other Related Focus Research... 24 About Focus, LLC... 24 2010 FOCUS, LLC www.focusonsystems.com Page ii

9.21.2010 Executive Summary Deduplication has recently received significant attention as one of the game changing technologies of the last decade. Likewise, server virtualization has been recognized as a game changer, and has exploded over the past five years, reaching over a 90% market penetration. (Source: FOCUS Research Series Managing the Virtual Environment). Interestingly, FOCUS research also shows that backup and storage issues are the top two pain points in server virtualization implementations. In fact, backup issues often result in stalling the growth of virtualization within an organization, creating a barrier to growing past the initial 25% virtualized, towards the nirvana of 100% virtual. Improving backup operations and reducing the storage costs involved in server virtualization are key to the successful expansion of virtualization across an organization. Leveraging the game changing aspects of deduplication in VMware environments can address not only the aforementioned pain points and barriers to expansion, but can also offer a strong return on investment (ROI) and significantly reduce the total cost of ownership (TCO) of virtual and physical data protection. This paper examines and quantifies the costs and benefits of deduplication in VMware environments. Three detailed case studies from large organizations in different industries are presented. For each of these companies, the IT managers wanted more reliable and efficient backup and recovery, with less operator intervention, and the reduction or elimination of tape. In each case, these goals were achieved, along with a strong return on their investment with substantial savings as well. The financial analysis includes the following: Direct and indirect savings including cost avoidance, supplies and services, and labor cost savings Net savings Return on investment (ROI) Total cost of ownership (TCO) The net savings in these case studies ranged from roughly $500,000 to over $3 million. The ROI ranged from 13% to 278%. In addition, the success of backing up with EMC Data Domain deduplication solutions contributed to the companies abilities to grow their VMware environments, while reducing their data protection storage costs. The companies achieved their overall goals, realizing the business and operational benefits they were seeking, and at the same time recognizing significant cost savings. 2010 FOCUS, LLC www.focusonsystems.com Page 1

Introduction Deduplication and Virtualization: Changing the Game Recent FOCUS Research indicates that backup and storage challenges are the top two pain points in implementing virtualization (See Virtualization Pain Points sidebar). In fact, problems in backing up in virtual environments can be a major limitation both in reducing the practical consolidation ratios of virtual servers and in limiting the expansion of virtualization beyond the initial 20-30% virtualization currently occurring in most IT shops. Virtualization Implementation Pain Points Just as server virtualization has been a game changing technology in managing Backup challenges server workloads, deduplication has Storage challenges been a game changing technology in Difficulty troubleshooting performance problems managing backup. Both virtualization Difficulty predicting storage requirements/growth and deduplication focus on the benefits Networking challenges of consolidation, optimization and Difficulty tracking & managing VMs automation (servers or storage), and both deliver significant ROI and TCO Performance degradation benefits. In fact, because server Difficulty managing security virtualization makes it substantially Trouble moving from test to production easier to provision new servers, the Advanced functions need networked storage initial implementation of virtualization Source: FOCUS, LLC Research Series Managing the Virtual Environment is often followed by virtual server sprawl, creating hundreds of duplicate server images (OS and application software), which contributes to an even greater amount of duplicate data. Combining deduplication and virtualization brings out the best in these two game changing technologies. Applying deduplication technology in VMware environments helps address the challenges of backing up and restoring virtual servers in increasingly short windows and with limited bandwidth. This not only improves backup and disaster recovery processes while reducing costs, but also helps overcome backup as a barrier to expanding virtualization across the enterprise. The Challenges of Backup In both virtual and physical environments, exponential data growth, regulatory requirements, and 24X7 availability requirements (and the resulting decrease in backup windows) have all increased the difficulty in completing backups successfully in the allotted time. Applying deduplication technology in VMware environments helps address the challenges of backing up and restoring virtual servers in increasingly short windows and with limited bandwidth. Data growth is further exacerbated in virtual environments due to the virtual server (and associated storage) sprawl that virtualization almost inevitably brings. Server consolidation using virtualization adds to the backup window problem, since many virtual servers now reside on one physical server sharing one physical pipe. 2010 FOCUS, LLC www.focusonsystems.com Page 2

It is not uncommon for organizations to routinely exceed their backup window or even have a backup window that consumes most of the day. Such long backup operations leave little margin for error and any disruption can place at least some of the data at risk of loss. Such operations also mean that a guaranteed RPO of anything less than 24 hours cannot be met. Tape backup schemes (i.e., grandfatherfather-son) require that the same data be backed up over and over again, creating an abundance of duplicate data. Recovery time objectives (RTO) continue to decrease while the precision of the recovery point objectives (RPO) increase. In other words, IT managers must be able to recover from a given failure quicker and with less data loss. The time needed to find, mount, and search tape media is not fast enough to keep pace with the changing RTO and RPO requirements of most organizations. In addition, with the mechanical nature of tape, operational problems continue to be widespread. While many organizations do not realistically expect to eliminate tape entirely, most want to minimize its use and the corresponding operational problems. As IT organizations seek to improve their data protection strategy going forward, they must address both the virtual and the physical environments, which together include all of these challenges. In addition, because of consolidations, mergers and acquisitions, many IT organizations are grappling with remote operations, often with very divergent backup hardware and software. In many cases, these remote offices do not have professional IT staff, but will still have the same data protection mandates. Central control of remote backup is essential to maintaining the data integrity demanded by the business. One of the most challenging factors for IT Management is people. The more complicated the backup and restore operations become, the more skilled people are needed. These people can be difficult to hire and retain, and costs continue to rise. Even if qualified individuals can be found, budgets are tight, and head counts are flat, making it difficult to hire them. The legacy of the recent economic downturn is the mantra to do more with less (or the same). From Tape to Disk It has been many years since the industry has seen a fundamental breakthrough in tape technology. Tape drives continue to get faster and tapes increase in capacity, but tape still involves the same fundamental challenges it always has. Automated robots make picking and mounting tapes faster, but offsite archive and retrieval cannot be automated. Tape media must still be handled manually inside and outside the data center. Transportation of tapes outside the data center for DR also involves human intervention and it introduces a major security risk, through the possibility of lost or stolen tapes. Best practices have evolved towards the use of tape solely for archive and long-term retention, with disk based backup as the preferred option for the following reasons: To gain higher reliability and certainty of backup job success To reduce labor associated with tape handling and offsite transportation To provide a platform for deduplication enabling: o longer online retention of backup data o consolidation of backup data from remote offices and improved DR (over the WAN) 2010 FOCUS, LLC www.focusonsystems.com Page 3

Changing the Data Protection Paradigm with Deduplication Although backup to disk in and of itself has improved the backup process, data deduplication, pioneered by EMC Data Domain, offers a fundamental change in the way organizations protect data. Deduplication changes the repetitive backup practice of tape, with only unique, new data written to disk. Furthermore, with an average of 20:1 deduplication ratio commonly achieved (and often 40:1 or more in VMware environments), backup data can be retained economically in the data center for long periods of time. This reduces the odds that a data element must be retrieved from the vault. Furthermore, deduplication and resulting data reduction enables backup data to be replicated over the WAN, adding an automated disaster recovery (DR) solution at a very low cost. All of these factors can significantly improve the RTO. ROI/TCO Justification for Deduplication Storage Business case drivers such as more reliable backups, longer data retention, reduced labor and faster backups and restores offer both soft and hard cost justification. This white paper discusses case histories from real-world scenarios of three VMware customers using Data Domain deduplication storage systems for both virtual and physical server backups. The case studies document the actual savings experienced by these customers, each from different industries, with their equipment installed for as long as three years. In the three case studies presented, the net savings ranged from roughly $500,000 to over $3 million. The ROI ranged from 13% to 278%. In addition, the success of backing up with Data Domain deduplication solutions contributed to the companies abilities to continue to reduce their server TCO by continuing their VMware growth, while also reducing their data protection storage costs. All three companies achieved the business and operational improvements they were seeking, recognizing significant cost savings. ROI/TCO Analysis Methodology The ROI and TCO information presented in this white paper is based on a financial analysis conducted by FOCUS analysts. Historical financial data was used whenever possible, with future numbers based on financial projections from the customers, based on past experience. The data from the customers was entered into a customized ROI/TCO calculator created by FOCUS. This unique tool takes all of the data into consideration, and calculates both ROI and TCO. All of the numerical information and charts in this report were created using the FOCUS tool. The Business Case This paper discusses several financial-related terms: return on investment (ROI), total cost of ownership (TCO), direct and indirect savings (including cost avoidance and labor savings), and net savings. A definition of each term follows: ROI (return on investment) ROI is a measure of the financial return on an investment over a specified period of years (typically three to five for IT), represented as a percentage. A minimum ROI may be required by corporate finance departments in order to get approval on a project/acquisition. 2010 FOCUS, LLC www.focusonsystems.com Page 4

TCO (total cost of ownership) A TCO model establishes a fully loaded, total cost of a project over time. Decisions are made by comparing the TCO of one approach to the TCO of another. TCO is a cumulative number, over some period of years (typically three to five for IT), and incorporates the changes in costs and benefits over that period (e.g., due to data and storage growth). TCO includes capital acquisitions, maintenance, and operational costs, and should include both cost components that are direct (e.g., hardware and software acquisition, salary costs of full-time employees) and indirect (which are often difficult to quantify, such as the cost of waiting for a file to be restored). The TCO categories used in this paper are Hardware, Software, Support, Supplies and Services. Salaries generally are based on a 30% burden rate, to cover insurance, benefits, etc. Total savings Total savings is the amount of both direct and indirect dollar benefits resulting from the project. Net savings Net savings is the net amount saved over a given time, calculated by subtracting the costs for that time period, from the total savings for that time period. Direct savings When the project results in a direct cost reduction, where cash outflow is reduced, these reductions are direct savings. Significant direct savings described by users in this paper s case studies include: Supplies and services These types of direct savings involve a reduction in the total cost of tape media and the services to transport and maintain those tapes offsite. For users with a large number of tapes, these savings alone can be staggering. Cost avoidance in hardware These savings are the result of eliminating the need to purchase additional tape hardware to complete backups within the available backup window, as well as for performing tape backup in remote sites. For users already up against the window, or for users eliminating tape in remote sites, this can be the largest percentage of savings. For organizations already using disk-based backup, but without deduplication, savings can also come from adding deduplication and reclaiming storage as a result. Indirect savings When implementing a project can save time (for IT staff or end users), the result is considered indirect savings. Cost avoidance in labor is time saved by backup administrators, systems administrators, or end users as a result of implementing the project. This savings would allow the user the choice of either spending time on other projects or potentially reducing headcount (of full-time equivalents or FTEs). For purposes of this paper, this category is calculated as a cost reduction. 2010 FOCUS, LLC www.focusonsystems.com Page 5

Case Study #1: Large Regional Health Insurance Company The first case study is a large regional health insurance company, with approximately four million customers, and seven distributed sites. The IT infrastructure includes 850 servers running UNIX and Windows on both rack servers and blades, with 172 TB of data (excluding archive). The organization s environment includes VMware, Oracle, SQL, and mainframes, with CA management software. The VMware infrastructure includes 377 VMs running on 35 ESX servers, with 60 TB of VM storage. The organization s goals included improving the efficiency of their IT operations overall and consolidating distributed sites to a main data center and a secondary DR site. They also wanted to improve the efficiency of their backup operations. The IT staff had been experiencing challenges with backups, and had difficulty meeting backup windows, due in part to continuing data growth of about 30% annually, and an increasing number of consolidated virtual servers running on their ESX hosts. In addition, the IT staff faced increasing challenges with the tape library robot and tape encryption. The organization was using offsite tape storage for DR and wanted to reduce offsite storage costs. The goal was to eliminate tape completely for the mainframe (and reclaim the floor space from the tape library) and go to monthly archive to tape for open systems. Multiple products from multiple vendors and with varying types of deduplication were evaluated. We chose EMC Data Domain systems because it was the most elegant solution. With Data Domain s architecture and implementation of inline deduplication, Data Domain bet their money on Intel, and kept getting better and better reviews. From ingestion to replication to offsite, it was the best option. The team started by looking at virtual tape libraries to address these challenges. Multiple products from multiple vendors and with varying types of deduplication were evaluated. According to the Director of Storage Management, We chose EMC Data Director, Storage Management Domain systems because it was the most elegant solution. Large Health Insurance Co Referring to the Data Domain architecture and its implementation of inline deduplication, the Director said, Data Domain bet their money on Intel, and kept getting better and better reviews. From ingestion to replication to offsite, it was the best option. (For more information on the internal Data Domain deduplication architecture and its ability to leverage processor improvements, refer to the EMC white paper listed in the reference section at the end of this paper.) In support of the data center consolidation efforts, the organization implemented multiple EMC Data Domain DD880 systems at each data center. The team began the move to disk-based backup using Data Domain systems, and is currently in the midst of an analysis to move all data center backup of its open systems and mainframe application data to Data Domain systems. The team currently archives to tape monthly, and is in the process of moving completely from Symantec NetBackup to EMC NetWorker, and will be utilizing the EMC Data Domain Boost technology. The team backs up its VMware storage using the standard CIFS interface on the Data Domain systems. The organization has been growing its VMware environment, which, became challenging to backup once 30% had been virtualized. The team is planning to use NetWorker with the VMware vstorage APIs for Data Protection to improve VMware backup operations and expand to the remaining servers. 2010 FOCUS, LLC www.focusonsystems.com Page 6

Dollars FC9.21.2010 The organization purchased the original group of DD880 systems for the primary data center in Year 1, and purchased additional Data Domain systems in Year 2 for the secondary site (implemented at SunGard as the DR site). Figure 1 provides a detailed breakdown of their costs and savings. Costs and Savings - Breakdown $8,000,000 $6,000,000 $4,000,000 $2,000,000 $- $(2,000,000) $(4,000,000) $(6,000,000) Over 3 Year Period Total Direct Savings: Supplies & Services Total Indirect Savings: Cost Avoidance - Labor Total Direct Savings: Cost Avoidance - Hardware Total Incremental Cost of Data Domain Figure 1: Breakdown of Costs and Savings for Health Insurance Company As Figure 1 shows, the company spent $1.3 million for the new Data Domain infrastructure in Year 1, and $1.8 million in Year 2, with the maintenance costs as the only addition in Year 3. The direct savings from cost avoidance, supplies and services, plus the indirect savings of cost avoidance in labor exceeded their incremental costs of Data Domain systems for each year as shown by the Net Savings, indicated by the green line, which totals $3.2 million over the three-year period. (Net savings are calculated by subtracting the Incremental Cost of disk deduplication storage (shown in red) from the total savings (the sum of Total Indirect Savings (labor cost avoidance) and Total Direct Savings (supplies and services and hardware cost avoidance). 2010 FOCUS, LLC www.focusonsystems.com Page 7

Figure 2 further illustrates the breakdown of the various savings. The IT staff predicted that without the Data Domain solution, there would be a need for significant additional tape hardware in Year 1 and Year 2, which was avoided with the switch to Data Domain systems. These direct savings resulted in hardware cost avoidance being the greatest contributor to savings, at 40%. Contributions to Savings Total Indirect Savings: Cost Avoidance - Labor 26% Total Direct Savings: Supplies & Services 34% Total Direct Savings: Supplies & Services Total Direct Savings: Cost Avoidance - Hardware Total Indirect Savings: Cost Avoidance - Labor Total Direct Savings: Cost Avoidance - Hardware 40% Figure 2: Contribution to Savings by Category for Health Insurance Company In terms of supplies and services, by dramatically reducing their tape usage, their cost savings in media approached $500,000 per year. In addition, offsite storage costs for Iron Mountain were reduced in the first year from $464,000 to $230,000. These savings combined to contribute 34% of the total savings. Labor savings were also substantial, starting with an avoidance to hire an additional FTE and redistributing workload of two existing FTEs. In addition, faster and more reliable backups eliminated the recurrence of previous outages that had been happening every one or two months as a result of overnight jobs impacting daytime production systems. This eliminated future lost time for 300 customer service reps. With all the labor savings combined, the indirect savings from labor represented 26% of the total savings. 2010 FOCUS, LLC www.focusonsystems.com Page 8

TCO in Dollars TBs of Storage FC9.21.2010 Because of the cost savings of the Data Domain implementation as compared to what would have been required for a tape-only implementation, the total cost of ownership for data protection was significantly reduced across the three years. Figure 3 illustrates the TCO per TB for the two alternatives (in blue and green bars), with the red line indicating the growth in TB over the three-year period. TCO Per TB Over 3 Years $7,000 $6,000 $5,000 $4,000 1800 1600 1400 1200 1000 $3,000 $2,000 $1,000 $- Year 1 Year 2 Year 3 Cumulative 800 600 400 200 0 TCO per TB of Data Domain (in cost per TB) TCO per TB of Tape (in cost per TB) Storage in TB Figure 3: TCO per TB for Health Insurance Company 2010 FOCUS, LLC www.focusonsystems.com Page 9

Figure 4 shows the overall financial summary over the three-year period. With a total investment of $3,727,388, the customer achieved a total savings of $6,922,579. This yields a total net savings of $3,195,191 representing an ROI of 86%. Savings: Yr. 1 Yr. 2 Yr. 3 Total Direct Savings- Supplies & Services 662,800 744,880 968,344 2,376,024 Cost Avoidance- HW 858,865 1,463,714 449,514 2,772,093 Cost Avoidance - Labor 444,728 578,146 751,589 1,774,463 Total Savings 1,966,393 2,786,739 2,169,447 6,922,579 Costs: Total Incremental Cost of Data Domain 1,378,470 1,818,183 530,735 3,727,388 Summary: Total Net Savings with Data Domain 587,923 968,556 1,638,712 3,195,191 ROI (3 Years) 86% Figure 4: Financial Summary for Health Insurance Company As a result of the implementation of Data Domain solutions, the customer has achieved its goals, including: Implementing enhanced data protection with improved and more reliable backup and restore capabilities Dramatically reducing tape usage Sending data backup volumes offsite, fast, efficiently, and securely Realizing cost savings in tape hardware, tape media, tape handling labor, offsite storage costs, and floor space Building a data protection foundation to support current and planned virtualization growth 2010 FOCUS, LLC www.focusonsystems.com Page 10

Case Study #2: Software Development Company As the North American operating arm of a billion dollar, worldwide software development company, this organization has experienced the type of growth through acquisition that many large companies have experienced. With a total of 4,000 employees in North America, the IT staff of 160 is responsible for a highly decentralized organization and infrastructure, and has been working hard on centralizing their distributed operations, including building a second data center for disaster recovery purposes. Their distributed operations include sixteen remote sites from various acquisitions, all with different tape libraries/loader and backup technologies, described by their Operations Director as a nightmare. The organization manages 1700 servers (physical and virtual), with 1000 production VMs on 40 physical hosts running vsphere in the data center, and 180 TB of protected and unprotected data. The remote offices each had their own tape backup environments, with a total of 500 servers (virtual and physical), which were 30-40% virtualized. Many of the remote sites had minimal IT staff, while others had none, and in some cases, office administrative staff members were the ones responsible for handling tapes. With the growth they had been experiencing, they predicted that they would have needed additional tape hardware in each remote location within two years. They use Symantec NetBackup in the data center, and are in the process of rolling it out to their remote sites under an enterprise license, replacing Symantec Backup Exec in eleven locations. To improve operations, the goal was to use offsite replication over the WAN to replace physical tape movement significantly reducing the number of tapes and the labor involved. At the outset, three different vendor products were evaluated, with pilots done of all three. The Data Domain solution was selected for two key reasons: The other pilots were not successful and replication failed and several members of the IT staff had used Data Domain very successfully before. The bulk of the Data Domain implementation was completed over a six-month period, ultimately resulting in twenty Data Domain systems being installed across the data centers and remote sites over the last 3 years. 2010 FOCUS, LLC www.focusonsystems.com Page 11

Dollars FC9.21.2010 The rollout of the twenty systems started in Year 1, accelerated in Year 2 and completed in Year 3, at a total cost over three years of $755,057. The project started slowly, with costs in Year 1 being under $100,000. Savings were immediate, due to the avoidance of purchasing tape hardware in the most stretched remote sites and to the reduction in tape media and labor, with net savings in Year 1 of $643,640. Figure 6 shows the costs (in red), savings (in blue) and net savings (in green) by year and over the three-year period. There was a positive net savings each year, with a total net savings over the three years of $2.1 million. Costs and Savings - Breakdown Over 3 Years $3,500,000 $3,000,000 $2,500,000 $2,000,000 $1,500,000 $1,000,000 $500,000 $- $(500,000) $(1,000,000) Total Direct Savings: Supplies & Services Total Indirect Savings: Cost Avoidance - Labor Total Direct Savings: Cost Avoidance - Hardware Total Incremental Cost of Data Domain Figure 6: Costs and Savings by Year for Software Development Company 2010 FOCUS, LLC www.focusonsystems.com Page 12

As Figure 7 indicates, the immediate savings in Year 1 come almost equally from cost avoidance in labor and hardware, followed by the reduction in tape supplies and services. The bulk of the savings in Year 2 come from hardware cost avoidance, largely from avoiding the purchase of the additional tape hardware. Contributions to Cost Savings - By Year $3,000,000 $2,500,000 $2,000,000 $1,500,000 $1,000,000 Total Indirect Savings: Cost Avoidance - Labor Total Direct Savings: Cost Avoidance - Hardware Total Direct Savings: Supplies & Services $500,000 $0 Year 1 Year 2 Year 3 3 Yr Total Figure 7: Contributions to Savings by Year for Software Development Company There was also a significant savings in disk storage space reclamation, from using Data Domain s deduplication storage systems with several existing applications, most notably VMware, that had been backing up to traditional disk (without deduplication). Reclaiming disk storage space represented an additional savings of $230,000 across Year 2 and Year 3. Over half of this reclaimed storage was for VMware, which with the virtual server sprawl that with VMware occurred across the organization, would have continued to grow substantially. Savings from labor costs surpassed both hardware and supplies and services savings in Year 3, since there were major ongoing savings in labor costs. Over the three years, labor grew to be the major contributor at 42%, followed closely by hardware cost avoidance at 39%. In addition to overall savings, the customer also experienced improvements in TCO and cost per TB. Figure 8 shows the reduction in 3-year TCO per TB for the previous tape only environment versus the Data Domain implementation, showing a 39% improvement and a 3-year savings of $ $2,097,305. In addition, since the total number of tapes needed dropped from 10,200 to only 500 to protect the same amount of storage in TB, the cost of tape media per TB was reduced by 90%. Offsite transportation costs did not change until Year 2, but still resulted in a cost per TB reduction of 69%. 2010 FOCUS, LLC www.focusonsystems.com Page 13

Units Tape Only Data Domain % Improvement Savings over 3 Years 3 Year TCO Per TB Cost per TB $2,804 $1,713 39% $2,097,305 Tape Media Cost Per TB Offsite Storage & Transportation Costs Cost per TB per Year Cost Per TB $992 $97 90% $339,500 $65 $20 69% $31,612 Backup window Hours 50 30 40% RTO (Recovery Time Objective) Minutes 60 15 75% Backup Data Kept Online Days/Weeks 0 30-60 days -- Figure 8: Summary of Operational Improvements for Software Development Company In terms of operational improvement, the backup window, including VMware backups, was reduced from 50 hours to 30 hours, with the recovery time objective reduced from 60 minutes to 15 minutes. The amount of data kept online went from zero to between 30 and 60 days, with a data reduction ratio averaging 22:1 aggregated across all protected data, including the VMware environment. The tight integration between NetBackup and Data Domain systems utilizing OpenStorage will bring a, single pane of glass administration to our backups, allowing us to report on backup success and replication, all through Symantec s Ops Center reporting suite. The Director of IS Operations, summing up the improvement in the reliability of their backups, put it this way, The success rate of backups has increased dramatically from what it was. Our previous success rate was estimated at 65% versus our current success rate of 97%. Data Domain improved the speed of backup/restore, and gives us a cost effective means to keep 30-60 days of backup retention, with nearly real-time replication offsite. Additionally, with the virtual server sprawl we have seen with VMware, we would have had to invest in more hardware capacity (tape drives, larger libraries, additional disk space) plus the cost of media to support this growth. With Data Domain storage, the penalty for these growing VMware backups is minimal. The Data Domain solution removed a significant backup barrier to our continued expansion of virtualization. Director, IS Operations Software Development Company Furthermore, for their VMware environment, Data Domain improved the speed of backup/restore, and gives us a cost effective means to keep 30-60 days of backup retention, with nearly real-time replication offsite. Additionally, With the virtual server sprawl we have seen with VMware, we would have had to invest in more hardware capacity (tape drives, larger libraries, additional disk space) plus the cost of media to support this growth. With Data Domain storage, the penalty for these growing VMware backups is minimal. The Data Domain solution removed a significant backup barrier to our continued expansion of virtualization. 2010 FOCUS, LLC www.focusonsystems.com Page 14

Figure 9 details the overall financial summary, showing a total incremental cost for Data Domain of $755,057, resulting in a total net savings of $2,097,305. This represents an ROI over 3 years of 278%, showing the financial strength of the Data Domain implementation, in addition to (and in large part, stemming from) the major operational improvements. Savings: Yr. 1 Yr. 2 Yr. 3 Total Direct Savings- Supplies & Services 199,500 245,280 94,192 538,972 Cost Avoidance- HW 265,500 553,500 288,240 1,107,240 Cost Avoidance - Labor 276,640 387,296 542,214 1,206,150 Total Savings 741,640 1,186,076 924,646 2,852,362 Costs: Total Incremental Cost of D2D 98,000 544,570 112,487 755,057 Summary: Total Net Savings of D2D 643,640 641,506 812,159 2,097,305 ROI (3 Years) 278% Figure 9: Financial Summary for Software Development Company As a result of the organization s enterprise-wide deployment of Data Domain solutions, the IT staff has met its goals including: Improving the performance and success rate of virtual and physical backup and restore Improving DR by replacing tape and physical transportation with offsite replication using the existing WAN infrastructure Eliminating backup constraints as a barrier to the successful growth of the VMware environment 2010 FOCUS, LLC www.focusonsystems.com Page 15

Case Study #3: Major Medical Center Server virtualization has been very successful in the health care industry, and this major medical center is no exception. With 350 servers running Windows and Linux, the organization has grown from four to twenty VMware ESX hosts over the past five years. The software environment includes Windows, Red Hat Enterprise Linux, Oracle, SQL Server, MS Exchange, and PeopleSoft as well as in-house developed clinical systems applications. There are two data centers, three miles apart. The storage infrastructure consists of 500 TB of storage, 750 TB if archive storage is included, with 189 TB primary data, 50 TB of which is backed up. The IT staff has seen good success with VMware on the server side, and is now evaluating expansion to desktop virtualization using solutions from VMware, Citrix or Microsoft. There was a large tape library for backing up the mainframe and open systems environments, and the team hoped to retire it and eliminate tape. Backups were completed using Symantec NetBackup for the physical environment, with the VM infrastructure backed up using Vizioncore vranger Pro. Initially, there was one aging tape silo at the primary site, with tapes being shipped offsite in boxes. There was no good DR capability without a significant purchase, which would have involved adding an additional tape library at the secondary site, and replacing the aging tape silo at the primary site. The team evaluated other tape libraries as well as disk-based deduplication solutions, and selected the Data Domain solution due to its, Ease of implementation/integration into our or any existing environment, and less cost for better capability and DR, than the competing tape alternatives according to the IT Storage Architect. Previously, tapes were shipped to the remote site, but the tapes could not be recovered there without a tape library, or backup software/hardware. The tapes were being delivered by van and required a minimum one-hour lead-time to get them back onsite at the primary data center, prior to any restore processes starting. The project began with the installation of two Data Domain systems in Year 1, and they were so successful that two additional systems higher capacity and performance were added in Year 2, with two more even larger added in Year 3. Backups were switched from NetBackup to CommVault, and focused on disk-based backup using Data Domain storage, and began using synthetic fulls, which, put the nail in the coffin for tape. Using Vizioncore to manage VMware backups to the Data Domain storage, the VM administrators now write directly to an allocated share on each of Data Domain systems. All of these changes allowed the staff to eliminate the tape library, and now the process, according to the IT Storage Architect, is to, electronically replicate offsite, and any copy can be restored from either data center in minutes. No tapes in transit, no security issues, no waiting. these changes allowed the staff to eliminate the tape library, and now the process, according to the IT Storage Architect, is to, electronically replicate offsite, and any copy can be restored from either data center in minutes. No tapes in transit, no security issues, no waiting. IT Storage Architect, Major Medical Center 2010 FOCUS, LLC www.focusonsystems.com Page 16

Dollars FC9.21.2010 Because of the demonstrated success and tangible benefits of the Data Domain solutions in the first two years, the medical center made a significant investment in additional, larger Data Domain systems in Year 3, knowing that it would be gaining the benefits of this purchase over the following several years. In order to allow the ROI/TCO analysis to include the benefits for these years, the analysis for this environment was extended to a five-year period. Figure 10 illustrates the costs and savings over the five years, showing the costs (in red below the zero line), and savings by type (purple, beige and blue, above the zero line). Net Savings, indicated by the green line, were positive every year except in Year 3, when the new big systems were added for additional expansion. Even with this additional major purchase, net savings over the five-year period approached a half million dollars. Costs and Savings - Breakdown $5,000,000 $4,000,000 $3,000,000 $2,000,000 $1,000,000 $- $(1,000,000) $(2,000,000) $(3,000,000) $(4,000,000) $(5,000,000) Over 5 Year Period Total Direct Savings: Supplies & Services Total Indirect Savings: Cost Avoidance - Labor Total Direct Savings: Cost Avoidance - Hardware Total Incremental Cost of Data Domain Total Net Savings with Data Domain Figure 10: Cost and Savings over 5-year Period for Major Medical Center 2010 FOCUS, LLC www.focusonsystems.com Page 17

Since the shift to using Data Domain systems allowed the company to retire the existing tape library, and avoid the major purchase of two additional large silos, the hardware cost avoidance was the biggest contributor to savings at 75%, as shown in Figure 11. Contributions to Savings Total Indirect Savings: Cost Avoidance - Labor 18% Total Direct Savings: Supplies & Services 7% Total Direct Savings: Cost Avoidance - Hardware 75% Total Direct Savings: Supplies & Services Total Direct Savings: Cost Avoidance - Hardware Total Indirect Savings: Cost Avoidance - Labor Figure 11: Contributions to Savings for Major Medical Center These direct cost avoidance savings also include direct savings from reclaiming storage through the Data Domain systems deduplication as well as savings in software licenses as part of the project. Prior to using Data Domain solutions, the VMware ESX servers were writing backup data to block based SATA storage. They now use NFS shares with deduplication on the Data Domain systems, which reclaimed a large amount of space and saved approximately $20K immediately. With the VMware expansion that the organization is experiencing, this capability continues to reduce VMware storage costs, and save additional money. Prior to Data Domain, the VMware ESX servers were writing to block based SATA storage. They now use NFS shares with deduplication on the Data Domain boxes, which reclaimed a large amount of space and saved approximately $20K immediately. With the VMware growth that they were experiencing, this capability continues to reduce VMware storage costs, and save additional money. 2010 FOCUS, LLC www.focusonsystems.com Page 18

Since the goals of this IT organization were focused on operational improvements, the evaluation of the project was also. Figure 12 gives a summary of the operational aspects of this company s shift from tape to disk. Units Tape Only Data Domain % Improvement Savings over 5 Years 5-Year TCO Per TB Cost per TB $2,011 $1,711 15% $835,807 Backup window Hours 72 5 93% RTO (Recovery Time Objective) Minutes/ Hours 12-24 hrs 1 hr 92% Data Deduplication Ratio Reduction factor -- VMware 40:1 Oracle 40:1 SQL 38:1 Exchange 10:1 -- Figure 12: Summary of Operational Improvements for Major Medical Center By eliminating the tape libraries, the total cost of ownership per TB has been reduced, with a savings of $835,807. At the same time, the backup window has gone from 72 hours to five hours, an improvement of 93%. The recovery time has gone from 12-24 hours to one hour. In addition to dramatically improving both backup and recovery times, the organization is achieving substantial data reduction, up to 40:1 in several environments, including VMware (which because of the OS and application software images in the VMs tends to create a significant amount of duplication across VMs, and thus is a great candidate for deduplication). 2010 FOCUS, LLC www.focusonsystems.com Page 19

Figure 13 shows the financial summary over the five-year period. Even with a total investment of $3,825,080 over this period, there was still a total savings of $ 4,312,351, yielding a net savings of $487,271 and a return on investment of 13%. Savings: Yr. 1 Yr. 2 Yr. 3 Yr. 4 Yr. 5 Total Direct Savings- Supplies & Services 173,000 22,100 28,730 37,349 48,554 309,733 Cost Avoidance- HW 977,660 987,820 395,698 427,448 432,459 3,221,084 Cost Avoidance - Labor 96,103 124,934 162,414 211,139 274,480 781,535 Total Savings 1,246,763 1,134,854 586,842 675,935 755,493 4,312,351 Costs: Total Incremental Cost of Data Domain 518,000 799,240 1,578,320 464,760 464,760 3,825,080 Summary: Total Net Savings with Data Domain 728,763 335,614-991,478 211,175 290,733 487,271 ROI (5 Years) 13% Figure 13: Financial Summary for Major Medical Center In addition to the bottom line savings, the goals of operational improvement were clearly met, with much faster backup and recovery times, and the elimination of tape greatly improving overall data protection. As the IT Storage Architect so aptly put it, No tapes in transit, no security issues, no waiting. Furthermore, as the VMware environment and its corresponding backup and storage requirements grow, Data Domain deduplication solutions continue to reduce the cost of VMware backups dramatically. Conclusions Deduplication has proven itself as a game changing technology, with both financial and operational benefits and the potential for a radical change in the way companies manage both virtual and physical environments. What this means is that data protection including backups and DR can become reliable, highly automated and efficient, with fast backup times and fast recovery from local and remote storage becoming a reality. Deduplication and VMware Virtualization Deduplication plays an especially important role when implemented in conjunction with virtualization. The nature of virtual servers is to create multiple copies of the same or similar VM images, including OS and application software, as well as application data. This creates large amounts of duplication. As virtualization grows, along with the ease of provisioning new VMs comes virtual server sprawl, increasing duplication even more. This makes VMware environments great candidates for deduplication. 2010 FOCUS, LLC www.focusonsystems.com Page 20

Furthermore, as virtualization becomes successful within an organization, it grows from the initial pilot phase, to a 25-30% virtualized phase (as with the case studies here), with many organizations hoping to achieve close to 100% virtualized. With backup as the number one pain point for implementing virtualization, in order to grow past phase two, organizations need to improve backup operations for the virtual environment, meeting shrinking backup windows and minimizing backup storage costs. Again, deduplication offers great benefits here. For those organizations who have been using diskbased backup (without deduplication) of ESX servers, (as exemplified by two of the case studies here), Data Domain systems offer additional benefits such as reclaiming disk space through deduplication. VM administrators can simply allocate NFS shares on a Data Domain system, and they can immediately reclaim primary storage previously used for backup and gain the associated cost benefits. All the customers in these case studies also talked of the ease of integration with various backup solutions used with VMware, including Vizioncore, NetWorker, NetBackup, and Backup Exec. Since Data Domain systems can be used with solutions for both virtual and physical environments, the result is a consistent backup solution across the IT infrastructure. Data Domain and VMware Customer Results Deduplication Benefits with VMware These three VMware Data Domain case studies show a variety of companies, in different industries, with different environments and varying levels of decentralization. All show huge improvements in their operations with cost savings across the board, and a solid return on their Data Domain investments. In addition to local improvements, deduplication enabled replication over the network. This allows companies to move to a new paradigm for backup and DR, including the replacement of tape with replication to a secondary data center, and/or multi-site consolidation. This paradigm shift offers IT organizations the opportunity to minimize tape use, and all the associated management costs. Overall, these VMware and Data Domain customers are extremely pleased with their results. They have successfully leveraged these two game changing technologies together to achieve more reliable and efficient backups and restores, improved and cost-effective disaster recovery plans, more productive IT staff, and a stronger foundation for moving towards 100% virtualization all while reducing costs, yielding a solid return on their investment. High deduplication ratios (e.g., 40:1 or more) Reclaiming primary storage (used previously by disk-based backup systems without deduplication) Single solution across many different types of backup Easy integration with many VMware backup solutions such as Vizioncore, NetBackup, Backup Exec, NetWorker VM administrators can store directly on NFS share on Data Domain and benefit from deduplication with no additional work Integrated VMware backup for users moving from agent based backup to vstorage APIs for Data Protection (VADP) 2010 FOCUS, LLC www.focusonsystems.com Page 21

Appendix A: Effects of Deduplication on TCO Components TCO Category TCO Component Effect of Deduplication Storage Calculation of Costs/Savings Tape Backup Hardware & Maintenance Reduction or elimination of need for any or additional tape libraries, drives, or media servers in local and/or remote offices. No additional tape hardware, possible elimination of current hardware, and avoidance of future hardware Hardware Dedupe Backup and Storage Hardware & Maintenance Incremental cost of deduplication hardware for storage and WAN vaulting/replication. Savings from reclaiming any storage used previously for diskbased backup without deduplication Incremental initial costs plus any additional required over 3 years Subtract cost of disk storage reclaimed through deduplication Software Backup Software Licenses & Maintenance With deduplication storage, no additional software. Avoids cost of additional backup licenses. Subtract cost of additional licenses required by tape backup Labor (Backup Admin FTEs) Reduced labor in tape mounting, handling, and transporting from remote offices. Number of hours saved per week Support Labor (Sysadmin, Backup Admin FTEs) Time saved due to faster restores. Number of restores per week times number of hours saved per restore due to data being kept online Labor (Sysadmin, Backup Admin FTEs End-user time saved per year due to faster restores. Number of users affected, times Number of restores per week Supplies Tape Media Reduction in number of tapes. Reduced number of tapes in inventory and added per year (after implementing Data Domain) times cost of tape Services Offsite Tape Storage & Transportation Reduction in storage, transportation, and tape recall costs. Potential elimination of service contracts at remote sites. Average reduction in invoiced costs after implementing Data Domain 2010 FOCUS, LLC www.focusonsystems.com Page 22

Appendix B: Case Study Details #1 #2 #3 Amount of Storage in TB 700 700 750 Amount of Data in TB 172 180 189 % Growth over 3 Years 30,30,30 40,40,40 30,30,30 Annual tape media cost before Data Domain Ongoing cost of tape media after Data Domain Offsite Storage Costs/Yr Before Data Domain Offsite Storage Costs w/data Domain (Yr 1) $478,800 $357,000 $195,000 $50,000 $42,000 $17,000 $464,000 $10,450 - $230,000 $1,750 - # FTEs for Backup and Support 4 2.5.25 Tape Handling Hours Saved 35/wk (and 2 FTEs redployed) Admin Time Saved due to faster Restores User Time Saved due to faster Restores 60/wk 0 0 10/wk 10/wk 150/wk 6/wk 24/wk Data Kept Online after Data Domain 5 weeks 30-60 days 30 days Data Reduction Ratio with Data Domain across all protected applications Backup Window Before and After Data Domain Recovery Time Improvement 15:1 22:1 VMware 40:1 11 hours, but doubled the amount of data 30 hours to 12-16 hours 50 hours to 30 hours 60 minutes to 15 minutes Oracle- 40:1 SQL- 38:1 Exchange - 10:1 72 hours to 5 hours 12-24 hours to 1 hour All trademarks are the properties of their respective owners. 2010 FOCUS, LLC www.focusonsystems.com Page 23

About EMC EMC Corporation (NYSE: EMC) is the world s leading developer and provider of information infrastructure technology and solutions that enable organizations of all sizes to transform the way they compete and create value from their information. Information about EMC s products and services can be found at www.emc.com. Other Related EMC Data Domain Deduplication Storage Information Data Domain SISL Scaling Architecture http://forms.datadomain.com/go/datadomain/ws_wp_sisl_10 VMware Backup and Recovery Best Practices with Data Domain http://forms.datadomain.com/go/datadomain/ws_wp_vmwddbp_10 Other Related Focus Research Focus has published the following related reports. For more information, or to browse additional Focus research please go to http://www.focusonsystems.com/store/. Focus White Paper: The ROI and TCO Benefits of Data Deduplication for Data Protection in the Enterprise Focus White Paper: Extending D2D to Offsite DR: The ROI Case for WAN Vaulting About Focus, LLC Barb Goldworm, president and chief analyst of Focus, LLC is a well-known industry expert, frequent keynote speaker, author, and columnist on virtualization, and storage. She has spent 30 years in technical, marketing, sales, senior management, and industry analyst positions with IBM, Novell, StorageTek, EMA, and multiple startups. Barb is virtualization chair for Interop, COMDEX, and Data Center Insights, chaired Blade Systems Insight and the Server Blade Summit on Blades and Virtualization, created and chaired the Network Storage Track of Interop, and has been one of the top rated expert speakers at Data Center Decisions and Storage Networking World. Barb has been a regular expert columnist and speaker for TechTarget, Ziff-Davis, Computerworld Storage Networking World Online, Network World and Information Week. She has published hundreds of articles, business and technical white papers and market research reports, as well as the book, Blade Servers and Virtualizations, published by Wiley. Focus delivers independent research, analysis and consulting, focused on systems, software, storage, and next generation data center technologies such as virtualization and cloud computing. Focus areas include: Virtualization to Cloud Computing; Systems, Storage and Enterprise Management (Physical and Virtual); Server, Desktop, Application and Storage Virtualization; High Availability, Disaster Recovery, Business Continuity, Backup, Data Protection; Storage Networking; Storage, Network, and I/O Virtualization; Storage Technologies; Blade Systems, and Business Benefits of Technology (ROI, TCO). www.focusonsystems.com 2010 FOCUS, LLC www.focusonsystems.com Page 24