Asia/Pacific Headquarters: 80 Anson Road, #38-00 Singapore 079907 P.65.6226.0330 www.idc.com W H I T E P A P E R A s s e s s i n g t h e B u s i n e s s V a l u e o f E M C B a c k u p a n d R e c o v e r y Sponsored by: EMC Simon Piff November 2013 E X E C U T I V E S U M M A R Y Backup and recovery is a critical component of enterprise data management. However, many enterprises are finding that the processes and technologies that they have implemented have not kept pace with the demands of the business, not least of which are the increased demands by the business around data access. Information management vendors have evolved their technologies to stay in line with the expectations and needs of today's businesses. In this White Paper, IDC offers up some quantifiable benefits that Asian enterprises have observed as a result of deploying backup and recovery solutions from EMC. The process by which IDC identified these benefits is an established program within IDC called IDC ExpertROI and this identifies how organizations can experience economic enhancements in the form of savings and improvements from the deployment of different types of technologies. The benefits fall into three categories: storage environment cost savings; end-user productivity enhancements; and IT staff productivity optimization. The organizations that participated within this study reported the following returns on investment: Average cost savings of US$2.6 million annually. End-user productivity gains of US$1.1 million annually. Storage environment savings of US$1.1 million annually. Improvements in IT staff productivity of US$359K annually. Average payback period 6.4 months. 412% Return on investment over 3 years.
S I T U A T I O N O V E R V I E W The pressure on Asian businesses has never been greater due to uncertain economies, greater global competition, massive data growth, and the need to comply with both local and international laws and regulations. For many years, Asian organizations have been able to produce goods and services for export to the markets of USA and Europe, but that situation is reversing due to the changes in the global economy. China is the second largest market in today s economy and Asia is the organic growth engine for the global economy, resulting in many of Asia s customers now setting up in Asia and competing with the local players. The major challenge to Asian businesses is that, for many years now much of the US and European markets have been squeezing efficiency into all aspects of their organizations to create lean, agile businesses, whereas in Asia the lower cost of labor has left many with overgrown manual processes which, at the time, seemed inexpensive, but now that the competitive landscape has changed, is leaving the Asian organizations in a situation where they are unable to compete as effectively as the incoming foreign competition can in their local markets. Much of this is due to a lack of automation and optimization tools which had, until recently, not been deemed necessary by many. This is beginning to change and nowhere more so than in data management, an area in which Western cultures have clearly demonstrated the value that can be derived from efficient data management. Until recently, one area that has received little exposure is backup and recovery. These solutions have evolved and are now combined with data optimization tools such as deduplication. For many storage managers, the idea of deploying such storage efficiency technologies has not even been on their radar. The storage industry has, for the longest time, lived on the mantra that disk is cheap and costs are coming down and this is a true statement. However, what is changing is the value of the data on the disk and how easily it can be accessed, how securely it can be backed up, and how the performance of the underlying systems can meet the ever increasing performance demands of business users. This is a radical change in philosophy for many storage managers who have been concerned mainly with response times, data growth and data availability, which today are mere hygiene factors in an agile organization. In an effort to help organizations in the Asia/Pacific region better understand the value and benefits of such tools, EMC commissioned IDC to conduct a study to reveal the business impact from investing in EMC solutions. This project is an extension of similar EMC-sponsored projects undertaken in the US and EMEA markets. C O N F R O N T I N G A R E A L D A T A M A N A G E M E N T C H A L L E N G E IDC conducted interviews with three organizations in the Asia/Pacific region that have implemented one or more EMC s solutions, to address their storage management challenges. These organizations each discussed with IDC their business and technical issues faced prior to deploying the solutions, and shared the outcomes postdeployment. IDC incorporated this data into the IDC ExpertROI model to establish return on investment data. 2 #AP14987W 2013 IDC
B a c k g r o u n d o n t h e C a s e S t u d i e s The three organizations seem to have little in common, considering their diverse industry backgrounds. Company A is a Japanese manufacturer with 1,500 staff, a team of 16 IT staff, and a turnover of around US$850 million. In terms of storage, the IT team manages 10 terabytes of data. Company B is an Australian professional services organization with 7,500 staff, 150 IT personnel, and an annual turnover in the region of US$1.2 billion. The IT team manages 780 terabytes of data. Company C is a Chinese financial services organization with staff strength of 5,000, a team of 380 IT staff, and an annual turnover of US$3 billion. The firm manages 1,010 terabytes of data. Table 1 offers a snap shot of their backgrounds. T A B L E 1 Q u a n t i f y i n g t h e R e t u r n o n I n v e s t m e n t Country Industry Revenue (US$M) Total Staff IT Staff Data Size (TB) Company A Japan Manufacturing 850 1,500 16 10 Company B Australia Professional Services Company C China Financial Services 1,200 7,500 150 780 3,000 5,000 380 1,010 Source: IDC, 2013 The first thing to notice about these organizations is the lack of similarity in their organizational size, IT staffing versus total staff, and the amount of data that is under management by the IT team. However, a further look into how each organization has forecast data growth based on their current expectations reveals similarities in terms of their challenges. Each organization was asked to forecast how they thought their data would grow in the next five years and the results were quite astonishing. Company A has been in existence for more than 120 years and, as such, one would expect a reasonable understanding of their data growth requirements and have forecast the most conservative growth levels at 33% growth over a 5-year period. Company B, which was launched towards the end of the last century, has forecast data growth over the next 5 years to be 722% more than is currently in place. This is not an unrealistic number, considering the nature of its business a professional services organization where the capture and maintenance of intellectual property will contribute to the growth of data over the coming years. Company C, a Chinese financial services company is the youngest, having been established in 2005, but has forecast data growth over the next five years to be more than 10 times more than the existing levels. Whilst this seems an outrageously high number, there is strong probability that these levels will be reached, for a few key reasons. First, the company is growing 2013 IDC #AP14987W 3
rapidly and in a market like China, growth rates can be very high. Secondly, and perhaps more impactful, is the fact that the Chinese financial markets are only just beginning to adopt the levels of regulations that many other markets already have, and this means compliance with data capture and retention, which has significantly driven up the volume of data under management in other markets. So whilst at first glance a five-digit growth rate may seem untenable, it is a fact that in China, this type of data growth is highly probable within certain verticals. This background provides a strong indication of the challenges that each organization faced and how they chose to address those challenges. L o n g B a c k u p T i m e s a K e y B u s i n e s s I s s u e For each of the three organizations, there was a business concern that needed to be addressed and the issue was similar the time taken to backup data was just too long. This did not, at first glance, seem like a business issue, but it did translate into a negative impact on the business operations. For all three organizations, the process of backing up their data, prior to the implementation of the EMC solution, was a long, slow and laborious process. Company C took more than three days to complete a full backup. The net result being that, due to the protracted project timeline for something as simple as backup, they had more than 10,000 end-user devices which had no viable backup solution a potential business disaster in the making. Company B was challenged in the time frame taken to create the backups but also in the lag in recovering data. With around 20 sites to manage, it took approximately 6 hours a week to create the backups, but recovering data from the tapes that were created during this process took days to execute, clearly leading to impacts on the business operations and the speed with which the business was able to execute. Company A was struck by similar challenges in terms of the management and maintenance of tapes, and the costs associated with this were also becoming a significant burden to the organizations. The deterioration of the physical tape media was demanding that the tape be actively managed and maintained, which drained valuable organizational resources that should have been applied elsewhere. T e c h n o l o g y C h a l l e n g e s f r o m T a p e At a technological level, tape as a backup medium has proven to be inexpensive, but not necessarily reliable and certainly not agile. Errors that can potentially occur frequently during the backup process are not immediately discoverable until the tape is required. Even the basic restore process could take a long period of time, since the tapes are sent offsite for storage and the rest of the process, such as identifying the tape, ordering it, having it returned to the business before restoration was possible, took a significant amount of time. The time taken to create backups in these environments was also a significant challenge to these organizations. In the case of one organization, backup was a three-day process and, with the pace of change of the organization, was incomplete as soon as it had been completed since it was immediately out of date. In summary, the main challenge facing these three organizations was that the use of tape as a backup medium was complex, slow and no longer suitably aligned to how 4 #AP14987W 2013 IDC
the business wanted to make use of the data. This created challenges for the IT department in their ability to deliver on what the changing business requirements demanded. Another challenge was that the inability to effectively backup the data set within a reasonable amount of time meant that the IT department was very conscious of managing data growth and had to introduce policies and processes that would ensure the data growth came within manageable levels. This type of approach would have caused quite significant friction between the business and the IT department. S o l u t i o n s a n d O u t c o m e s For all three organizations, the solution was based on EMC solution offerings: EMC Data Domain, EMC Avamar and EMC NetWorker. EMC Data Domain Data Domain appliances significantly reduce the backup data footprint with deduplication technology. Data Domain technology uses inline deduplication, which means it analyzes ingested data and looks for data segments previously encountered and stored by the system, therefore writing only unique data to disk. Duplicated data segments are only stored as pointers, which can reduce the storage requirement by an order of magnitude over time. Data Domain systems support a range of interface options and protocol support, including VTL, CIFS/NFS, Symantec OST, EMC Data Domain Boost and NDMP. EMC Avamar EMC Avamar takes a full backup every time, which in turn greatly improves recovery performance. Sub-file deduplication is performed on the client data before it is sent over the network to the backup device. Only a single instance of each sub-file segment is held in the backup and is therefore only ever backed up once. This is particularly effective when backing up virtual server environments, such as VMDK image files which are running the same operating system and tend to have a high proportion of common data between them. Eliminating redundancy can reduce the size of the virtual machine (VM) backup by a factor of 40 60x, allowing it to be run at any time during the day without disrupting critical application workloads. EMC NetWorker EMC NetWorker is unified backup and recovery software that provides backup and recovery for a broad range of mission-critical applications, operating systems and storage devices. This software application provides a single point of control for both traditional and next-generation backup approaches, including backup-to-disk, backupto- tape, snapshot and replication management, and deduplication. EMC NetWorker is integrated with both EMC Avamar and EMC Data Domain, enabling customers to incorporate data deduplication into existing backup processes. NetWorker provides backup capabilities for both physical and virtualized environments. 2013 IDC #AP14987W 5
O V E R C O M I N G B A C K U P A N D R E C O V E R Y C H A L L E N G E S Company A: A tale of both manpower and cost savings Company A deployed EMC Data Domain in their AS400 IBM i environment. The most immediate return was the ability to consolidate storage vendors, specifically in terms of managing the tape cartridges that had to be sent offsite. This had an immediate financial benefit to the organization as there were daily costs incurred for transporting the tapes and storing them. This included removing an entire cabinet of tapes from the data center. Over time, the organization realized savings in a number of areas such as a reduction in the time taken to conduct backups, significantly decreasing the cost of maintenance. Critically for the business, the implementation of the EMC Data Domain solution helped the organization to lift the limitation on data creation by the business, permitting them to become more agile in the creation and the restoration of backedup data. At the same time, the number of administrators required to manage the backup operations has been reduced by two-thirds, translating into a significant amount of cost savings over the course of a year. Perhaps the most significant business impact is that data that was previously stored on tape, which took a long time to restore, can now be done with EMC Data Domain in one-fifth of the time. Company B: Giving the business the reassurance it needs Company B implemented the EMC Avamar solution which is highly leveraged for offsite replication purposes. They implemented the solution across 45 remote sites (it took around 26 days of total effort by dedicated technicians) and they were immediately able to eliminate 20 backup tape drives, which in turn meant that the organization could see savings on their annual purchases which was one or two incremental tape drives. The EMC Avamar solution enabled the company to implement a capacity management strategy (previously it was on an ad hoc and reactive basis, buying new disk and tape drives as capacity demanded, rather than forecasting and planning around how the systems would be needed for the future). Importantly for this organization, they were able to move from a file-level only backup environment to the ability to back up entire virtual machines on a nightly basis, providing the ability to roll back and restore single virtual machines if needed, or indeed individual files, a much greater level of protection and recovery granularity than had previously been available. The ability to have a more rapid disaster recovery operation was also something that the EMC Avamar solution has enabled. Prior to the solution, roll-out backups were only sent offsite on a weekly basis, something that used to take 48 hours to accomplish, but with EMC Avamar this now happens on a daily basis and the weekly data backup now only takes around 10 hours to complete, and restored data is available more quickly than when it was under the previous solution, providing improved levels of assurance to the business. 6 #AP14987W 2013 IDC
The system has further resulted in a reduction in load on the file servers, allowing weekend users to enjoy far improved performance and the organization as a whole to have far more confidence in backups as well as to enjoy much greater recoverability. Time has also been saved due to the technical approach of the EMC Avamar solution in creating each backup as a full backup. The result has been a rapid improvement in the ability to source data for restores, saving the organization hours of not having to search for the correct tape. Some of the most significant savings have come from the resources required to manage the backup process across the approximately 20 sites that the organization operates. Prior to the EMC Avamar deployment, it took around 120 man hours to manage the backup process for these sites utilizing the time of around 22 full-time employees. After EMC Avamar was deployed, this was reduced to around two fulltime employees and around 16 hours of effort, an 87% reduction in time and a 91% reduction of effort. Company C: Keeping pace with regulatory requirements Company C has deployed the EMC Data Domain and EMC NetWorker solutions to address the issues of backup and recovery in an environment of hyper data growth. Prior to deployment it could take up to 3 days to effect a backup of their file system and the resulting effect being that other systems would have to queue and wait for the tape resources to be available for backup. Clearly within the financial services industry this was an untenable position, especially since significant parts of the file systems remained unchanged over long periods of time. In the new environment with EMC Data Domain and EMC NetWorker solutions in place, the 3 days have been reduced to zero. The organization has managed to save money on the thousands of tapes that were being used (along with the necessary drives and automation); however, and perhaps more importantly in an environment that is undergoing rapid changes in legislation around data management, they now have a total data protection and disaster recovery solution. The organization is operating far more effectively and the IT team is able to offer far improved service levels agreements with the business. 2013 IDC #AP14987W 7
R e s u l t s o f t h e R O I A n a l y s i s IDC conducted in-depth interviews with the three organizations. The key metrics established are listed in Table 2. T A B L E 2 A s i a / P a c i f i c C a s e S t u d i e s a t a G l a n c e Demographics Average Average number of employees 4,667 Average number of IT end users 4,388 Average number of TBs of storage Average growth rate for storage Average number of IT staff Average number of storage management staff Geography 500 40% 189 7 Australia, China, Japan Industry Consulting, Consumables manufacturer, Insurance Source: IDC, 2013 The organizations that participated within this study experienced annual cost savings of US$2.6 million annually (see Figure 1). The largest area of improvement was found in end-user productivity which was enhanced by US$1.1 million annually (see Table 3). For the most part, this improvement was due to the time that was saved by moving from the older and slower tape technologies to the more up-to-date disk-based offerings from EMC. As this provided the opportunity for higher levels of automation and a more robust underlying technology, there was a significant reduction in the amount of errors that would likely to occur. Clearly the ability to have massively improved recovery times has provided a huge opportunity to improve, in this case by saving over 15 hours per user per year which significantly contributes to time savings. 8 #AP14987W 2013 IDC
T A B L E 3 E n d - U s e r P r o d u c t i v i t y E n h a n c e m e n t ( H o u r s S a v e d P e r Y e a r P e r U s e r ) Before After Saved Improvement Data storage errors per month 2.17 0.01 2.16 99.5% Recovery time (hours) 16.00 0.75 15.25 95.3% Total hours saved per user 4.38 0.00 4.38 99.98% Average annual benefit ($) 1,133,161 Source: IDC, 2013 Storage environment savings, as shown in Figure 1, were US$1.1 million annually, of which the most significant savings were in storage media. Since both EMC Avamar and EMC Data Domain provide deduplication, and in all cases that deduplicated data is now consuming significantly less disk space than was previously, this is significant savings both now and in the future. F I G U R E 1 R e a l i z e d A v e r a g e A n n u a l B e n e f i t s Source: IDC, 2013 IT staff productivity improved to the amount of US$359,000 annually and here there are multiple areas of savings. Expressed as hours per week, the total time saved is 30 hours per week which in a 40-hour working week translates to a massive saving. Managing backup was the most significant area of saving with a 73% improvement and slightly more than half of the overall benefit to the IT staff productivity metric. As this is a very low value role (unless something happens), this contribution is 2013 IDC #AP14987W 9
significant in that it now allows IT resources to begin to look into how better to utilize their time. T A B L E 4 I T S t a f f P r o d u c t i v i t y O p t i m i z a t i o n K P I s ( H o u r s P e r W e e k ) Before After Saved (US$) Improvement Managing Backup Storage Provisioning Adding new applications 20.75 5.00 1.00 5.67 0.25 0.10 15.08 4.75 0.90 73% 95% 90% Storage allocation (includes tape management) Managing capacity Uploading or re-loading data Space reclamation 1.00 1.50 4.00 5.00 0.25 0.30 1.53 0.15 0.75 1.20 2.47 4.85 75% 80% 62% 97% Total 38.25 8.25 30.00 78% Average annual benefit 358,860 Source: IDC, 2013 C H A L L E N G E S A N D O P P O R T U N I T I E S Although this White Paper clearly points to huge opportunities to save within the backup and restore part of the overall IT ecosystem, the critical challenge in the Asian markets is a general low level of strategic consideration for the storage infrastructure. For a number of years now, IDC has tracked the deployment of efficiency technologies such as de-duplication, thin provision and the like, but the adoption rates in the Asia/Pacific region are incredibly low. Further research has uncovered anecdotal evidence to suggest that this is a result of poor planning and strategy of many IT projects and a regular failing during the budgetary process to allocate sufficient funds to the storage infrastructure at the outset of a new project. As a result, when the time comes to deploy the storage components, these useful technologies usually suffer from insufficient funds and are often cut in favor of cheaper (in terms of capex) solutions. Over time, the business starts to make greater demands on its underlying storage and, as shown in the real-world experiences of three companies studied here, remedial action needs to be taken to bring the underlying storage systems up to a level that the business requires. In the interim, between the old and the new, the organization has suffered the ignominy of restrictive data storage practices, reduced speed in the market and possibly missed a number of business opportunities due to the lack of performance in the infrastructure. Consequently the business will have suffered high degrees of frustration with their internal IT, assuming they have not already moved off to adopt a cloud solution outside of the control of the internal IT department which has lost credibility with the business. The opportunity for EMC and its potential customers today is to realize that data is critical to business performance in today's highly data-driven business environment. The speed at which business takes place has accelerated far beyond the 10 #AP14987W 2013 IDC
expectations (or abilities) of many older IT systems, and short-sightedness is more likely to kill a business than be a bad risk. By ensuring that the backup and restore solutions are able to operate at a pace that actually supports the business by offering enhancements in terms of business continuity and disaster recovery and the capabilities to scale with the exponential data growth expectations of the future is going to be critical to the success of many organizations in the future. EMC needs to ensure that this message is clearly articulated to those that make storage choices, in a manner that they can deliver to the budget holders, and thereby avoid the need to retrofit at the point in time when older tape-based systems can no longer cater for the demands of business today. E S S E N T I A L G U I D A N C E Data growth is inevitable. Data is being created at an ever exponential rate and the more data an organization creates, the greater the potential to analyze that data which is being created. This is an unavoidable fact of business today in this highly digitized world. The current trend in decision support systems or business intelligence is that of Big Data; combine this with the ever increasing pressures from greater globalization will make demands on Asian-based businesses that many have been able to avoid up until now. Hyper-competition in the mature markets of Europe and the US are driving all kinds of businesses to look at opportunities in the Asia/Pacific markets, and the more mature markets have already used technology to drive out inefficiencies in their overall business operation. More recently in terms of their data management capabilities and armed with this new competitive competence, these organizations are bringing their business models to the Asia/Pacific region. This means that local businesses in the region will now compete head on with organizations that have more mature and robust data management practices. Although local relationships will still count from an ongoing perspective, the ability to spot a new trend and act profitably upon it will lie with those organizations that can manage their data in a more dynamic and agile manner. Whilst it may not currently seem a highly critical part of the overall system, the practices and processes around backup and restore of the underlying data are critical to the efficient and effective ability for business to quickly identify and act upon these potential new opportunities. As highlighted in this White Paper, a good solution can provide a rapid ROI in dollar terms and also offer enhanced agility to the business. Organizations that are currently challenged by mundane issues, such as long backup windows and tape management challenges, should quickly move to a more dynamic environment to enable their IT teams to move up the value chain. This will enable valuable internal IT resources to deliver more value-added services to the business than simply monitoring a backup system. 2013 IDC #AP14987W 11
M E T H O D O L O G Y I D C s R O I M e t h o d o l o g y The IDC Return on Investment (ROI) methodology measures the efficiency of these solutions to calculate returns on deployment in four steps: 1. Evaluate the internal and external costs of administering systems before deploying the solution. 2. Ascertain the investment in the purchase, implementation, and deployment of solution. 3. Measure the cost savings and gains in productivity, availability, and efficiency achieved. 4. Calculate the payback period and finally the ROI for the deployed solution. ROI and Payback Period Calculation Assumptions Time values are multiplied by burdened salary (salary + 28% for benefits and overhead) to quantify efficiency and manager productivity savings. Downtime values are a product of the reduction in downtime hours multiplied by the number of users affected and their hourly rate. Because not every hour of downtime equates to a lost hour of productivity, IDC specifically asked about the percentage impact of an hour of downtime and attributed a fraction of the hourly result to the dollar savings. The net present value of the 3-year savings is calculated by subtracting the discounted 3-year investment from the discounted 3-year benefit. IDC uses a 12% discount rated. 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 2013 IDC. Reproduction without written permission is completely forbidden. 12 #AP14987W 2013 IDC