HP StoreOnce Backup Solution: Business Value ROI Study

White Paper HP StoreOnce Backup Solution: Business Value ROI Study Sponsored by: HP Randy Perry October 2014 Nick Sundby IDC OPINION IDC interviewed five European companies that had deployed HP StoreOnce Backup solutions for at least six months in order to measure the overall financial impact of their investment. The benefits were of two main types: infrastructure cost savings and the productivity gains seen by IT staff and IT users. The purpose of this approach is to provide a more realistic assessment than may be obtained from a single-company case study. By talking to a group of users, the most beneficial StoreOnce characteristics can be clearly identified and highlighted. The companies represented a range of vertical sectors, including retail, finance, IT services, and manufacturing, and were considered by IDC to be average or better in terms of IT management capability. The aggregate results show an overall average three-year ROI of 402% and a 5.7-month payback period for the five companies studied, driven by savings in infrastructure investments, operational cost reduction, and user productivity increases. IDC found a strong correlation between the storage capacity deployed and the financial return achieved. In other words, the larger the deployment, the greater the savings. The financial results are therefore presented as /TB of primary storage per year, so that readers can simply calculate an ROI estimate for their own company. IDC believes that despite HP's relatively late entry into the purpose-built backup market, it has invested heavily to create a robust and flexible solution with a proven financial benefit. Users consistently praised StoreOnce for its reliability, performance, integration with backup applications, and ease of use. We saw also how virtual and physical StoreOnce instances could be combined to good effect, something that is currently unique to HP and a direct result of its Converged Storage ethos. IN THIS WHITE PAPER The paper is aimed at IT storage decision makers in medium-sized or large companies that are evaluating potential upgrades to the data protection infrastructure. The content is focused on the financial or business-value benefits rather than a technical evaluation. Definitions Purpose-built backup appliance (PBBA): A standalone disk-based solution that utilizes software, disk arrays, server engine(s), or nodes that are used as a target for backup data and specifically data coming from a backup application (e.g., Data Protector, NetWorker, October 2014, IDC #IDCWP32W

TSM, Backup Exec, etc.) or can be tightly integrated with the backup software to catalog, index, schedule, and perform data movement. Some PBBA products are ISV specific and are optimized for use with one particular backup software technology, while others are independent of the backup software being used and work with several backup software products. PBBA products are deployed in standalone configurations or as gateways. PBBA solutions deployed in a gateway configuration connect to and store backup data on general-purpose storage. PBBAs often can replicate to or from remote sites and a secondary PBBA for the purpose of disaster recovery (DR). Software-defined storage: In general, software-based storage solutions leverage either commercial or open source software or storage internal to industry-standard server hardware to organize data in the form of file, object, and/or block. The use of softwarebased storage could have tremendous implications for the disk-based protection market overall. COMMON BACKUP AND RECOVERY CHALLENGES Backup and recovery management has been an integral part of storage administration since the beginning of IT, yet it remains a bottleneck for many companies. The key driver for challenges with backup is the fact that the amount of data to be backed up continues to grow, despite the introduction of various storage efficiency technologies, and will most likely continue to grow forever. IDC research shows that companies face a common set of backup and recovery challenges, many of which were apparent in the interviews conducted for this study. The challenges can be grouped into four areas. Administration IT admin time is limited and cannot be spared to manage unreliable or overly complex backup and recovery processes. In some cases, backups are scheduled manually. A backup may complete successfully, but that doesn't guarantee that data can be recovered when needed. To guarantee recovery, test restores are needed, adding to the admin overhead. Companies often have multiple backup applications. Laptops, remote offices, critical databases, and virtual server images may each be protected by a specialized backup application. While each may be a best-of-breed solution, the aggregate administrative overhead is increased. The Backup Process Multiple copies of the same files are backed up, for example a presentation deck mailed to many staff members. Backup, replication, test/dev, and archive processes also add to the number of copies of production data. Different processes may be used to protect virtualized and physical servers. Backup processes may need manual scheduling to complete within the available backup window. Overrunning backups clog networks during production hours and impacts user productivity. Recovery Users require servers to be recovered in hours at most, and small files in minutes. 2014 IDC #IDCWP32W 2

There is generally a range of recovery speed requirements based on the criticality of the data to the business. However, the complexity of setting up multiple recovery tiers can offset or negate any cost savings. Midsize and large companies want high levels of system availability without excessive cost. Downtime of more than a few hours per year is not acceptable for critical applications. Tape-Related Issues Although tape is still relevant in the datacenter for certain backup scenarios and long-term retention, and though tape technology is evolving with LTFS driving new use cases, it is no longer the most relevant technology to meet today's data protection requirements. Manual errors in handling such as dropped, lost, or mislabeled tapes further compound recovery efforts. It costs time and money to move tapes between the datacenter and offsite vault. Companies faced with these issues should consider that an efficient backup and recovery infrastructure is a strategic necessity for the business. IT administrators that are forced to spend time and effort dealing with these issues are compromised in their ability to serve the business with new initiatives. With effective backup and recovery infrastructure, it is normal practice for IT staff to spend a few minutes only per day to check the activity logs, and nothing more. ALIGNING BACKUP/RECOVERY WITH WIDER IT OBJECTIVES Many users talk to IDC about their storage challenges and the various initiatives they have taken to reduce cost or align better with the business units. As a general observation, the most successful projects tend to include the following three elements in some form: Consolidation reduce the number of platforms or locations where possible Standardization use a common set of hardware and software elements Automation relieve IT staff of low-level manual tasks A project that includes one or two of the above can drive benefits, but if all three can be combined there is the chance for a step-change improvement that can benefit the company at a long-term strategic level. HP's Converged Storage ethos, where complexity is replaced by standardized platforms, unified management tools, and high levels of automation, closely aligns with these three elements. For example, 3PAR users are able to consolidate multiple storage silos on to fewer arrays servicing a wide range of workloads with consistent and predictable performance. Management tools and processes can be standardized, and the array has automated self-management capability that virtually eliminates the need for administrative overhead. The close alignment between PBBA functionality and broader IT objectives is one of the reasons that the technology was adopted so quickly by the traditionally cautious storage buyers. The 2014 IDC #IDCWP32W 3

alignment is also validated by the business value outcomes seen in IDC's research. Even for companies with relatively well-organized IT, the infrastructure cost savings and productivity gains combine to deliver a rapid payback period of six to nine months. FINANCIAL IMPACT OF HP STOREONCE BACKUP AND RECOVERY SOLUTIONS IDC conducted in-depth interviews with five European organizations, each of which deployed an HP StoreOnce Backup solution with at least six months' operational experience. The interviews provided information about initial investment in HP technology, deployment, and ongoing maintenance costs. The interviews also elicited the experiences of each company with tangible and measurable business benefits over a three-year period, looking both at IT and enduser benefits. IDC's Business Value team combined all of these factors to create an overall return on investment (ROI) calculation. Overall, companies saw average annual benefits of 2,081 per TB of primary storage deployed. The savings are expressed per TB so that the reader can easily estimate potential savings in their own environment. Savings are from the following areas: Infrastructure savings. Organizations reduced their capex associated with the purchase and infrastructure related to backup media by nearly 1,109 per TB annually (52.5% of total benefits). IT staff productivity. By reducing the time IT staff spent dealing with backup and recovery activities, organizations saved 389 per TB in IT labor costs per year (18.3% of total benefits). End-user productivity enhancement. End users benefit from reduced disruption from prolonged backups, and faster recovery times totaled 616 in savings per TB annually (29.2% of total benefits). FIGURE 1 Average Annual Benefits (per TB) End-user productivity enhancement (29.2%) Storage environment infrastructure cost reduction (52.5%) IT staff productivity optimization (18.3%) Total = 2,081 2014 IDC #IDCWP32W 4

Infrastructure Cost Savings Organizations in the study generally struggled with rapid data growth, aging tape infrastructures, and administrative overheads associated with backup processes. By implementing HP backup and recovery solutions, organizations experienced cost savings from elimination of old hardware and reduced spending on tape storage and services, including hardware reduction and refresh avoidance. Other cost savings came from licensing fee reduction, productivity improvements from eliminating the time IT staff spent on backup and recovery, datacenter facilities expansion, and operational costs such as power and cooling. Much of the hard cost savings came from better utilization of storage media as a result of the average deduplication ratio of 20:1. Organizations in the study achieved average savings of 75%. Looked at another way, given an average 28% annual increase in storage consumption for these respondents, the benefit generated from more efficient use of storage exceeds 17,000 per 100 users annually. Sixty percent of the companies in the study have significantly reduced or eliminated their use of tape as their primary backup medium. Those companies moving away from tape as their backup medium avoided spending 153/TB annually. Tape savings came from not only reducing tape but also by removing tape altogether, thereby eliminating the cost for tape maintenance and storage and transportation between sites. TABLE 1 Annual Storage Environment Cost Savings Average Annual Savings per TB ( ) Reduction from deduplication 75% Tape drives 153 Avoided servers 189 Facilities reduction 28 Replaced vendors 739 Average annual benefit 1,109 IT Admin Staff Productivity Gains As a result of streamlining storage management tasks with StoreOnce Backup, IT admin staff experienced significant time savings. The average time spent managing backup declined from 29.8 to 4.9 hours per week, saving each company an average of 1,295 hours annually. Time spent managing recoveries dropped by 83%, saving an additional 734 hours per year on average. Better storage backup management also led 2014 IDC #IDCWP32W 5

to fewer errors, resulting in fewer restores per year. StoreOnce performance and capacity brought about significantly quicker restores, falling from an average 10.28 to 1.09 hours per week, a reduction of 89%. Considering these companies are seeing an average capacity increase of 28% per year, a benefit of the HP backup solutions is that the existing staff can handle an increase in storage with the same number of people. In most of the interviews, the existing IT staff were at peak effort; several respondents said that their staff members were already working more than eight hours a day just to keep up with their current load. As a result, improvement in IT productivity associated with better management of data resources contributed 405/TB in annual savings. TABLE 2 IT Staff Productivity Optimization KPIs (Hours per Week) Before After Saved Improvement Time to restore 10.28 1.09 9.18 89% Managing backup 29.85 4.96 24.88 83% Storage provisioning 196.12 98.06 98.06 50% Managing operational and disaster recoveries 17.08 2.87 14.21 83% Total 253.32 106.98 146.34 58% Average annual benefit per TB 389 User Productivity Gains When backup and restore operations fail to operate in a timely manner, the IT system users are affected. For example, shorter backup windows eliminated the occasional spillover into business operations. Overrunning backups congest the network and reduce the performance of production systems. This was not common in all organizations, but where it was a problem it negatively impacted the start of the business day, In this study, IDC found that StoreOnce deployments led to an 80% reduction in the average time to restore, saving 8 hours per year per user. Additionally, respondents reduced restore time for data files by 85%, from an average of 2.67 to 0.39 hours per week. Several of the respondents reported restore times of less than 5 minutes. As a result of the improved backup windows and the accelerated recovery times, IDC calculated benefits of 15.13 hours per user per year, resulting in savings of 616/TB per year. 2014 IDC #IDCWP32W 6

TABLE 3 End-User Productivity Enhancement Hours Saved per Year per User Before After Saved Improvement Data storage errors per month 0.75 0.64 0.11 15% Recovery time (hours) 10.00 2.00 8.00 80% Total hours saved per user 18.00 3.06 14.94 83% Restores per week 3.85 2.81 1.04 27% Restore time (hours) 2.67 0.39 2.28 85% Total hours saved per user 0.22 0.02 0.19 90% Hours saved per year by restore rather than retrieval 0.29 0.29 100% Total 18.51 3.08 15.13 83% Average annual benefit per TB 616 TABLE 4 Demographics Average Average number of employees 9,434 Average number of IT end users 7,547 Average number of TBs of storage 1,016 Annual growth rate for storage 28% Average number of IT staff 700 Geography Industry Austria, Germany, Malta, Norway, Russia Education, financial services, manufacturing, retail 2014 IDC #IDCWP32W 7

ROI Analysis As with any IT solution, most of the investment takes place up front. Average initial investment in HP StoreOnce Backup ranged between 173,000 and 503,000, including purchase, deployment costs, and training. Total investment over a three-year period averaged 888 per TB. Benefits start at zero and only accrue after the initial deployment period (in this case, deployment took around one month on average). Benefits totaled 4458 per TB over the same period, yielding a cumulative gain of 5,804 per TB (see Figure 2). FIGURE 2 Three-Year Cash Flow Analysis per TB 7,000 6,000 5,000 4,000 3,000 2,000 1,000 0-1,000 5,804 3,527 1,251-534 Initial 1 2 3 Annual Investment Annual Benefit Cumulative Cash Flow The three-year ROI analysis shows that on average the companies in this study spent 888 per TB (12% discount rate) deploying and maintaining HP backup and recovery solutions and received 4,458 per TB in benefits for a net present value (NPV) of 3,570. The companies saw a payback period of 5.7 months and an ROI of 402% (see Table 5). 2014 IDC #IDCWP32W 8

TABLE 5 Three-Year ROI Analysis per TB Benefit (discounted) 4,458 Investment (discounted) 888 NPV 3,570 ROI (NPV/investment) 402% Payback (months) 5.7 Discount rate 12% HP STOREONCE BACKUP OVERVIEW HP Introduced StoreOnce Backup in 2011 to meet the data protection needs of high-growth enterprise and midmarket companies. Although relatively late to market, HP's intention was to utilize its development resources to create a product that would overcome the shortcomings of first-generation PBBAs from other vendors. The portfolio is broad, starting with a software-only version for small users up to 4TB, a range of single-node units for midsize companies, and multinode scale-out systems up to 2.2PB raw capacity for the largest users. A federated deduplication engine permits efficient replication between sites, and all major backup applications are supported. StoreOnce Federated Catalyst offers global deduplication in a single pool across multiple nodes. StoreOnce Backup and 3PAR StoreServ are arguably the stars of the rejuvenated HP storage business, driving growth for the company in fiercely competitive market segments. HP has promoted StoreOnce aggressively with performance guarantees, business partner enablement, and special sales focus. This paper presents a somewhat clinical analysis of StoreOnce deployments and the financial impact. However, the user interviews revealed a consistently positive and enthusiastic view of the product. ROI is a before-and-after comparison and if the legacy equipment wasn't working as it should, it's a massive burden for the IT staff. Alleviating the problems was clearly a stress-buster and freed up time that could be devoted to other projects. 2014 IDC #IDCWP32W 9

TABLE 6 StoreOnce Key Characteristics and Associated Business Value Key Feature StoreOnce Functional Characteristics Business Value Benefit Scale-out architecture For multinode B6200 and new 6500 models. Add capacity kits to scale capacity or additional 2-node couplets to scale throughput performance. StoreOnce capacity and performance can be upgraded independently to meet unknown future requirements. Effective lifespan of nodes is extended, increasing return on assets. Added resilience and availability due to a redundant pair of nodes, where one can take over from the other in the event of hardware failure. Virtual storage appliance option Software-only license. Up to 4TB or 10TB capacity. Runs on general-purpose server hardware. Can replicate to physical StoreOnce instances. Compatible with StoreOnce software in Data Protector and the StoreOnce appliances. Lower cost entry point for small users. Can be used in remote office locations to back up local systems then replicate to physical units in the primary datacenter, reducing the need for local backup hardware and administration. Backup can be managed centrally for all remote sites in a distributed organization, lowering hardware and admin cost. Deduplication performance Very small, variable deduplication block size. Federated deduplication across entire StoreOnce environment. Better deduplication ratio means more backup data can be held online for faster restores, saving time for users and IT staff. 6 12 months of online backups is common. Restore performance StoreOnce restore performance is equivalent to backup ingest rate. Some PBBA systems perform slower in restore than backup due to the rehydration overhead. As StoreOnce restore and backup performance are equivalent, restores are executed more quickly, saving user and admin time. CHALLENGES FOR HP STOREONCE BACKUP The PBBA market was effectively created in 2005/2006 when deduplicating backup targets transitioned from the early-adopter phase to mainstream acceptance, mainly in the large enterprise sector. As the early technology leader, Data Domain established a substantial market share lead over other vendors, but the market is now somewhat more open. As of 1Q14, five vendors together accounted for 86% of worldwide PBBA revenue. For the 12 months to 1Q14, HP was the only one that increased its market share. 2014 IDC #IDCWP32W 10

IDC believes HP has a strong value proposition but also faces challenges as it works to increase its presence in the PBBA market. An important differentiator for HP is the ability to run StoreOnce as a virtual storage appliance (VSA) on a conventional virtualized server. IDC has interviewed companies that have used the VSA option successfully in regional offices, replicating back to physical StoreOnce units in the datacenter. A VSA is a form of software defined storage (SDS), one of the storage industry's current buzzwords. HP's solution appears to be both proven and powerful. The challenge is therefore to overcome SDS-driven reticence and show customers how a VSA can save money and resources. In terms of cloud adoption, cloud-based service providers are offering lower-cost alternatives for backup, recovery, and archive compared with many on-premises, appliance-based, or hybrid solutions. IDC expects greater adoption of cloud-based protection and recovery services in the future. Currently there are many hybrid solutions being offered with physical appliances acting as a gateway to the cloud, or holding local copies of data for faster recovery. If HP can integrate data management for on-premises and cloud storage it will capitalize on cloud storage adoption. FUTURE OUTLOOK IDC forecasts that the disk-based data protection and recovery market will grow robustly through 2014 2018 with a compound annual growth rate (CAGR) of 6.6%, with revenue totaling $18.2 billion in 2018. We expect rapid growth in capacity shipped for disk-based data protection. We expect total capacity shipped to increase at a 24.7% CAGR, totaling 19.9EB (exabyte) at the close of 2018. Cloud-based backup and recovery solutions are beginning to gain adoption, and this will have an effect on the total capacity of general-purpose as well as purpose-built on-premises hardware and software products used for data protection and recovery. IDC expects the disk-based data protection and recovery market to evolve to meet the needs of 3rd Platform computing trends such as greater integration with cloud-based architectures, increased use of flash as a storage tier, and infrastructure convergence with storage and networking as well as software-based storage. Disk-based data protection and recovery will remain a critical process in the highly distributed and virtualized 3rd Platform era. Increasingly, data protection and recovery solutions will need to be designed to be decoupled from proprietary storage architectures. CONCLUSION AND ESSENTIAL GUIDANCE The StoreOnce users interviewed by IDC came from a broad range of company sizes, types, and vertical segments. All were able to derive significant business value from StoreOnce, demonstrated by an average payback period of 6 months with a return on investment of 401%. The business value comes from a combination of infrastructure cost savings (e.g., tape replacement), IT staff time saving (e.g., less time required to manage backups), and from productivity gains for 2014 IDC #IDCWP32W 11

the IT users. The savings correlated with the primary storage capacity, amounting to an average 2,081 per TB annually. Many companies have scaled back or postponed investment in backup and recovery during the recession, only to see data volumes continue to grow. In this climate, sign-off on capital projects requires that IT managers can provide a clear and compelling financial argument to justify the investment. In this study, IDC has proved that StoreOnce Backup solutions from HP have consistently provided significant financial, operational, and strategic business benefits, resulting in a rapid return on investment. Companies that are looking to invest in similar backup projects should consider the following factors in assessing the available solutions: The most effective solution may include a combination of integrated elements. IDC found that companies using both HP StoreOnce and HP Data Protector obtained higher levels of performance, operational cost saving, and financial return than those using only one product in the portfolio. Use "consolidate/standardize/automate" as a yardstick. How does the proposed solution contribute to each area? Measure the time required to schedule, manage, and check the backup and recovery processes. Most companies underestimate how much time is really required, including when things go wrong. Tape is often marketed as having the lowest $/GB of all media. While this can be true, it often ignores the significant cost of tape management, handling, and offsite vaulting. The efficiencies in modern disk-based backup systems mean they are equally, if not more, financially viable than tape for data protection and recovery. Get up to date with next-generation backup and recovery solutions. Many companies struggling with legacy tape systems are delaying investments because of outdated or illinformed opinions. In summary, the current generation of HP StoreOnce Backup solutions can provide significant, consistent, and proven benefits to companies that need to upgrade their backup and recovery capabilities, particularly where companies have virtualized infrastructure, constrained IT resources, and legacy tape hardware. 2014 IDC #IDCWP32W 12

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