Storage Pricing is Insane

by Marc Tanguay – June 9, 2015

What is the number one issue customers have with storage pricing?  Here’s a hint: It is not the overall cost. Rather, what drives customers crazy is the complete lack of transparency in how storage is priced.  Want to get a quote for 200 terabytes of storage for your data center? Good luck!  You’ll have to endure a complex sales process with multipage quotes and pricing that defies logic.

Why? There are a few of reasons. Task 1 hasn’t changed: How much raw capacity do I need to buy to support my applications? Whether using traditional RAID for file and block applications or Object Storage with erasure encoding, I still have to go through the raw versus usable capacity dance. 

You will also need software for storage-related items like backup, archival, deduplication, replication and tiering.  You also need to include power and cooling costs. The process of simply adding capacity is easier, but users are tired of getting gouged with unreasonable markups for disk shelves.

Maintenance pricing is another source of confusion and angst. It is the dirty little secret vendors obfuscate intentionally.  A reasonable 3-5 year TCO can turn upside down on this segment alone.  The variations are endless: Same Day Platinum, Next Day Gold, Parts Only, Self Support (why do I pay for that?).  Software subscription only? Should I consider an option for a dedicated support manager to avoid the 1-800-who the hell are you line?

Then there is the choice of how long an agreement to purchase.  One year?  Two?  Five?  Should I pay upfront and get the discount?  What if I’d like to refresh hardware in the middle of the support agreement term – will my software licenses transfer?

Pricing for storage is out of control.

Manufacturer Practices Make It Worse

It doesn’t help that the way vendors communicate your storage costs is byzantine and opaque.  I have yet to see a quote for storage from one of the major vendors that is less than two or three pages with a minimum of four sections (hardware, software, maintenance and services).

Worse, discount policies are complex and confusing.  A lot of vendors strive to make it look like most of their revenue is software based.  So, they almost give the hardware away and mark the software up.  Combine this with unrealistically high list prices and deep discounts and you have a formula for mass confusion.

In practice, I have found that it is almost impossible to compare capacity quotes between vendors.  Why?  Because protection is done so differently between vendors, which makes it difficult to ascertain precisely how much of the storage you buy is actually usable.

Cloud Storage?

Ahhhh, but cloud fixes all of that, right?  It does help a lot because you pay for a fixed amount of storage on a per-unit of time basis.  Getting a quote for 300TB of storage is a simple process from most cloud storage vendors.

BUT (and you knew there would be a ‘but’), it is not always that simple.  What happens when you transfer a large chunk of data to the cloud and suddenly need to move that data from the cloud to your premises to work on it?

The ‘standard’ bandwidth vendors allocate for retrieving your data is simply not up to the task.  In fact, it can easily take five days to move all of the data you need to your data center where you can finally use it.  If you want faster, that’s fine, but you’ll pay extra for that.

In the real world, this often leads to an ‘Oh No – What Have I Done’ moment where you realize you misestimated your true cost of storage by a very large margin.  Visions of your career flash right before your eyes.

That’s why I know of at least two major corporations where IT’s official policy is to allow cloud storage ONLY if the user’s division pays for it.  Why?  Because IT has decided it is simply not possible to know your true cost of ownership ahead of time with cloud storage.  IT simply refuses to be the ones left with the huge, unforeseen bills.

Anyway, that’s my cut on storage pricing.  What really matters is what you think.  Let me know, has your vendor been transparent with you?  Is your process of acquiring and deploying infrastructure in your data center been easy?  What do you wish your vendor did to make your life easier?

The Answer: Cloud Pricing, On Premises

For many projects, traditional cloud storage works fine.  Typically in cases where you have a small amount of storage and your users require remote access.  User’s home directories are a perfect use case for this.  In cases like this the ‘standard’ bandwidth for accessing data is fine.

But for cases where you have a LOT of storage, and if you need to use that storage it needs to be staged to your data center, traditional cloud storage has fatal flaws (as we have seen).

For example, you are a major studio and you need to re-render one of the final scenes unexpectedly (maybe it didn’t focus-group well).  You only have a few days to complete the render and your data is stuck in the cloud.  You start to restage it to your data center and quickly realize that will take 5 days.  You ask for faster and get a quote for an astronomical bandwidth upgrade. 

That is what I mean by an ‘Oh No – What Have I Done’ moment.

The optimal solution in cases like this is local storage, with cloud-pricing.  Essentially, you pay for a fixed amount of storage on a per unit of time basis (i.e., cloud-style pricing) yet your data stays in the data center.  No surprise charges when you need to retrieve it.

This eliminates the crazy, confusing pricing models of traditional storage, yet avoids the ‘Oh No – What Have I Done’ moments of traditional cloud storage.

Is such a model available?  That’s a discussion I’ll leave to a future post, but for now I’ll just say ‘stay tuned.’