News | March 13, 2008

Storage Technology Costs Declining But Business Demand Drives Total Spending

The cost of storage technology has dropped steadily in recent years, according to data from Compass, with estimates of a decline in storage unit costs of up to 76 percent over the last five-year period. That steady improvement in cost efficiency has been more than offset, however, by business demand for storage and the rising costs of storage management, resulting in a significant overall increase in total spend on storage.

"Storage management is becoming an increasingly complex business problem, and very few organizations have a focused strategy when it comes to managing information," said Cindy LaChappelle, a Compass senior consultant. "In response to regulatory, legal, e-discovery and security challenges related to storage, many companies are simply throwing technology at the problem. In many instances, the result is a sprawl environment that creates a complex, disconnected, redundant, or under-used storage infrastructure."

Compass recommends CIOs work with business executives to develop an overall storage strategy that addresses three key issues: what data to keep; how long should it be kept; and how should it be accessed (and by whom). An overall top-line assessment of both the business requirements and the state of the current storage environment is critical to understanding company needs and for developing policies and procedures, such as when and how backups should occur, or whether the most critical data is adequately protected and accessible in the event of a disaster.

"Storage is not just the CIO's problem, or just a technology issue. Business unit leaders must view storage as a critical component of their overall data management strategy that can have a significant impact on business operations and profitability," continued LaChappelle. "Without a clear-cut plan on how to manage and control data – a business' most precious asset – storage costs can spiral out of control."

According to Compass, a storage management strategy should include service levels that classify data to manage the sheer amount of information stored at large organizations. For example, one business unit may need to store every email for ten years to address regulatory compliance issues, while another business unit may need to save emails for only two years, but have them more readily accessible.

In the absence of storage management policies and guidelines, companies have no option but to categorize every piece of information as both important and highly available, and require that information to be stored indefinitely as well as readily accessible. This approach results in inefficiency, data management issues and significant cost overruns.

About Compass:
Compass is a global management consulting firm specializing in business and IT performance improvement for Fortune 1000 organizations. Since its founding in 1980, Compass has conducted more than 8000 engagements in 32 countries. Annually, Compass delivers over 600 engagements worldwide, typically delivering savings of over 17 percent of analyzed costs.

SOURCE: Compass