A Business Case for Disk Based Data Protection
A Business Case for ... 1
Disk Based Data Protection A Business Case for Disk Based Data Protection... 1
A Business Case for Disk Based Data Protection ... 2
Executive Summary... 3
The State of the Industry: Tape versus Disk Backup... 4
Tape Backup Issues ... 4
A New Paradigm for Local and Offsite Backup ... 6
Capacity Optimization ... 6
Replication over the Network ... 7
Data Domain: An Innovative Leader... 8
Building the Business Case ... 10
Financial Analysis Measures ... 10
Effects of D2D on TCO ... 10
Case Study 1: Goal = Less Tape... 11
Case Study 2: Goal = Faster Backup/Restore ... 13
Case Study 3: Goal = Tapeless ... 15
Conclusion ... 16
Executive Summary
Dramatic reductions in the cost of disk along with new Capacity Optimization (CO) or commonality factoring techniques yielding 20:1 data reduction ratios change the data protection market landscape. This new cost formula, coupled with very real benefits in improved reliability, faster backups and restores, reduced management issues, and regulatory compliance create a new paradigm for data protection.
Disk is now a viable, cost- competitive option for both local backup and offsite Disaster Recovery protection.
This paper first examines the state of the industry relative to Disk-to-Disk (D2D) adoption. It explores issues with tape backup, cost aspects of new, less expensive disk with capacity optimization, and the tangible and intangible benefits of moving to D2D.
The second half of the paper discusses financial analysis such as Total Cost of Ownership (TCO), Return on Investment (ROI) and payback periods and how they can build a strong business case for D2D and Capacity Optimized Storage (COS). We present three case studies of actual users who are moving from tape to D2D in varying degrees (from disk backup as nearline storage with no changes in tape backup procedures, to a complete elimination of tape).
The potential for dramatic reductions in cost per Gigabyte (down to $1/GB) shown here with Data Domain’s Capacity Optimized Storage, changes the entire cost formula for Data Protection TCO. With the kind of ROI achieved by Data Domain users in these case studies (176%-523%), along with the Total Savings ($180K to $1.4M) and the types of payback periods they experienced (4-5 months), it is clear that Data Domain offers proven cost savings and a strong, persuasive business case across a variety of scenarios.
The State of the Industry: Tape versus Disk Backup
Data protection, backup and recovery have been based on tape for the last twenty-five years, for one main reason - cost (per MB, GB, TB). With the advent of inexpensive ATA (Advanced Technology Attachment) and Serial ATA disk, times are changing. While perhaps not quite as reliable, SATA is good enough and inexpensive enough to have started a revolution and created a paradigm shift. Welcome to the reality of disk-based data protection, with dramatic improvements in speed and reliability.
According to an Enterprise Storage Group study in March 2005,
• 18% of respondents already replaced their tape libraries with disk-based alternatives,
• 58% would consider replacing tape libraries with disk,
• 80% of respondents stated they would begin to replace some of their existing tape infrastructure with disk within 24 months,
• 40% say they would replace some of their tape within 12 months.
In a Purchasing Intentions Survey done in March by Storage Magazine, 54% of the respondents were increasing their D2D spending. For the first time, remote replication spending surpassed offsite tape spending as the primary focus for Disaster Recovery.
Clearly, the move to disk-based protection is well under way. Tape Backup Issues
A variety of problems with tape backup fuels the shift to disk backup. Much of the savings included in our analysis of Total Cost of Ownership (TCO) and Return on Investment (ROI) come from solving these problems.
The most disconcerting issue with tape backup is you never know if a backup tape is good until you really need it.
Operational errors run a close second, including operator (human) errors (storing the wrong tape) and procedural errors (backing up wrong or empty files). Any time there is human intervention, opportunity for error increases dramatically.
Analysts generally estimate IT management costs at five to seven times the cost of capital expenditure. Any TCO analysis must consider operation and
administrative costs (including media management and tape swapping) in addition to acquisition costs. Tape media costs (which come from the expense versus capital budget) must be included as well.
In addition to normal data growth, regulatory compliance (Sarbanes/Oxley (SOX), SEC 17a, HIPAA, Patriot Act, Freedom of Information Act, etc.) contributes exponentially to data growth. As more records are generated, more regulations are created in more industries and retention periods expand from years to decades. Including compliance and other factors, analysts predict data growth ranges between 50% and 100% growth per year.
Growth eventually forces users to decide whether to spend money to:
1. upgrade tape backup equipment (additional libraries, more or faster tape drives, new tape formats) or,
2. invest in alternatives.
For example, in Case Study #1 a user backs up 7 TBs, His backups take all night, every night and all weekend. He initially planned to upgrade their tape library to meet the backup window limitations. The cost associated with that caused him to do a financial analysis of tape versus disk backup.
In Case Study #2 a user with 5,000 tapes considered converting to AIT format to gain twice the density and speed. Again, the increase in spending prompted a hard look at their options.
A final consideration of tape limitations concerns Disaster Recovery (DR), which continues to be a top IT priority. Recovery Time Objectives (RTO) -- the amount of time it takes to recover – is a significant driver in evaluating
alternatives to tape.
A New Paradigm for Local and Offsite Backup
Initially, the cost of ATA disk alone leveled the playing field between disk and tape. For a simple cost comparison, from W. Curtis Preston:
• a midrange tape library costs roughly $4 to $11 per gigabyte (GB)
• disk prices are hovering around $3 to $11 per GB.
This puts disk and tape about even (excluding reliability and recovery time factors), establishing the financial viability of disk-to-disk (D2D) backup. Capacity Optimization
The most significant change in a disk vs. tape cost comparison comes from a new technology called Capacity Optimization (CO). Also called data reduction, disk de-duplication, or commonality factoring, CO massively reduces data to its smallest possible size, in bytes stored or transferred over the network.
CO uses redundant pattern recognition at a granular level. It goes far beyond traditional compression techniques which generally yield compression ratios of 2:1. CO technologies show data reduction ratios of 20:1 and more in real
customer environments.
CO works somewhat like traditional compression techniques. However it goes one large step further. Traditional compression techniques identify repeating characters or simple patterns, and represent them using that character or pattern and the number of repetitions.
With CO, a data object such as a file or a network transmission is analyzed and broken down into pieces, or “chunks”. CO identifies any unique chunks. It stores each chunk only once, along with instructions for where to re-assemble those chunks into data. Any repeated chunks (e.g. a graphic, a commonly used paragraph, a section of source code, etc.) will reference the original chunk along with re-assembly instructions. Thus, duplicate files require nothing but instructions.
This increase can be seen in Figure 1, showing the cumulative effects of CO on a user’s disk storage unit over an eight-week period.
Figure 1 - Cumulative Effects of Capacity Optimization
Over the 2-month period shown, data backed up grew from roughly 7.5 TB to 19 TB. The amount of physical storage required for CO based backup started at 800 GB and grew to only 1.1 TB. The compression factor over this time ranged from 12:1 to 20:1. Clearly, CO dramatically changes the cost formula of disk backup.
Replication over the Network
With this 20:1 data reduction potential of CO, D2D provides an excellent option for local backup. In addition, Disaster Recovery and regulatory compliance requirements for offsite backup (often with very specific geographic distance requirements) also can be addressed with Capacity Optimization.
CO technology for Disk-to-Disk (D2D) storage and replication, with the resulting data reduction factor of 20:1, coupled with the lower cost of SATA disk have created an entirely new paradigm for disk based backup and remote replication.
Data Domain: An Innovative Leader
One vendor that has led the way in combining ATA technology, CO (for storage and replication), and ease of non-disruptive implementation is Data Domain. As a result of their innovative approach, Data Domain has one patent granted by the U.S. Patent office (entitled “Efficient Data Storage System”) for minimizing the use of RAM, disk I/O and processor cycles to identify unique data segments and store them efficiently.
Data Domain holds a unique position in the marketplace, as the only vendor achieving data reduction ratios in the 20:1 range using off-the-shelf backup software. Data Domain’s family of products can be used as an onsite
retention/local backup/ restore device and, via replication, as an offsite Disaster Recovery solution, both utilizing CO (See Figure 2).
Figure 2 - Data Domain for Onsite and Offsite Disk Backup
Data Domain’s newest product line, the DD400 Enterprise Series, offers from 15 to 200+ TB of useable storage, while also offering high throughput up to 290 GB/hour (comparable to LT03).
CommVault Galaxy, EMC/Legato Networker, IBM Tivoli Storage Manager, and VERITAS NetBackup and Backup Exec.
The Data Domain Replicator option adds the offsite Disaster Recovery solution with the benefits of CO, reducing both the cost of storage and the network bandwidth requirements.
With the 20:1 data reduction ratios possible with CO, the DD400 Series brings the cost per Gigabyte down to under $1 per GB. (See Table 1 - *Source: Data Domain)
Building the Business Case
Many users are moving to D2D for the obvious benefits, without conducting a full financial analysis. However, for the many IT organizations that use TCO, ROI, Payback, or other financial analysis measures, building a business case for D2D may be required. In some companies, project funding approval is based on comparative TCO numbers, or may require ROI to be above a certain
percentage, or the payback period to be within some time period (e.g. < 1 year). Financial Analysis Measures
The most common financial analysis measures used in IT include TCO, ROI, Payback, Direct, Indirect and Net Savings.
• TCO (Total Cost of Ownership) is the cumulative, fully loaded cost of a project over time (typically 3 years for IT), and incorporates financial changes over that period such as those based on data and storage growth. TCO categories in this paper are Hardware, Software, Support, Supplies and Services.
• Direct Savings are any direct cost reduction where cash outflow is reduced.
• Indirect Savings are savings in user or IT staff time are considered.
• Net Savings is total savings minus total costs.
• ROI is total savings minus total costs divided by total costs, expressed as a percentage. (For more detailed definitions, see Appendix A.) Effects of D2D on TCO
A key part of the financial analysis presented here is based on the effects of D2D on individual TCO Components. Appendix B shows the components within each TCO category, the effect of D2D on that component, and how the costs and savings are calculated.
Case Study 1: Goal = Less Tape
Case study #1 is based on the actual experience of a company who wanted to start the move from tape to disk, but was not ready to give up tape altogether. With 5,000 tapes, backing up 120 TB on 800 servers, the IT manager was under pressure to cut tape media costs which came out of operating expenses, as opposed to capital expenses. With the labor-intensive processes associated with their nightly tape backup, he also felt they were spending too much time and effort on tape management. Upgrading their tape drives (in density and speed) would help address the media costs, but starting the move from tape to D2D addressed both issues. (For more detail on the financial numbers in the case studies, refer to Appendix A).
Table 2 - Savings and % Improvements of Less Tape Used
Figure 3 shows the relationship between costs and savings, by year and cumulatively, as well as the total Net Savings. As the chart shows, the largest chunk of savings comes from Supplies and Services, meeting the user’s objective of reducing the operational costs of tape.
Figure 3 - D2D Costs versus Savings
Figure 4 gives detailed financial numbers for costs and savings. The Financial Summary also goes on to show a payback period of 5 months, and an ROI of 523%.
Figure 4 -- Financial Summary –Less Tape
Finally, Figure 5 shows the TCO as calculated per TB, over three years, for D2D while continuing to use tape for archival, versus the TCO per TB for Tape only. It also shows the cost per TB decreasing over the three years, while the amount of storage increases (see secondary y-axis for TBs of storage).
Figure 5 - TCO Per TB
Case Study 2: Goal = Faster Backup/Restore
In case study 2, a large user, backing up 3-7 TB of critical exchange data, implemented Data Domain with two objectives. First, they wanted to achieve faster restore times (they experience an average of 1-2 restores per week, with the majority of their restores being data less than one month old). Secondly, they needed to reduce their backup times before they exceeded their backup window. Not ready to move completely off tape for archival or long-term recovery, they wanted to continue with their existing tape backup process. Their focus was not to save money on tapes, but to improve operations.
Figure 6 - Financial Summary - Faster Backup/Restore
With their backup window being one of the main drivers for considering the move to D2D, it is not surprising that there was a significant savings from hardware cost avoidance immediately in year 1. By implementing D2D, their hardware savings alone in year 1 was $40,000. In addition, as shown in Figure 7, hardware savings represents the majority of the contribution to savings over the 3-year period (at 46%).
Case Study 3: Goal = Tapeless
For those who are ready to go completely tapeless, implementing D2D both locally and with replication provides a strong solution at an attractive price. This case study describes a company who has completely eliminated tape, using a local Data Domain appliance for nearline storage and a remote DD appliance offsite (using replication across the WAN) for Disaster Recovery. With this configuration, they maintain their full data backup online for 7 months. Interestingly, the biggest savings for them comes from reducing the labor and management overhead of tape backup and media management. Figure 8 shows the increasing percentage of savings coming from labor over the three-year period.
Conclusion
This paper has presented both the direct savings and intangible benefits possible from implementing D2D for part or your entire backup and recovery needs.
The potential for dramatic reductions in cost per Gigabyte (down to $1/GB) shown here with Capacity Optimization, changes the entire cost formula for Data Protection TCO. With the kind of ROI achieved by Data Domain users in these case studies (176%-523%), along with the Total Savings ($180K to $1.4M) and the types of payback periods they experienced (4-5 months), it is clear that Data Domain offers proven cost savings and a strong, persuasive business case across a variety of scenarios.
Appendix A: Financial Analysis Terms 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 3 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 direct (e.g., hardware and software acquisition, salary costs of Full Time Employees
(FTEs)) and indirect (often difficult to quantify, e.g., cost of waiting for a file to be restored) cost components. The TCO categories used in the paper are
Hardware, Software, Support, Supplies and Services. Salaries generally are based on a 30% burden rate, to cover insurance, benefits, etc.
ROI (Return on Investment)
ROI is a measure of the financial return on an investment over a specified period of years (typically 3 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.
Payback
Payback period is the amount of time it takes for a project to pay for itself or break even, such that the cash flow becomes cash positive for all aspects of the project.
Total Savings
Total Savings is the amount of both direct and indirect dollar benefit 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.
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 & 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. The user profiled in Case Study #1: Less Tape saved almost $1,000,000 in supplies and services alone, over 3 years.
• 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. For users already up against the window, this can be the largest percentage of savings. The user in Case Study #2: Faster Backup/Restore was backing up three TBs nightly, and seven TBs weekly and needed to upgrade their tape library to upgrade/add more drives because their backups were taking all night every night, and all weekend. This caused them to do a financial analysis of tape versus disk backup. Going to D2D saved them $80,000 in hardware in the first year, and hardware cost avoidance represents 46% of their total savings over three years.
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
Labor cost avoidance is time saved by backup administrators, systems
