For the first installment of the Lean IT index—a quarterly review of what Apptio customers are doing, how they are reducing cost in IT and how they are driving towards a more Lean operation—I’m focusing on the most popular area for Apptio customers today: Storage.

This does not imply that our customers are not looking at other cost reduction opportunities such as server virtualization, application rationalization, vendor contracts, licensing agreements, etc. as well. Indeed they are. It does indicate that in the past few months, more Apptio customers have been using the solution to do deep analysis of storage costs as a way to understand their cost of storage and identify ways to trim. Why storage, now? Making a couple of educated guesses, I would say that either (1) storage represents the next opportunity for significant savings in IT, but the cost drivers are a little more complex than in other areas or at least a little less understood and thus require the power of Apptio to analyze, or (2) storage has slipped under the radar while more attention was paid to other areas in IT (server infrastructure, networking, software, labor) or other cost reduction initiatives and now storage has percolated to the top of the list as IT managers scratch the earth looking for the next way to reduce cost without laying off critical staff.

Now then, let’s look at the numbers. Today, 38% of Apptio customers are looking at storage for ways to reduce IT costs. Of those:

  • Nearly 80% are analyzing tiered storage optimization; moving data to lower cost storage or backup
  • 43% are analyzing alternative low cost archive or backup options, including cloud storage
  • 15% are analyzing the cost benefit of data deduplication

Based on our findings, moving data from Tier 1 to Tier 2 storage offered a 15% to 24% savings and from Tier 2 to Tier 3 storage (often tape backup) a 11% to 22% savings. Obviously, results vary based on which storage systems they are using, how well they’ve been managing costs to date and what they consider Tier 1, 2 & 3. The great thing is that this initiative is almost a freebie; you can move data to lower cost storage architecture without any grand initiative or investment. Clearly, it will take a little planning on what data to move, and it may require more storage, but usually people are investigating this when they are pending capacity expansion in higher storage tiers anyway. So buying cheaper storage is a real savings.

Cloud storage, as a backup, archive or “rarely used” storage tier, offered huge cost savings. Compared to storage that was being used today for the same class of data, savings of 50% to 74% could be achieved by moving to cloud storage. Recognizing that there are a lot of other factors that go into the decision of moving data to the cloud—including network costs, retention policy, security and compliance—this is not a decision to be made quickly or in isolation. But as more cloud providers come online with good solutions to the non-cost concerns, this option represents a very real potential for significant savings.

With all the press on deduplication, it is no surprise that the savings potential is significant. Those customers analyzing the ROI on deduplication found a savings opportunity of 30% to 75% depending on application, type of data targeted, type of storage considered and capacity growth rates.

The level of savings in storage optimization is impressive. But it clearly takes more than just a simple analysis to ensure you are getting the highest return on your investment (time) including many variables. Done properly, it is a critical element in creating a lower cost structure that will pay dividends every year and enable IT to run Lean.