Cost per TB

Here is a sampling of a very simple metric cost per raw TB:


There are many factors that influence storage costs. Some of the differences are based on:

• Performance: random IOPS and sequential performance
• RAS: Reliability, Availability, Serviceability
• Protocols supported
• Ease of management
• Proven track record of storage
• Features
• Intelligent caching (DRAM, SLC flash, eMLC flash)
• Snapshots
• Volume replication
• Migration of volumes between raid groups, tiers and storage arrays
• Deduplication
• Remote replication
• Auto tiering of storage
• Online Compression to save storage
• Advanced diagnostics and alerting
• Hardware support
• Software support
• Support for operating systems, drivers
• Support for Hypervisors
• Backup Integration

Yet the real issue is that big storage vendors charge as much as the market will bear. A hard drive mounted on a fancy set of rails and topped with a shiny corporate logo is still just a physical disk, even if they do charge a jaw-dropping markup. 

Prices from Newegg:









Prices from Dell for MD3660F:

Prices from Netapp public pricelist:
http://www.netapp.com/us/media/nys-ogs-pricelist022013.pdf

That is how they achieve high profit margin:

	Revenue (Billion)	Gross Profit (Billion)	Gross Profit Margin (%)
IBM http://goo.gl/DVjJn	103.2	50.3	48.7%
HP http://goo.gl/y6OBj	118.68	27.97	23.6%
Cisco http://goo.gl/FhjYv	47.25	28.21	59.7%
Dell http://goo.gl/ARBIU	56.94	12.19	21.4%
EMC http://goo.gl/6Selz	22.01	13.64	62.0%
VMware http://goo.gl/EkBWd	4.74	3.88	81.9%
NetApp http://goo.gl/1n5Qa	6.32	3.71	58.7%
Oracle http://goo.gl/zZbYc	37.15	29.26	78.8%

To me the real battle is cloud. Traditional enterprise IT shops continue to use expensive IT infrastructure and cloud is based on low cost commodity infrastructure, the cost difference between cloud and enterprise IT is huge and unless enterprise IT shops are willing to also offer solutions based on low cost commodity infrastructure they will never be able to compete with cloud....as cloud will offer:

• lower costs
• more agile, faster deployment
• scalable
• ready to deploy applications from marketplace
• you only pay for what you use
• fewer staff required to manage

As more and more organisations are asked to consider cloud or even choose a "cloud first" policy this will spell trouble for vendors with big, fat margins....the mantra is compete or diminish


Update 12/2/15: Does cloud impact traditional vendors profit margin?
One question that I have been asking is whether low cost cloud will force the traditional enterprise storage companies to compete on price. Sadly I have not seen this yet. To test this I checked price of Cloud Storage Appliances, Netapp have the SteelStor SS3030:
http://www.netapp.com/us/products/protection-software/steelstore/


From publicly available Netapp pricelist dated 15/1/15: 
http://www.peppm.org/Products/netapp/price.pdf

HDD-008 Disk Drive,SS3030/SS2030 2TB 3.5" Disk Drive,SS3030/SS2030 2TB 3.5" 2,508.31 $ EA NetApp Inc HDD-008
HDD-009 Disk Drive,SS3030/SS2030 4TB 3.5" Disk Drive,SS3030/SS2030 4TB 3.5" 4,518.31 $ EA NetApp Inc HDD-009
PWS-005 Power Supply,SS3030/SS2030 850W Power Supply,SS3030/SS2030 850W System 498.31 $ EA NetApp Inc PWS-005
PWS-006 Power Supply,SS3030/SS2030 580W Power Supply,SS3030/SS2030 580W Shelf 833.31 $ EA NetApp Inc PWS-006
SS3030-10GE-32TB-B-LR-R6 SS3030 10GbE 32TB BASE LR SFP SS3030 10GbE 32TB BASE LR SFP System 96,722.88 $ EA NetApp Inc SS3030-10GE-32TB-B-LR-R6
SS3030-10GE-32TB-B-SR-R6 SS3030 10GbE 32TB BASE SR SFP SS3030 10GbE 32TB BASE SR SFP System 95,885.38 $ EA NetApp Inc SS3030-10GE-32TB-B-SR-R6
SS3030-10GE-32TB-E-LR-R6 SS3030 10GbE 32TB EXP LR SFP SS3030 10GbE 32TB EXP LR SFP System 108,443.69 $ EA NetApp Inc SS3030-10GE-32TB-E-LR-R6
SS3030-10GE-32TB-E-SR-R6 SS3030 10GbE 32TB EXP SR SFP SS3030 10GbE 32TB EXP SR SFP System 107,606.19 $ EA NetApp Inc SS3030-10GE-32TB-E-SR-R6
SS3030-1GE-32TB-B-R6 SS3030 1GbE 32TB BASE System SS3030 1GbE 32TB BASE System 86,254.13 $ EA NetApp Inc SS3030-1GE-32TB-B-R6
SS3030-1GE-32TB-E-R6 SS3030 1GbE 32TB EXP System SS3030 1GbE 32TB EXP System 97,974.94 $ EA NetApp Inc SS3030-1GE-32TB-E-R6
SVC-MNT-GLD-WWA-3030 Support,SS3030 Gold Support,SS3030 Gold 1,033.10 $ MTH NetApp Inc SVC-MNT-GLD-WWA-3030
SVC-MNT-GLD-WWS-1002 Support,SS3030 Shelf Gold Support,SS3030 Shelf Gold 277.13 $ MTH NetApp Inc SVC-MNT-GLD-WWS-1002
SVC-MNT-GPL-WWA-3030 Support,SS3030 Gold Plus Support,SS3030 Gold Plus 1,345.83 $ MTH NetApp Inc SVC-MNT-GPL-WWA-3030
SVC-MNT-GPL-WWS-1002 Support,SS3030 Shelf Gold Plus Support,SS3030 Shelf Gold Plus 474.60 $ MTH NetApp Inc SVC-MNT-GPL-WWS-1002
SVC-MNT-PLT-WWA-3030 Support,SS3030 Platinum Support,SS3030 Platinum 1,631.44 $ MTH NetApp Inc SVC-MNT-PLT-WWA-3030
SVC-MNT-PLT-WWS-1002 Support,SS3030 Shelf Platinum Support,SS3030 Shelf Platinum 633.08 $ MTH NetApp Inc SVC-MNT-PLT-WWS-1002
X-WWS-1002-B100-32TB-R6 DSK SHLF,SS3030 32TB Expansion DSK SHLF,SS3030 32TB Expansion 46,895.81 $ EA NetApp Inc X-WWS-1002-B100-32TB-R6

Same hardware using a commodity server with 96GB memory and 32TB is - Dell R720XD:


Sure the SteelStor software is great, but still amazing profit margin. Furthermore with Cloud Storage Appliance there is additional cost:

• Network costs
• Cloud vendor network costs
• Cloud vendor storage costs
• Proxy servers costs (if applicable)