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Data Storage The Internet Businesses

Internal Costs Per Gigabyte — What Do You Pay? 420

Posted by timothy
from the wonder-what-the-dept-of-education-pays dept.
CodePwned writes "I recently took over a position at a rather large company where I discovered my group was paying $30 per gigabyte per month! That's $360 per year per gigabyte to our own IT department. While I understand costs are different depending on the scale, redundancy, backup and support methods, there doesn't seem to be any good papers on what range you should expect your costs to be. So far, my research shows an average of $1 per gigabyte or less for internally hosted space. What do you pay?"
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Internal Costs Per Gigabyte — What Do You Pay?

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  • Eh? (Score:4, Insightful)

    by ledow (319597) on Thursday July 29, 2010 @03:32PM (#33075488) Homepage

    Bandwidth? Storage? Backup? Downloads from a particular site? What the hell are we talking about here?

    • by sugarmotor (621907) on Thursday July 29, 2010 @03:35PM (#33075542) Homepage

      I thought it was RAM

    • by njfuzzy (734116)
      I agree. This question got through without enough information to be answerable. My guess is this either refers to storage or bandwidth.
      • Re:Eh? (Score:5, Informative)

        by Surt (22457) on Thursday July 29, 2010 @04:06PM (#33076104) Homepage Journal

        He's at a large company, where one department (IT) actually charges other departments (sales, development) for services. He wants to know what he should expect to be charged by IT per GB of storage. He thinks the IT department at his company is overpricing to provide for Aeron chairs.

    • Re:Eh? (Score:4, Informative)

      by porkThreeWays (895269) on Thursday July 29, 2010 @03:44PM (#33075710)
      I don't think it's as vague as everyone is making it to be. Since his department is paying the IT department it most likely means data on a windows network through CIFS that is backed up and redundant. This is a common thing.
      • Re:Eh? (Score:5, Insightful)

        by causality (777677) on Thursday July 29, 2010 @04:06PM (#33076106)

        I don't think it's as vague as everyone is making it to be. Since his department is paying the IT department it most likely means data on a windows network through CIFS that is backed up and redundant. This is a common thing.

        If you are having to speculate based on what is likely and common, then it fits the very definition of "vague".

        • by epine (68316)

          If you are having to speculate based on what is likely and common, then it fits the very definition of "vague".

          Another great way to muddy the waters is to misconstrue the question. You don't have to speculate. There's a difference between a vague question and casting a wide net. The transaction value of a single post is maximized in providing a specific answer to a specific question, whereas the transactional value of a discussion forum is maximized by having many situations and specifics put forward, in

        • Re: (Score:3, Informative)

          by Java Pimp (98454)

          I think it's hardly vague given his post contained terms like redundancy, backup and internally hosted space. Not sure but I think "internally hosted space" was the givaway...

  • IT all depends (Score:5, Insightful)

    by camperdave (969942) on Thursday July 29, 2010 @03:34PM (#33075520) Journal
    I suppose it all depends on what, and how, you're measuring. Is that money spent on backup tapes, raid systems, flash drives, or what? Is that for offline storage, frame-relay throughput, ISP bandwidth. Does IP telephony get rolled up in that? The question seems a little vague to me.
    • Exactly. Are we talking about my $500 WD 1TB NAS (2 x 1TB RAID1) or my half-million dollar multi-site WAN replicated EMC storage solution?
  • Performance, reliability, and price, pick any two.

    High performance and reliable storage tends to be expensive.
    High performance and cheap tends to require a lot of maintenance.
    Reliable and cheap tends to be really really slow.

    So if they are on a SAN with that one gig spread across 50 drives, there are some applications that need that speed.
    • by Guspaz (556486) on Thursday July 29, 2010 @04:08PM (#33076124)

      At those costs, one terabyte of data stored for three years would cost roughly $1.1 million. I find it hard to believe that you could legitimately build a SAN that stored 1 TB for that amount of money and not have hit some sort of performance wall that made the expense superfluous. I mean, at some point, you're maxing out multiple 10GigE fibre channels from your SAN and thinking "How can I spend the rest of this money?"

      • Re: (Score:2, Informative)

        by flink (18449)

        Well, you can start with probably $400k to pay salary and benefits to the guy who maintains it for 3 years, plus equipments costs, plus backup solution, network, physical premisis, insurance, power, HVAC, UPS. Plus you want high availability, then double pretty much everything.

  • $3/Gb/Month (Score:2, Informative)

    by Anonymous Coward

    $3/Gb/Month

  • by g0bshiTe (596213)
    I might be mistaken but if I'm getting you correctly "internally hosted space", about $100 for a TB drive that translates to about $0.09 per gb. If it's internal why would you have to pay per year for that?
    • Re:WTF? (Score:5, Funny)

      by Sponge Bath (413667) on Thursday July 29, 2010 @03:42PM (#33075672)

      If it's internal why would you have to pay per year for that?

      The 30lb bags of Purina IT Chow are a recurring cost.

      • Re: (Score:2, Funny)

        by Anonymous Coward
        Hey, this fine back-hair pelt won't keep a healthy sheen on its own, you know!
    • Re:WTF? (Score:4, Informative)

      by XanC (644172) on Thursday July 29, 2010 @03:42PM (#33075674)

      "Internal" in the question refers (very obtusely) to the cost within a company. In other words, $X per gigabyte is taken from his department's budget in order to "pay" for their IT use.

    • Re: (Score:3, Interesting)

      by KevMar (471257)

      We fight with this type of stuff all the time. The market price for things and the amount IT "charges" for the same thing can be way out of line. What I usually see is some large infrastructure investment by IT gets broken up and tacked onto other services charged to the departments that depend on them. Your TB drive may cost $100 but it may be in a high end raid on a server with some fault tolerance attached to a UPS ran by a full team of support. The company can either cover the cost of IT or hand it

  • Costs for what? (Score:5, Informative)

    by georgewilliamherbert (211790) on Thursday July 29, 2010 @03:36PM (#33075560)

    For backed up to tape storage? Storage replicated to another, remote datacenter? Snapshotted at regular intervals?

    SAN storage? NAS? Direct attach? On arrays with 10 drives, 100 drives, or 1000 drives?

    Fast SAS or FC drives? SATA arrays? 5400 RPM? 7200? 10k? 15k?

    If you're paying $360/GB/yr for low end storage that sucks. For very high end, with replication and snapshots and the fastest drives and so forth, that's pretty high, but not an order of magnitude high.

    • by RingDev (879105)

      Not to mention you are also paying the salary for a full time employee+on call. Figure with taxes and benies, and depending on your local cost of living, a decent network tech can run a company $100k/year. And if you're running a smaller SAN with say 10 terabytes of storage that's $10/GB right there.

      -Rick

      • by MoonBuggy (611105)

        That's still only about $0.80/GB/month though. Obviously there are then infrastructure costs and the like, but I find it very difficult to see where the majority of that remaining $29.20/month is going to - especially since it's within the company, so no profit margin to consider.

    • by Derkec (463377)

      It's possible that if the poster is finding the cost outrageous, it's because his teams needs don't align super "super fast, super reliable, super awesome" storage. Perhaps he needs to beg IT to also offer a slower, cheaper option. Or perhaps they do and he's whiner .

  • by HockeyPuck (141947) on Thursday July 29, 2010 @03:37PM (#33075590)

    "Depends" is your answer. Though I'm assuming you're talking about disk, not tape nor VTL. Do you buy direct from the manufacturer or through a channel? How big is your company? What's the total installed base so far? General Electric pays much less per GB than some midsize company with 100TB.

    Do you mean for SATA disk in a tier2 array or SSD in a tier1 array?

    Costs go up when you include snapshots and replication.

    Do the editors even ask the submitter to be more specific?

  • $40 (Score:4, Interesting)

    by spike2131 (468840) on Thursday July 29, 2010 @03:38PM (#33075600) Homepage

    We pay a one time $40 per gigabyte as the capital cost of acquiring the storage. There is no monthly cost. I think $40 is still way too much.

  • I don't pay (Score:4, Insightful)

    by El_Muerte_TDS (592157) <elmuerte.drunksnipers@com> on Thursday July 29, 2010 @03:39PM (#33075622) Homepage

    My boss does.

    • Re: (Score:3, Insightful)

      by Joce640k (829181)

      The only 'insightful' comment so far, and me without mod points - your department pays whatever your boss has agreed to pay. Why should it even worry you...? $30 a month is background noise compared to the cost of running a 'department'.

      (PS: The OP didn't even say what he's paying for so I don't see what other people are commenting on...)

      • Re: (Score:3, Interesting)

        by pnutjam (523990)
        Somebody posted a great analogy in a different thread the other day, to paraphrase:

        Two kids are fighting over a pie, on says we should each get half and the other says I want it all. Mother intervenes, and after discussing it with the children, the one who wanted half get a quarter of the pie and the child who demanded it all, gets 3/4 of the pie.

        That's how most companies handle accounting.
        Because the are run by salespeople... (my addition)
  • One idea... (Score:4, Interesting)

    by lexcyber (133454) on Thursday July 29, 2010 @03:40PM (#33075636) Homepage

    Stop beeing retards and do internal invoicing. Not like the board of directors is billing "per decision". IT department as a billing self ruling department is so damn stupid. And no one seem to understand it. It is like having a fire department only going to fires that is in line with their mission statement.

    And having an it department invocing per GB instead of having a budget for storage and then the company can allocate it as they please. And if someone has a bigger need, it should be a question for the company. Not a matter of giving a profitable it department.

    • Re:One idea... (Score:4, Interesting)

      by zero_out (1705074) on Thursday July 29, 2010 @03:57PM (#33075944)
      As I understand, this stems from the idea of outsourcing IT. IT outsourcing companies love this, because they can easily compare apples to apples. "Your internal IT dept. charges $30/GB to host and support your files, but we can do all that for $25/GB!" However, many IT needs don't fit into that model very well. Which model you use really depends on your needs, the size of your company, and the department structure.
    • by Amouth (879122)

      only problem is if you don't do the internal billing from IT you end up with the situation we had before that..

      IT is a huge cost.. lets cut/slash/kill......

      you end up with companies who think they can slash IT in half and it woln't change any other parts of the company..

      if theses areas don't have some realization of the cost of what they are doing IT gets stuck with the cost - and an unjustifiable budget.. if marketing needs another 2k worth of storage they can justify it .. pay IT and we provide it.. el

  • It depends on what you get for that $30 per Gb/month. If the only thing you get for that is storage and support costs come out of a different pot, then you are paying too much. On the other hand if that $30 represents all of the IT budget for your company, then it might be about right (might not be as well, ther e are too many variables in that case).
  • Cost Drivers (Score:5, Informative)

    by MyLongNickName (822545) on Thursday July 29, 2010 @03:46PM (#33075758) Journal

    Hi,

    I am willing to bet that the "gigabyte" usage is simply a cost driver. Accounting simply needs to know how to divide up IT costs and settled on this as a cost driver, possibly one of many, to determine what it takes to support each department.

    This is neither new nor entirely bad. Sometimes it is better to go with an easy-to-implement, but only partially accurate number than one that is perfectly accurate but impossible to implement.

    • by jeffmeden (135043)

      Accounting simply needs to know how to divide up IT costs and settled on this as a cost driver, possibly one of many, to determine what it takes to support each department.

      Bingo. When they "split out" IT as a department, chances are they just said "Well so far we have been spending this much a year and providing exactly x in storage GB, y in support hours, z in application runtimes, etc. etc. etc. The number then gets tweaked based on inflation, changing requirements (more speed, more backups, more whatever per unit) but what it probably isn't changing based on is *competition* which is the only thing that will make it go down.

      If it's practical, pay an internet based file h

    • The trouble is if your cost system is out of whack then people with limited budgets will make descisions that are good for them under the current system but would be bad descisions if things were more accurately accounted for.

      In particular i'd think overcharging for storage would cause a lot of local badly backed up storage to pop up (at least that is what seems to happen at the uni I go to).

  • $1/gig is barely a mirrored pair array stuck in a PC. Probably not even 15krpm SAS.

    What exactly do you need?

    Lots of storage?
    Lots of I/O?
    Redundancy?
    Backups?
    Disaster Recovery?
    People to manage it?

    It all costs money. If you don't need any of that then by all means, buy a PC, stick a couple of 1.5Tb drives in it, raid 0 them and call it the department server. Of course, other people in your organisation may have mandated all of the above.

    • by jedidiah (1196)

      If you are talking about anything beyond a 2 man IT shop then all of these "non device" costs are going to be shared over a large number of customers. Backups, IO and redundancy isn't that expensive even for a small shop. The idea that it needs to be $30/G/Mo for a larger shop is absurd. If anything, this is just a reflection of how poorly companies themselves scale and how they tend to be crushed by their own weight and politics as they grow larger.

      Nevermind a "sticking a disk in a PC". You could probably

  • Do it yourself. Get almost a petabyte for $7867:

    http://blog.backblaze.com/2009/09/01/petabytes-on-a-budget-how-to-build-cheap-cloud-storage/ [backblaze.com]

    My answer:
    67 terabytes is 67000 Gigabytes.
    $7867 / 67000 = 11 cents per gigabyte.

    Your mileage may vary.
  • by neltana (795825) on Thursday July 29, 2010 @03:53PM (#33075876)

    What you may be seeing, especially if you are working for a very large company, could just be a cost allocation scheme, not a real money cost as you are thinking of it. If your department brings in revenue, the organization needs to match expenses to it for purposes of Management Accounting.

    For instance, imagine you know it costs $X to run one of your cost centers. That dollar amount includes everything from the manpower, the equipment, the facility...everything. Now, they need to assign these costs to the departments that actually make money in a way that makes sense. They could do this by carefully costing out each service they provide and assigning an overhead rate, blah blah. That tends to be a pain. You do it if you have to...but you try not to have to. Another, easier, way of doing it is determining a usage metric (CPU hours, GB of storage, number of tickets) and using that to determine each profit center's percentage allocation of the overall cost.

    So, the $60 per GB may not even be close to a market rate for storage. However, if all the departments used twice as much storage next year, the per GB cost might fall to $31 per GB (slightly more than half to account for the fact that there would obviously be more real costs). Conversely, if you convinced your management to contract externally for storage, everyone else might find their per GB cost rise, since the fixed costs would be static.

    • by PybusJ (30549) on Friday July 30, 2010 @03:19AM (#33080426)

      Your description sounds about right. But, by using storage as your proxy for all IT cost you are putting perverse incentives for people to use less storage than is right for their business need (or to avoid using central storage, where it can be managed and backed up, and put their stuff on their own external HDDs).

      I think a per person overhead charge, plus a storage charged at closer to cost is likely to work out better.

      Conversely, if you convinced your management to contract externally for storage, everyone else might find their per GB cost rise, since the fixed costs would be static.

      Right, so this is the exactly what a rational department manager should be doing.

      Incidentally, I started looking into running my own departmental IMAP server yesterday to avoid much smaller charges of about $30/Gb/year for email archiving from central computing services.

  • I recently took over a position at a rather large company where I discovered my group was paying $30 per gigabyte per month! That's $360 per year per gigabyte to our own IT department.

    It is incentive to keep your data free of porn, lolcats, pictures of the 2007 Christmas party, CD rips, etc. It also helps to pay for the Ferraris that the IT department drives.
  • Don't think of it as $360/GB per year, think of it as $360,000/TB per year.

  • It's possible the "internal" cost is simply some form of rudimentary metric to measure the relative usage that is made of the IT dept by each of the other depts (so each dept is charged accordingly).

    --Ivan

  • If this guy has started at a local govt entity or highly formalized private enterprise, I would suggest he squares himself up and forgets this sort of thing.

    I have seen this directly. For example the corporate staff (including CEO) gets their wages divided into cost center charges.

    Quick and dirty example: $3,000,000(corporate wages and expenses) / 500 cost centers = $6,000 per annum.

    Alternatively if he wishes to keep digging, he will find himself pushed to the outer, or worse, managed out of his posit
  • ...it's the people supporting the bits. At my company, storage is also insanely expensive compared to the personal consumer space, but that's because unlike the personal consumer space, our data centers have high reliability, and lots of personnel (along with their 401k plans, insurance, office space, and other expenses) who have to be paid to support the systems.
  • Like many others are saying on here - you need to give us a lot more information here. There is a huge difference in the cost per gig between a Netgear and a NetApp. You also didn't mention if your cost analysis includes your OpEx costs (Operational Expenses) - things like hard costs (labor) and soft costs (power, hvac, floorspace, etc).

    Tell us more and we'll be able to help you out better.

  • We charge people something like $30-40/GB one time cost for space on the NetApp 2020s. Reason is there's two redundant NetApps in two different buildings, one of which is also backed up to a tape library with tapes rotated out to a vault in yet another building. Also the NEtApps have space set aside to do hourly snapshots, in case you delete something. Costs just a little bit for that kind of performance and reliability. For our lesser storage system, which is basically just a supermicro case filled with 2T

  • Additional details (Score:2, Informative)

    by CodePwned (1630439)

    This is just storage space, not web pages/applications, or software etc. We're talking digital assets of the company such as documents, images, videos... etc. Basic, run of the mill file storage is being priced at $30 per gig, per month. It's basically just a giant network share. It doesn't need to be co-located just your typical raid array with some method of disaster recovery.

    I'm interested in what other companies charge internally for file storage.

    • by Cytotoxic (245301)

      See post from Sycraft-fu above for more details - he backs your $30/gig number.

      From your detail "run of the mill file storage" and "digital assets of the company" aren't entirely the same thing. Depending on the number of workers involved and the reliance on the data, even an hour of downtime could cost hundreds of thousands of dollars (in my ~400 employee company it is well into that range). Therefore a simple network share is not appropriate. Even a raid 6 file server with a tape backup is not appro

  • My Cost (Score:3, Informative)

    by Target Drone (546651) on Thursday July 29, 2010 @04:16PM (#33076226)

    At the universisty where I work. IT charges $3.00 per GB/year to store data on a NetApp SAN. It then costs you another $3.00 GB/year for backups.

    NOTE: In case you're wondering the two prices are charged separtely in case you have data that doesn't need to be backed up or have data that needs to be backed up but isn't stored on the SAN.

  • why this happens (Score:5, Informative)

    by Nadaka (224565) on Thursday July 29, 2010 @04:19PM (#33076268)

    The big reason for internal IT departments to charge other departments for services rendered is this:

    When it comes time for a manager to "earn" his bonus, the first thing he looks at is cutting the budget for less profitable departments.

    The IT department rarely has external clients for income, but is absolutely vital to keeping the business running.

    Therefore to keep some short sighted pencil pusher from crippling the company with a failing infrastructure, the IT department has to show a "profit" for the services it renders.

  • Our Cost (Score:5, Informative)

    by duplicate-nickname (87112) on Thursday July 29, 2010 @04:28PM (#33076398) Homepage

    Our data center provider offers storage on their FC SAN ( > 150mbps I/O) at a cost of $2.50/GB/month and an additional $2.50/GB for backups. This includes 24x7 support, 99.99% uptime, and is hosted in a tier 3+ data center. My guess is that smaller SANs cost more per GB, but you are getting boned at $30/GB.

    On the other hand, if you are requiring some sort of high performance DAS with off site replication, then I bet the cost is considerably higher.

  • $12/gb per year (Score:3, Informative)

    by FishNiX (601128) on Thursday July 29, 2010 @05:16PM (#33076986)
    We pay about $12/GB/year for storage on 15k FC disks with RAID-DP and replicated across town. This does not include backups to tape, that's an extra fee. We are also in the process of working out lower cost storage without replication and on SAS (or SATA) disk. It's really silly to compare consumer grade USB storage to enterprise, replicated and professionally supported storage but it happens all the time.

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