The storage market has some interesting idiosyncrasies. The first one that comes to my mind is the purchasing model. Disk capacities are doubling every 18 months and the cost per gigabyte is falling by 40-50% per year; yet many IT organizations are still barely making ends meet with their current storage budgets. Throw in a down economy, and I think it’s safe to say we’re all in for a world of hurt. 

The point is that something’s fishy. I challenge you to name one other market where, year-over-year, products improve by 75%, prices fall 50%, and it’s still not good enough. Can you imagine what would happen if next year the Chevy Suburban got 40 MPG and could be had, loaded, for less than $25,000? I’ll tell you one thing….they wouldn’t need a bail out. So what gives? Why is storage so different? 

The answer is the “storage tax”. Think about it – what happens when you buy a terabyte of net-new disk? First, you’ll pay a seemingly attractive (and probably well-negotiated) acquisition cost…kudos. Next you’ll need to buy that same system again - with a software premium - for offsite replication. Then, you’ll need to expand the capacity of your VTL and/or tape systems to accommodate another terabyte of backup. After that, you’ll need to pony up for the additional personnel to manage all those terabytes; and, finally, you’ll need to pay to replace everything when it wears out in three to five years. All of these are taxes that you agree to pay the day you  install more disk.

This has been the traditional storage vendor’s best-kept secret. It’s classic misdirection. By getting you to focus on the acquisition cost, they figure you’ll forget all about the hits you take on the backend in the form of storage taxes. You’ll pay 5x the figure listed on your quote…and you’ll actually be happy about it!

Don’t get me wrong, disk definitely has its place in the storage infrastructure. But is that place ‘everywhere’? Are all of your data sets worthy of the premium you’ll pay to store them on disk?

PowerFile offers a compelling alternative. Think of us as the TurboTax® of storage, helping you identify, claim, and reap the rewards of your “tax deductions”.

There will be more to come on how PowerFile eliminates storage taxes; but for now, think about this: What data sets do you have that don’t require disk storage? Where can you skirt the storage tax and duck the Storage Revenue Service? 

Call us or post a comment. We’d love to hear your thoughts.

This entry was posted on Tuesday, November 18th, 2008 at 4:28 pm and is filed under Storage Tax. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.