It is no surprise that backup related expenditures represent a major cost center for most data center environments. As data grows, so grows the need to increase the hardware and software resources for protecting this information. Denser disk and tape hardware architectures combined with technologies like compression and data deduplication have helped bring some reductions to the costs of backup hardware, however, there hasn’t been any corresponding “relief” in terms of how backup software is licensed or consumed.
Surging data growth coupled with flat or declining IT budgets has placed a major burden on IT planners. Indeed, various industry sources cite that data is doubling every two years while 70% of IT budgets merely go to maintaining what’s already on the data center floor. The convergence of these two trends is making it far less sustainable for data center managers to forge ahead on new business initiatives while keeping pace with the deluge of information inundating their environments.
Most enterprise backup software contracts are based on a capacity license. The problem is that if an organization is currently backing up 100 TB’s of information today, in three years time they can expect to be re-negotiating a contract to backup 2-3 times that amount (200-300 TB’s). Even after significant discounting concessions, the total cost of ownership (TCO) will continue to rise in a straight line with each subsequent license renewal transaction.
The fundamental issue is that businesses continue to pay more to backup their data, when the real value lies in the recovery of that information. Recent industry surveys have revealed that most organizations recover on average, only about 10% of their backed up business data on a monthly basis. This means there is a 90% divergence between the “insurance premium” to backup the data and the corresponding recovery “benefit”. What’s more, this premium will only increase over time since data growth is now a foregone conclusion.
Consumption Based Pricing
In recent years, other industries have rolled out new licensing and pricing models based on a more granular, “pay per use” basis to more closely align consumer value with their respective offerings. For example, the record industry moved from selling music on a per album basis to a per song basis (think iTunes). Likewise, the telecommunications industry changed from billing voice service on a per minute basis to a per second basis. Even auto insurers migrated their plans from monthly premiums to “pay as you drive” insurance models. While many industry executives fretted about the possible loss of revenues, what they actually witnessed was a huge increase in sales.
The whole premise behind these changes is greater consumer choice based on a more equitable pricing model which is tied to the real consumption of services and/or products. An ideal backup software licensing model, like the one offered by Asigra, would consist of tying backup software costs directly to the percentage rate of recoveries performed over an annualized period. In short, the fewer the recoveries performed, the less the cost of the backup software.
Predictable Expense Run Rate
Furthermore, for those environments that may incur a higher percentage of recovery operations, the solution should also place clear caps on the highest total amount that could potentially be levied on an annualized basis, but still be on average 20-30% less than current market offerings that are based on backup capacity. This would bring greater predictability to ongoing licensing costs as organizations would be able to pre-determine in advance, a ceiling or “not to exceed” limit on their software license run rate. By implementing such a model, backup licensing costs would be more fairly aligned with the actual use of the product – based on recovery, rather than backup.
In order to measure the efficiency and effectiveness of the backup infrastructure, a tracking tool would need to be employed which measures the percentage of backup recoveries conducted, the volume of data and the data types recovered. In addition to metering the use of recovery, this tool would serve several other important purposes.
First, it would allow organizations to draw a straight line from running an efficient IT shop to achieving measurable cost savings. Under current backup licensing models, there is no incentive to be efficient from a backup perspective–a flat fee is imposed regardless of how many or how few recoveries are performed. In some respects, more efficient IT organizations are subsidizing less efficient data centers since both are charged the same, regardless of efficiency.
Under a recovery based model, however, efficient IT shops would be able to produce an empirical report which outlines the decreasing frequency in operational recoveries being performed and the corresponding savings achieved because of their efficiency. This would enable IT administrators and managers to demonstrate their value-add to the business by providing proof of enhanced quality of service and lower operational expenditures.
Data Recovery Transparency
Additionally, with this information IT managers could be fully transparent about IT related costs. All users could see in black and white what they have consumed over a given month, quarter or year and the heaviest users of the recovery infrastructure would proportionately and equitably shoulder a larger burden of the expense.
Lastly, a tool that provided analytics about where an organization stack ranks against peers in their industry from a recovery perspective, would enable IT planners to obtain a baseline assessment of their overall proficiency and determine what improvements could be made to attain a higher overall rank.
In fact, the analytics from this tool could be used by managed service providers (MSPs) and value added resellers (VARs) to help their customers make improvements to their application environment which could reduce the frequency of recovery operations. It is possible that as IT organizations improved systemic issues in their production environment, fewer recovery operations would need to be performed, resulting in better application quality of service and a corresponding savings in licensing costs over time.
There is an old cliché in IT circles – people don’t care about backup, they care about recovery. Legacy backup software licensing schemes based on the total capacity of data backed up are placing an undue burden on data center environments trying to contend with the continuous onslaught of data growth. With data increasing dramatically on an annual basis, most organizations are going to see their backup licensing costs rise, but will not necessarily derive any corresponding benefit with an increased investment in backup oriented software.
Backup software products like Asigra’s, on the other hand, are more forward thinking as it directly ties the investment in data protection to recovery operations rather than the total amount of data backed up. Under this model, organizations only pay based on the frequency of recovery and what’s more, through automated tracking technology, insights may be gleaned to help organizations reduce the rate at which recovery operations are performed – resulting in still lower costs.
Furthermore, with increased transparency into data recovery costs, IT can fairly charge back recovery costs to the heaviest users. This in turn may help drive improved efficiencies as users will see a direct expense associated with using the recovery service rather than perceive it as an all you can eat buffet.
Asigra is a client of Storage Switzerland