People often look first for business value on the front lines of IT, the e-commerce site that's tuned to turn browsers to buyers, or the interconnected supply network that helps get products to market more quickly. But while the spotlight often shines on those outward-facing systems, there's a lot of business and IT value to be found in back-end projects as well.
Consider the benefits that Cisco has pulled from a massive storage networking undertaking that has been in process since late 2000, when Cisco realized that the storage management within our direct-attached storage (DAS) architecture could not continue to scale in the face of massive and costly storage growth. Ultimately, Cisco IT faced the prospect of compromised scalability and performance and an increasing total cost of ownership (TCO) for all the business units within Cisco.
In addition, the DAS model, coupled with Cisco IT's separation of storage within business functions, created storage "islands" that in turn led to inefficient use of storage, generating an opportunity to improve corporate ROI.
The goal of reducing storage TCO—and increasing storage utilization—led Cisco, like many companies, to invest in a strategy aimed at offering storage as a utility, much as electricity is. As such, we've moved to a network-centric model based on SAN and NAS, building SANs for each business function—a challenging and complex process.
This is a multiyear, multiphase project that will end in the migration of each business function SAN to a single SAN at each of our five production data centers. And the payoff will yield pure business value on several levels, particularly as our data storage resources have continued to grow, reaching over 3.9 petabytes in early 2006. Cisco Systems experienced significant savings in terms of both cost reductions and cost avoidances with regard to storage consolidation between fiscal years 2003 and 2005, including the following:
- A maintenance cost reduction of over $4 million per year for three years.
- An expansion to existing data centers was deferred, due to space savings. The estimated cost for expansion was $27 million over three years.
- A calculated net present value of over $14 million, with an internal rate of return of over 70 percent.
- The total cost of ownership per megabyte of storage has been reduced from $0.12 annually in fiscal year 2002, to $0.035 in fiscal 2005.
In addition, network-based storage also yielded less tangible business benefits. Improved data availability means that people can get the information they need to get their jobs done faster; ditto with the improved network performance and speed. Meanwhile, this move improved storage utilization; system management and reliability; and provisioning speed, which helps the Cisco IT staff operate more efficiently/productivity is up in IT and so is the added value to business. That all adds up to a pretty significant project in terms of business value.
Want to Know More?
Is this how your company approaches network storage? Is there an alternate strategy that you can recommend? Talk back in our forums, or find more detail at Cisco IT@Work)
a site devoted to internal IT projects at Cisco. You'll find a very detailed case study, as well as a comprehensive ROI analysis.
And feel free to forward this column to colleagues who have a stake in this topic. We love to hear opinions.
For more details about Cisco's move to network-based storage,
Case Study
ROI Analysis
