Many IT vendors tout their low TCO (total cost of ownership) usually explained as CapEx plus OpEx. While these are important numbers to consider when evaluating new products, there is one other number that may be more critical: CrapEx.
If you’re not familiar with all of these terms, here are brief definitions:
CapEx, or capital expense – the amount of money you spend up front to acquire new hardware or software.
OpEx, or operating expense – the amount of money you spend to actually use, manage and maintain them.
CrapEx, or crappy expense – the amount of money you waste by having overly excessive OpEx.
In real-world storage scenarios, OpEx vastly outstrips CapEx. IDC reports companies typically spend twice as much managing storage as its original purchase price [Matt Eastwood, IDC, Worldwide Server, Power and Cooling, and Management and Administration Spending 2014-2018 Forecast] with utilization costs as much as double acquisition costs for a final OpEx that is four times CapEx itself.
Why is OpEx so damn high? There are a variety of factors, including:
- Management time and effort: labor will always be one of the biggest components of OpEx.
- Maintenance and contracts: in addition to internal staff costs and replacement parts, add in service and support by vendors and third parties.
- PCFE: power, cooling, floor space, and environmental costs are climbing.
- Software licensing, upgrades, patches: while not always easy to predict, you can be sure they will go up.
- Depreciation: accounting for the loss of value over time depends on the length of the asset’s lifecycle.
- Downtime: the cost of disruption can be acceptable or it can be mind-numbingly astronomical, depending on the nature of the business and industry.
- Redundancy: double all the overhead costs above, except the cost of downtime.
I don’t think it’s outrageously unrealistic to want OpEx that is roughly equal to CapEx. However, achieving that equality means slashing OpEx drastically. So how do we get there?
Pencils out! Add up all your OpEx numbers. Subtract CapEx. The resulting number is your CrapEx: the amount of money you shouldn’t be spending on storage.
The CrapEx of software can be surprisingly high. Software requires no physical real estate and is arguably low in energy costs. However, vendors are fond of licensing costs that rival even the most Draconian “hidden fee” schemes. Manually running common processes, training time for complicated products, troubleshooting, after-hours support, and productivity loss further drive software CrapEx.
The OpEx of keeping a storage infrastructure running may also be unexpectedly high. HDD systems suck a lot of energy spinning 24/7, needing upkeep and repair as they age. These floor space, power and cooling, and maintenance requirements take up huge portions of IT budgets yet the storage capacity within this infrastructure is often underutilized, requiring unnecessary resources that yield higher CrapEx.
Even though a new all-flash array is more expensive up front, it has far fewer moving parts, consumes less power, and won’t need upgrading for a good long time, so its OpEx should be lower, and its CrapEx better, right? That’s not the whole picture either. The unforeseen cost of migrating to a new flash device is the fact that it’s labor-intensive and error-prone, perhaps more so than any other storage chore. Managing an entirely new and different storage platform (provisioning it, learning it, protecting it, among others), means the CrapEx of integrating flash can still be ludicrous.
The better way to stop all this tomfoolery is by actively managing storage in a different way.
Distributed, converged, and software-defined models generally reduce OpEx through automation and orchestration, and can enable the use (and re-use) of commodity and legacy hardware to even reduce CapEx.
Read Part 2 of this series to see exactly how ioFABRIC Vicinity reduces OPEX, and Part 3 to see how you can save on CAPEX – and finally cut the Crapex once and for all.