Are you at risk from escalating cloud storage costs?

December 2, 2011 Comments Off on Are you at risk from escalating cloud storage costs?

The damage wrought by the recent Thai floods has caused a significant run-up in disk drive prices. I described this situation in an earlier post.

While these increases have primarily been confined to the consumer marketplace, there’s a good chance that they will soon hit business users, too. Even though some of these wrecked factories are coming back online (or being moved to other locations), rising energy costs, soaring demand, and a shrinking number of disk drive suppliers can only exacerbate the impact of these potential price increases. Unfortunately, storage price increases will be counter to the trend – largely driven by Amazon – of steadily decreasing costs for commoditized storage.

Naturally, cloud is a voracious consumer of data, so just about every cloud solution may be impacted. But businesses are particularly at risk in two key cloud scenarios:

1. Big Data. More data than ever is being captured, managed, and analyzed. The cloud has been a natural fit in this situation: in a preponderance of cases, it’s more cost-effective and efficient than building internal infrastructure. An entire ecosystem is growing around cloud-based Big Data, with cloud-based integration and analytics just two examples of these new storage-hungry applications.

2. Cloud-based backup. In the past few years, enterprises have been adopting cloud-connected storage in lieu of onsite backup. There are many compelling reasons for this transition, such as strong vendor SLAs, economies of scale, and reduced labor costs. If you’re curious about this topic, take a look at the paper for i365 we wrote at Think88 .

Both of these scenarios consume enormous amounts of storage, and are highly sensitive to sudden, dramatic increases in storage costs such as we may experience.

Whether price increases are sudden or gradual, what should you do? I’ll explore that topic in an upcoming posting.

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