By Khoo Boo Leong | Jul 15, 2009
1. It’s not cloud computing
“Storage on demand (SoD) or utility storage is an acquisition model,” said Raymond Siow, director of ASEAN Program and Alliances at NetApp. “Instead of paying upfront for the storage equipment, you pay based on the storage you use – just like electricity.”
Unlike cloud-based storage-as-a-service, it has no element of managed services. SoD is similar to renting storage equipment for the long-term. “You can manage and configure it according your needs during the contract term,” Siow said. “It is almost like owning the equipment since this is deployed in the company’s premise.”
By contrast, cloud computing is more of an operations model, which involves managed services and subscription fees. A cloud-based service operated and managed by a third-party service provider means that a service level agreement (SLA) has to be specified whereas the utility storage model does not involve an SLA.
“Cloud computing is more applicable for enterprises planning to transform the way they run IT and it’s a lot more complex with security and data privacy concerns,” said Siow.
2. It offers more flexibility than leasing
While SoD is essentially a financing scheme, it promises more features than traditional leasing.
SoD allows customers to commit to a small minimum baseline beyond which usage can be varied up and down. Depending on the environment and usage methods, enterprises can derive savings of up to 20%.
For example, in the traditional leasing model, vendors typically sell storage by the terabytes in the enterprise space.
“So, if you are on a leasing or purchase model, to facilitate a demand for 500GB of additional storage, companies may be forced to pay for at least 1TB of storage,” Siow said. “In addition, the 500GB demand might vary down to 300GB. If that happens, the customer will save with SoD because they only pay for what they use.”
In other words, SoD doesn’t make sense if usage patterns fluctuate radically in chunks of storage trays. But if usage is fluctuates frequently in smaller capacities, then SoD makes a lot of sense.