Are You Still Paying 2010 Prices for IT Storage?

By Kevin Davis

IT Account Manager, NPI

June 04, 2014

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NPI estimates that anywhere from 25 to 40 percent of companies overpay for storage. Is your business one of them? If you haven’t benchmarked your storage vendor’s prices, there’s a good chance the answer is “yes.”

Over the past 30 years the cost per gigabyte has gone down by half every 14 months. In 1985, the average cost per gigabyte was $105,000. Today, that cost is a mere $0.05. From 2010 to 2014, the cost of storage has dropped 44 percent. This is the case for all storage, not just mainstream EMC environments and this covers all vendors that provide storage for backups, applications, etc.

Here is a breakdown of the average cost per gigabyte over the last three decades:

  • 2013 - $0.05
  • 2010 - $0.09
  • 2005 - $1.24
  • 2000 - $11.00
  • 1995 - $1,120
  • 1990 - $11,200
  • 1985 - $105,000

Paying above fair market value rates isn’t the only culprit for storage overspending. Over-provisioning and outdated infrastructure also eat away at the IT budget, as evidenced by the most recent Uptime Institute's Server Roundup. This contest is based on the number of servers decommissioned and resources saved while businesses upgrade, eliminate and repurpose data center infrastructure. The Uptime Institute’s most recent research indicates that decommissioning a single rack of servers can save a business approximately $2,500 annually (this includes maintenance, energy and software costs).

If you’re not sure whether you’re paying too much for storage – you probably are. Before renewing storage contracts, enterprises should make sure they are paying the current fair market value rate, and explore areas where they can decommission or repurpose existing storage investments. It’s a relatively easy way to reduce IT spend without negative impacts to performance, and an area where NPI has helped hundreds of enterprises save 10 to 20 percent on purchases and renewals.