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Information Governance: The business case for cloud-based archiving

JoeGarber on ‎07-26-2013 08:35 AM

The Cloud is a hot topic today, but why?  One clear reason we’re hearing from customers is that the old myth that cloud-based solutions are too expensive – i.e., you’re paying for more than you need – is being revisited and found to be inaccurate.  According to the 2012 IDC Cloud Tracker Survey, 44% of 2012 IT budgets were spent on cloud computing, and this is expected to grow to 51% in two years.  Cloud investments also increased by 10% over 2012 alone.  Lowering TCO and decreasing CAPEX are cited as top drivers for this shift. 


In this post, we’ll look at some of the key factors to consider when evaluating potential cost savings of a cloud deployment.  To make this breakdown more tangible and specific, we’ll look at these factors with a given scenario in mind – we will compare costs of information archiving solution between an on-premise deployment and its more-contemporary cloud-based cousin.   


Lower up-front costs with cloud archiving


The most significant costs savings delivered by cloud archiving likely comes from the decreased up-front capital expenses -- stemming from hardware, storage, infrastructure, and software licensing (e.g., Microsoft Server, SQL, vendor archive software, etc.).  Depending on the size of the organization, these expenses can be significant with the on-premise alternative, and in many cases require professional services from the vendor to fully implement the solution.  In addition, the on-premise solution cannot be scoped to a business’ current needs, which means it must be built based on a worst-case scenario of data/storage growth, employee growth, anticipated eDiscovery, legal hold, data access requirements, and uptime SLA’s.  Should these requirements be underestimated, additional capital expenditures will be required in the future.  At the same time, the organization will have so much unused capacity at the outset that the ROI will be pushed significantly into the future, or may not be realized at all before the hardware, infrastructure, or solution become obsolete. 


Don’t forget the indirect costs


There are also many indirect costs required to support an on-premise solution that most organizations are unable to account for accurately, including:  power, cooling, floor space, use of storage and network infrastructure, and IT personnel to manage hardware and software patches, updates and other solution maintenance.


Eliminate the initial CapEx


With a cloud-based archiving solution, there is no large initial capital expense, but instead a predictable operating expense that can be scaled up or down on an on-demand basis to meet specific archiving/eDiscovery needs.  Typically there is a monthly archive cost based on the number of users or amount of data.  This monthly cost will pale in comparison to the initial outlay of an on-premise solution.  Compounded by the many ongoing indirect costs it is unlikely, though possible depending on the case, for the on-premise solution to provide a more favorable TCO. 


Pay-as-you-go and save


The scalability of a cloud archiving solution enables an organization to pay only for the services and capacity that they require, according to their current business needs and demand.  This is essential to enabling an organization to maintain its business agility and avoid large capital expenditures.  This agility will allow a company to efficiently meet its changing needs including employee growth, data growth, and dealing with spikes in demand such as litigation.  Most companies are not continuously involved in litigation and therefore may not require significant eDiscovery, data processing, and  review resources at hand.  With on-demand scalability, organizations can ramp up these specific capabilities to search, process, and review terabytes of data and millions of documents only as needed.


Budget predictability


The cost predictability of cloud archiving enables an organization to accurately budget and forecast operational expenses.  With a cloud service there are no hidden indirect costs such as power, floor space, or hardware/software maintenance to encumber the budgeting process.  With a clear understanding of operational costs, IT budgets can be forecasted further into the future to better allocate IT resources. 


Reduced IT burden


A large expense of running an on-premise solution comes from the ongoing management of the solution.  Archiving is a business-critical system and priority must be given to ensure performance and reliability.  IT resources will need to be dedicated to oversee all aspects of the archiving system including:  server maintenance, software updates, infrastructure upgrades, helpdesk requests, and performance tuning.  These IT resources will need to be engaged for the life of the archiving solution.  By implementing cloud archiving, IT resources can be utilized for other business priorities, rather than incurring the opportunity costs of additional productivity and innovation.


Minimized user disruption with anytime access


Unfortunately, the processes of hardware maintenance and software updates require the archiving system to be down for periods of time.  Given the expectation of anytime access to critical information by end users, this presents potential business impact in the form of time, cost, and user experience.  Beyond system maintenance, organizations must also ensure the overall reliability and uptime of the archiving solution through high availability, backup and disaster recovery processes.  The IT resources required to manage a high availability and disaster recovery program for a large volume of constantly changing archive data can be significant.  Necessary efforts include managing backup tapes, off-site data storage, backup/replication/high-availability software, data restores, and redundant hardware/storage systems.  Even through these efforts, most organizations cannot rival the near 100% uptime that cloud archiving provides, enabled by datacenter-class high availability, backup and disaster recovery capabilities. 


The high cost of sophisticated high-availability systems


Few companies can dedicate the resources to maintain datacenters in multiple geographic locations, large data pipes between locations for efficient replication and disaster recovery, or sophisticated high availability systems to ensure near-anytime data access and data loss prevention.  By leveraging cloud archiving, organizations can reduce the IT costs affiliated with data availability, repurpose IT resources to other priorities, and simultaneously provide datacenter-grade disaster recovery and availability with near 100% uptime.




When adding up all of the above cost factors, it’s difficult to refute that cloud-based information archiving solutions deliver a better business case than on-premise alternatives.  As old stereotypes of high-cost cloud solutions – likely driven by misperceptions and calculations for on-premise that are based on only a portion of total costs – begin to wane, it’s clear that the trend toward the cloud will start (for many organizations) with an information archiving deployment.  This will be true for both those organizations that are implementing an archiving strategy for the first time, as well as for those corporations that are ready to modernize their legacy archiving technology.  For the latter, there are simple and cost effective migration programs currently in place, which will further fuel the growth cloud-based archiving solutions in the near term. 





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About the Author


Joe Garber is Vice President of Marketing for HPE’s Information Management and Governance business unit – a division of HPE Software. In this role, he leads thought leadership, product messaging and go-to-market efforts for the organization’s Adaptive Backup & Recovery, Information Archiving, Secure Content Management and eDiscovery businesses.

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