Re: Cost Comparisons: Centralized Data Storage -vs- Local

[Bill Doster <umich.edu">billdo]

We also were involved in such a study here although the
centrally provided filespace was on a mainframe server.
Actually, it was less of a study and more of an attempt
(ultimately successful) to actually provide re-charged
central storage.

While you are correct that people putting forward the
lower cost of local solutions often don't include things
like maint and the like, we also found that *tangible*
costs often weren't the only things driving decisions.  Other
factors were how quickly new storage could be made available
by the local admin to the end-user, how quickly new technology
could be introduced, the ability to integrate with other
possibly local technologies, and the cost to the local
organization of centrally decided up and down times, and
perhaps most importantly the total dependence on the
network between local workstation and remote fileserver.
Failures and inflexibilities in these areas had a very
real impact on the local departments -- slow-turnaround,
increased administrative overhead, poorer integration
with other parts of their local environment, inability
to easily put off an upgrade during local midnight-oil
sessions...  Perhaps hard to quantify with a cost, but
important considerations nonetheless.

Until we took into account the less tangible costs, we 
felt that our potential customers were ignoring the obvious
cost savings they could be realizing.  After taking the
intangible costs into account, we realized that there was
a need for further dialogue to address those valid concerns
The results have become less clear cut, but now we have more
real customers and have also improved the service we are
delivering.

After spending several years involved  in exploring
different costing, pricing and funding models in a
re-charge environmen, I have come to feel that the
process of identifying which costs to count is the
most important part of the process.  Unless all parties
have an agreement that these represent the impact (cost)
on (to) them, they are unlikely to be moved by the numbers
that come out.  Garbage in, garbage out.

For what it's worth,

Bill Doster
Project Lead for Accounting & Billing System (ABS)
Project Lead for Identification, Authentication, Authorization (IAA)
Information Technology Division
University of Michigan