FOCUS ROI DataDomain VMware 0910

9.21.
2010
The ROI/TCO Benefits of EMC Data Domain Deduplication Storage and VMware
The ROI and TCO Benefits of EMC

Data Domain Deduplication Storage
and VMware
A FOCUS White Paper
Sponsored by:
September 2010
 2010 FOCUS, LLC www.focusonsystems.com Page 1

FC9.21.2010
Table of Contents
Executive Summary .................................................................... 1

Introduction ................................................................................. 2
Deduplication and Virtualization: Changing the Game........................................... 2
The Challenges of Backup ........................................................................................ 2
From Tape to Disk ...................................................................................................... 3
Changing the Data Protection Paradigm with Deduplication ................................. 4
ROI/TCO Justification for Deduplication Storage .................... 4
ROI/TCO Analysis Methodology ............................................................................... 4
The Business Case .................................................................................................... 4
Case Study #1: Large Regional Health Insurance Company ................................. 6
Figure 1: Breakdown of Costs and Savings for Health Insurance Company ........................................ 7
Figure 2: Contribution to Savings by Category for Health Insurance Company ................................... 8
Figure 3: TCO per TB for Health Insurance Company ......................................................................... 9
Figure 4: Financial Summary for Health Insurance Company ............................................................ 10
Case Study #2: Software Development Company................................................. 11
Figure 6: Costs and Savings by Year for Software Development Company ..................................... 12
Figure 7: Contributions to Savings by Year for Software Development Company ........................... 13
Figure 8: Summary of Operational Improvements for Software Development Company .................. 14
Figure 9: Financial Summary for Software Development Company ................................................... 15
Case Study #3: Major Medical Center .................................................................... 16
Figure 10: Cost and Savings over 5-year Period for Major Medical Center ....................................... 17
Figure 11: Contributions to Savings for Major Medical Center ........................................................... 18
Figure 12: Summary of Operational Improvements for Major Medical Center ................................... 19
Figure 13: Financial Summary for Major Medical Center ................................................................... 20
Conclusions ............................................................................... 20
Deduplication and VMware Virtualization .............................................................. 20
Data Domain and VMware Customer Results ........................................................ 21
Appendix A: Effects of Deduplication on TCO Components 22
Appendix B: Case Study Details .............................................. 23
About EMC ................................................................................. 24
Other Related Focus Research ................................................ 24
About Focus, LLC ..................................................................... 24
 2010 FOCUS, LLC www.focusonsystems.com Page ii

9.21.2010
Executive Summary
Deduplication has recently received significant attention as one of the game changing technologies of
the last decade. Likewise, server virtualization has been recognized as a game changer, and has
exploded over the past five years, reaching over a 90% market penetration. (Source: FOCUS Research
Series – Managing the Virtual Environment).
Interestingly, FOCUS research also shows that backup and storage issues are the top two pain points in
server virtualization implementations. In fact, backup issues often result in stalling the growth of
virtualization within an organization, creating a barrier to growing past the initial 25% virtualized,
towards the nirvana of 100% virtual.
Improving backup operations and reducing the storage costs involved in server virtualization are key to
the successful expansion of virtualization across an organization. Leveraging the game changing aspects
of deduplication in VMware environments can address not only the aforementioned pain points and
barriers to expansion, but can also offer a strong return on investment (ROI) and significantly reduce the
total cost of ownership (TCO) of virtual and physical data protection.
This paper examines and quantifies the costs and benefits of deduplication in VMware environments.
Three detailed case studies from large organizations in different industries are presented. For each of
these companies, the IT managers wanted more reliable and efficient backup and recovery, with less
operator intervention, and the reduction or elimination of tape. In each case, these goals were achieved,
along with a strong return on their investment with substantial savings as well.
The financial analysis includes the following:
 Direct and indirect savings including cost avoidance, supplies and services, and labor cost savings
 Net savings
 Return on investment (ROI)
 Total cost of ownership (TCO)
The net savings in these case studies ranged from roughly $500,000 to over $3 million. The ROI ranged
from 13% to 278%. In addition, the success of backing up with EMC Data Domain deduplication
solutions contributed to the companies’ abilities to grow their VMware environments, while reducing
their data protection storage costs. The companies achieved their overall goals, realizing the business
and operational benefits they were seeking, and at the same time recognizing significant cost savings.

FC9.21.2010
Introduction
Deduplication and Virtualization: Changing the Game
Recent FOCUS Research indicates that backup and storage challenges are the top two pain points in
implementing virtualization (See Virtualization Pain Points sidebar). In fact, problems in backing up in
virtual environments can be a major limitation – both in reducing the practical consolidation ratios of
virtual servers and in limiting the expansion of virtualization beyond the initial 20-30% virtualization
currently occurring in most IT shops.
Just as server virtualization has been a
Virtualization Implementation Pain Points
game changing technology in managing Backup challenges
server workloads, deduplication has Storage challenges
been a game changing technology in Difficulty troubleshooting performance problems
managing backup. Both virtualization Difficulty predicting storage requirements/growth
and deduplication focus on the benefits
Networking challenges
of consolidation, optimization and
Difficulty tracking & managing VMs
automation (servers or storage), and
Performance degradation
both deliver significant ROI and TCO
benefits. In fact, because server Difficulty managing security
virtualization makes it substantially Trouble moving from test to production

easier to provision new servers, the Advanced functions need networked storage
initial implementation of virtualization Source: FOCUS, LLC Research Series – Managing the Virtual Environment
is often followed by virtual server
sprawl, creating hundreds of duplicate server images (OS and application software), which contributes
to an even greater amount of duplicate data.
Combining deduplication and virtualization brings out the best in these two game changing
technologies. Applying deduplication technology in VMware environments helps address the challenges
of backing up and restoring virtual servers in increasingly short windows and with limited bandwidth.
This not only improves backup and disaster recovery processes while
reducing costs, but also helps overcome backup as a barrier to
expanding virtualization across the enterprise. Applying deduplication technology
in VMware environments helps
The Challenges of Backup address the challenges of backing
up and restoring virtual servers in
In both virtual and physical environments, exponential data growth,
regulatory requirements, and 24X7 availability requirements (and increasingly short windows and
the resulting decrease in backup windows) have all increased the with limited bandwidth.
difficulty in completing backups successfully in the allotted time.
Data growth is further exacerbated in virtual environments due to the virtual server (and associated
storage) sprawl that virtualization almost inevitably brings. Server consolidation using virtualization adds
to the backup window problem, since many virtual servers now reside on one physical server sharing
one physical pipe.

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It is not uncommon for organizations to routinely exceed their backup window or even have a backup
window that consumes most of the day. Such long backup operations leave little margin for error and
any disruption can place at least some of the data at risk of loss. Such operations also mean that a
guaranteed RPO of anything less than 24 hours cannot be met. Tape backup schemes (i.e., grandfather-
father-son) require that the same data be backed up over and over again, creating an abundance of
duplicate data.
Recovery time objectives (RTO) continue to decrease while the precision of the recovery point objectives
(RPO) increase. In other words, IT managers must be able to recover from a given failure quicker and
with less data loss. The time needed to find, mount, and search tape media is not fast enough to keep
pace with the changing RTO and RPO requirements of most organizations.
In addition, with the mechanical nature of tape, operational problems continue to be widespread. While
many organizations do not realistically expect to eliminate tape entirely, most want to minimize its use
and the corresponding operational problems.
As IT organizations seek to improve their data protection strategy going forward, they must address
both the virtual and the physical environments, which together include all of these challenges. In
addition, because of consolidations, mergers and acquisitions, many IT organizations are grappling with
remote operations, often with very divergent backup hardware and software. In many cases, these
remote offices do not have professional IT staff, but will still have the same data protection mandates.
Central control of remote backup is essential to maintaining the data integrity demanded by the
business.
One of the most challenging factors for IT Management is people. The more complicated the backup and
restore operations become, the more skilled people are needed. These people can be difficult to hire
and retain, and costs continue to rise. Even if qualified individuals can be found, budgets are tight, and
head counts are flat, making it difficult to hire them. The legacy of the recent economic downturn is the
mantra to “do more with less (or the same).”
From Tape to Disk

It has been many years since the industry has seen a fundamental breakthrough in tape technology.
Tape drives continue to get faster and tapes increase in capacity, but tape still involves the same
fundamental challenges it always has.
Automated robots make picking and mounting tapes faster, but offsite archive and retrieval cannot be
automated. Tape media must still be handled manually inside and outside the data center.
Transportation of tapes outside the data center for DR also involves human intervention and it
introduces a major security risk, through the possibility of lost or stolen tapes.
Best practices have evolved towards the use of tape solely for archive and long-term retention, with disk
based backup as the preferred option for the following reasons:
 To gain higher reliability and certainty of backup job success
 To reduce labor associated with tape handling and offsite transportation
 To provide a platform for deduplication enabling:
o longer online retention of backup data
o consolidation of backup data from remote offices and improved DR (over the WAN)

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Changing the Data Protection Paradigm with Deduplication

Although backup to disk in and of itself has improved the backup process, data deduplication, pioneered
by EMC Data Domain, offers a fundamental change in the way organizations protect data. Deduplication
changes the repetitive backup practice of tape, with only unique, new data written to disk. Furthermore,
with an average of 20:1 deduplication ratio commonly achieved (and often 40:1 or more in VMware
environments), backup data can be retained economically in the data center for long periods of time.
This reduces the odds that a data element must be retrieved from the vault. Furthermore, deduplication
and resulting data reduction enables backup data to be replicated over the WAN, adding an automated
disaster recovery (DR) solution at a very low cost. All of these factors can significantly improve the RTO.
ROI/TCO Justification for Deduplication Storage

Business case drivers such as more reliable backups, longer data retention, reduced labor and faster
backups and restores offer both soft and hard cost justification.
This white paper discusses case histories from real-world scenarios of three VMware customers using
Data Domain deduplication storage systems for both virtual and physical server backups. The case
studies document the actual savings experienced by these customers, each from different industries,
with their equipment installed for as long as three years.
In the three case studies presented, the net savings ranged from roughly $500,000 to over $3 million.
The ROI ranged from 13% to 278%. In addition, the success of backing up with Data Domain
deduplication solutions contributed to the companies’ abilities to continue to reduce their server TCO by
continuing their VMware growth, while also reducing their data protection storage costs. All three
companies achieved the business and operational improvements they were seeking, recognizing
significant cost savings.
ROI/TCO Analysis Methodology

The ROI and TCO information presented in this white paper is based on a financial analysis conducted by
FOCUS analysts. Historical financial data was used whenever possible, with future numbers based on
financial projections from the customers, based on past experience.
The data from the customers was entered into a customized ROI/TCO calculator created by FOCUS. This
unique tool takes all of the data into consideration, and calculates both ROI and TCO. All of the
numerical information and charts in this report were created using the FOCUS tool.
The Business Case

This paper discusses several financial-related terms: return on investment (ROI), total cost of ownership
(TCO), direct and indirect savings (including cost avoidance and labor savings), and net savings. A
definition of each term follows:
ROI (return on investment)

ROI is a measure of the financial return on an investment over a specified period of years (typically three
to five for IT), represented as a percentage. A minimum ROI may be required by corporate finance
departments in order to get approval on a project/acquisition.

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TCO (total cost of ownership)

A TCO model establishes a fully loaded, total cost of a project over time. Decisions are made by
comparing the TCO of one approach to the TCO of another. TCO is a cumulative number, over some
period of years (typically three to five for IT), and incorporates the changes in costs and benefits over
that period (e.g., due to data and storage growth). TCO includes capital acquisitions, maintenance, and
operational costs, and should include both cost components that are direct (e.g., hardware and software
acquisition, salary costs of full-time employees) and indirect (which are often difficult to quantify, such
as the cost of waiting for a file to be restored). The TCO categories used in this paper are Hardware,
Software, Support, Supplies and Services. Salaries generally are based on a 30% burden rate, to cover
insurance, benefits, etc.
Total savings
Total savings is the amount of both direct and indirect dollar benefits resulting from the project.
Net savings
Net savings is the net amount saved over a given time, calculated by subtracting the costs for that time
period, from the total savings for that time period.
Direct savings
When the project results in a direct cost reduction, where cash outflow is reduced, these reductions are
direct savings. Significant direct savings described by users in this paper’s case studies include:
 Supplies and services — These types of direct savings involve a reduction in the total cost of tape
media and the services to transport and maintain those tapes offsite. For users with a large number
of tapes, these savings alone can be staggering.
 Cost avoidance in hardware — These savings are the result of eliminating the need to purchase
additional tape hardware to complete backups within the available backup window, as well as for
performing tape backup in remote sites. For users already up against the window, or for users
eliminating tape in remote sites, this can be the largest percentage of savings. For organizations
already using disk-based backup, but without deduplication, savings can also come from adding
deduplication and reclaiming storage as a result.
Indirect savings
When implementing a project can save time (for IT staff or end users), the result is considered indirect
savings. Cost avoidance in labor is time saved by backup administrators, systems administrators, or end
users as a result of implementing the project. This savings would allow the user the choice of either
spending time on other projects or potentially reducing headcount (of full-time equivalents or FTEs). For
purposes of this paper, this category is calculated as a cost reduction.

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Case Study #1: Large Regional Health Insurance Company

The first case study is a large regional health insurance company, with approximately four million
customers, and seven distributed sites. The IT infrastructure includes 850 servers running UNIX and
Windows on both rack servers and blades, with 172 TB of data (excluding archive). The organization’s
environment includes VMware, Oracle, SQL, and mainframes, with CA management software. The
VMware infrastructure includes 377 VMs running on 35 ESX servers, with 60 TB of VM storage.
The organization’s goals included improving the efficiency of their IT operations overall and
consolidating distributed sites to a main data center and a
secondary DR site. They also wanted to improve the efficiency
of their backup operations. The IT staff had been experiencing Multiple products from multiple
challenges with backups, and had difficulty meeting backup vendors and with varying types of
windows, due in part to continuing data growth of about 30% deduplication were evaluated.
annually, and an increasing number of consolidated virtual
servers running on their ESX hosts. In addition, the IT staff “We chose EMC Data Domain
faced increasing challenges with the tape library robot and tape systems because it was the most
encryption. The organization was using offsite tape storage for elegant solution.”
DR and wanted to reduce offsite storage costs. The goal was to With Data Domain’s architecture
eliminate tape completely for the mainframe (and reclaim the and implementation of inline
floor space from the tape library) and go to monthly archive to deduplication, “Data Domain bet
tape for open systems. their money on Intel, and kept
The team started by looking at virtual tape libraries to address getting better and better reviews.
these challenges. Multiple products from multiple vendors and From ingestion to replication to
with varying types of deduplication were evaluated. According offsite, it was the best option.”
to the Director of Storage Management, “We chose EMC Data Director, Storage Management
Domain systems because it was the most elegant solution.” Large Health Insurance Co
Referring to the Data Domain architecture and its
implementation of inline deduplication, the Director said, “Data
Domain bet their money on Intel, and kept getting better and better reviews. From ingestion to
replication to offsite, it was the best option.” (For more information on the internal Data Domain
deduplication architecture and its ability to leverage processor improvements, refer to the EMC white
paper listed in the reference section at the end of this paper.)
In support of the data center consolidation efforts, the organization implemented multiple EMC Data
Domain DD880 systems at each data center. The team began the move to disk-based backup using Data
Domain systems, and is currently in the midst of an analysis to move all data center backup of its open
systems and mainframe application data to Data Domain systems. The team currently archives to tape
monthly, and is in the process of moving completely from Symantec NetBackup to EMC NetWorker, and
will be utilizing the EMC Data Domain Boost technology.
The team backs up its VMware storage using the standard CIFS interface on the Data Domain systems.
The organization has been growing its VMware environment, which, “became challenging to backup
once 30% had been virtualized.” The team is planning to use NetWorker with the VMware vStorage APIs
for Data Protection to improve VMware backup operations and expand to the remaining servers.

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The organization purchased the original group of DD880 systems for the primary data center in Year 1,
and purchased additional Data Domain systems in Year 2 for the secondary site (implemented at
SunGard as the DR site). Figure 1 provides a detailed breakdown of their costs and savings.
Costs and Savings - Breakdown
Total Direct
$8,000,000 Savings:
Supplies &
$6,000,000 Services
$4,000,000 Total Indirect

Savings:
Dollars
Cost
$2,000,000 Avoidance -
Labor
$- Total Direct
Savings:
Cost
$(2,000,000) Avoidance -
Hardware
$(4,000,000) Total
Incremental
$(6,000,000) Cost of Data
Domain
Over 3 Year Period
Figure 1: Breakdown of Costs and Savings for Health Insurance Company
As Figure 1 shows, the company spent $1.3 million for the new Data Domain infrastructure in Year 1,
and $1.8 million in Year 2, with the maintenance costs as the only addition in Year 3. The direct savings
from cost avoidance, supplies and services, plus the indirect savings of cost avoidance in labor exceeded
their incremental costs of Data Domain systems for each year as shown by the Net Savings, indicated by
the green line, which totals $3.2 million over the three-year period. (Net savings are calculated by
subtracting the Incremental Cost of disk deduplication storage (shown in red) from the total savings (the
sum of Total Indirect Savings (labor cost avoidance) and Total Direct Savings (supplies and services and
hardware cost avoidance).

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Figure 2 further illustrates the breakdown of the various savings. The IT staff predicted that without the
Data Domain solution, there would be a need for significant additional tape hardware in Year 1 and Year
2, which was avoided with the switch to Data Domain systems. These direct savings resulted in
hardware cost avoidance being the greatest contributor to savings, at 40%.
Contributions to Savings
Total Indirect Total Direct

Savings: Cost Savings: Supplies
& Services Total Direct Savings: Supplies &
Avoidance - Services
Labor 34%
Total Direct Savings: Cost Avoidance -
26% Hardware
Total Indirect Savings: Cost Avoidance
- Labor
Total Direct
Savings: Cost
Avoidance -
Hardware
40%
Figure 2: Contribution to Savings by Category for Health Insurance Company
In terms of supplies and services, by dramatically reducing their tape usage, their cost savings in media
approached $500,000 per year. In addition, offsite storage costs for Iron Mountain were reduced in the
first year from $464,000 to $230,000. These savings combined to contribute 34% of the total savings.
Labor savings were also substantial, starting with an avoidance to hire an additional FTE and
redistributing workload of two existing FTEs. In addition, faster and more reliable backups eliminated
the recurrence of previous outages that had been happening every one or two months as a result of
overnight jobs impacting daytime production systems. This eliminated future lost time for 300 customer
service reps. With all the labor savings combined, the indirect savings from labor represented 26% of
the total savings.

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Because of the cost savings of the Data Domain implementation as compared to what would have been
required for a tape-only implementation, the total cost of ownership for data protection was
significantly reduced across the three years. Figure 3 illustrates the TCO per TB for the two alternatives
(in blue and green bars), with the red line indicating the growth in TB over the three-year period.
TCO Per TB Over 3 Years
$7,000 1800
1600
$6,000
1400
$5,000
TBs of Storage
TCO in Dollars
1200
$4,000 1000
$3,000 800
600
$2,000
400
$1,000
200
$- 0
Year 1 Year 2 Year 3 Cumulative
TCO per TB of Data Domain (in cost per TB) TCO per TB of Tape (in cost per TB) Storage in TB
Figure 3: TCO per TB for Health Insurance Company

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Figure 4 shows the overall financial summary over the three-year period. With a total investment of
$3,727,388, the customer achieved a total savings of $6,922,579. This yields a total net savings of
$3,195,191 representing an ROI of 86%.
Savings: Yr. 1 Yr. 2 Yr. 3 Total

Direct Savings- Supplies &
Services 662,800 744,880 968,344 2,376,024
Cost Avoidance- HW 858,865 1,463,714 449,514 2,772,093
Cost Avoidance - Labor 444,728 578,146 751,589 1,774,463
Total Savings 1,966,393 2,786,739 2,169,447 6,922,579
Costs:
Total Incremental Cost of Data
Domain 1,378,470 1,818,183 530,735 3,727,388
Summary:
Total Net Savings with Data
Domain 587,923 968,556 1,638,712 3,195,191
ROI (3 Years) 86%

Figure 4: Financial Summary for Health Insurance Company
As a result of the implementation of Data Domain solutions, the customer has achieved its goals,
including:
 Implementing enhanced data protection with improved and more reliable backup and restore
capabilities
 Dramatically reducing tape usage
 Sending data backup volumes offsite, fast, efficiently, and securely
 Realizing cost savings in tape hardware, tape media, tape handling labor, offsite storage costs, and
floor space
 Building a data protection foundation to support current and planned virtualization growth

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Case Study #2: Software Development Company

As the North American operating arm of a billion dollar, worldwide software development company, this
organization has experienced the type of growth through acquisition that many large companies have
experienced. With a total of 4,000 employees in North America, the IT staff of 160 is responsible for a
highly decentralized organization and infrastructure, and has been working hard on centralizing their
distributed operations, including building a second data center for disaster recovery purposes. Their
distributed operations include sixteen remote sites from various acquisitions, all with different tape
libraries/loader and backup technologies, described by their Operations Director as “a nightmare.”
The organization manages 1700 servers (physical and virtual), with 1000 production VMs on 40 physical
hosts running vSphere in the data center, and 180 TB of protected and unprotected data. The remote
offices each had their own tape backup environments, with a total of 500 servers (virtual and physical),
which were 30-40% virtualized.
Many of the remote sites had minimal IT staff, while others had none, and in some cases, office
administrative staff members were the ones responsible for handling tapes. With the growth they had
been experiencing, they predicted that they would have needed additional tape hardware in each
remote location within two years. They use Symantec NetBackup in the data center, and are in the
process of rolling it out to their remote sites under an enterprise license, replacing Symantec Backup
Exec in eleven locations. To improve operations, the goal was to use offsite replication over the WAN to
replace physical tape movement significantly reducing the number of tapes and the labor involved.
At the outset, three different vendor products were evaluated, with pilots done of all three. The Data
Domain solution was selected for two key reasons: “The other pilots were not successful and replication
failed” and several members of the IT staff “had used Data Domain very successfully before.” The bulk of
the Data Domain implementation was completed over a six-month period, ultimately resulting in twenty
Data Domain systems being installed across the data centers and remote sites over the last 3 years.

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The rollout of the twenty systems started in Year 1, accelerated in Year 2 and completed in Year 3, at a
total cost over three years of $755,057. The project started slowly, with costs in Year 1 being under
$100,000. Savings were immediate, due to the avoidance of purchasing tape hardware in the most
stretched remote sites and to the reduction in tape media and labor, with net savings in Year 1 of
$643,640. Figure 6 shows the costs (in red), savings (in blue) and net savings (in green) by year and over
the three-year period. There was a positive net savings each year, with a total net savings over the
three years of $2.1 million.
Costs and Savings - Breakdown Over 3 Years

Total Direct
Savings:
$3,500,000 Supplies &
$3,000,000 Services
Total Indirect
$2,500,000 Savings: Cost
$2,000,000 Avoidance -
Dollars
Labor
$1,500,000 Total Direct
Avoidance -
$500,000 Hardware
$- Total Incremental
Cost of Data
$(500,000) Domain
$(1,000,000)
Figure 6: Costs and Savings by Year for Software Development Company

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As Figure 7 indicates, the immediate savings in Year 1 come almost equally from cost avoidance in labor
and hardware, followed by the reduction in tape supplies and services. The bulk of the savings in Year 2
come from hardware cost avoidance, largely from avoiding the purchase of the additional tape
hardware.
Contributions to Cost Savings - By Year

$3,000,000
$2,500,000
Total Indirect Savings:

$2,000,000 Cost Avoidance - Labor
Total Direct Savings: Cost
Avoidance - Hardware
$1,500,000
Total Direct Savings:
Supplies & Services
$1,000,000
$500,000
$0
Year 1 Year 2 Year 3 3 Yr Total
Figure 7: Contributions to Savings by Year for Software Development Company
There was also a significant savings in disk storage space reclamation, from using Data Domain’s
deduplication storage systems with several existing applications, most notably VMware, that had been
backing up to traditional disk (without deduplication). Reclaiming disk storage space represented an
additional savings of $230,000 across Year 2 and Year 3. Over half of this reclaimed storage was for
VMware, which with the virtual server sprawl that with VMware occurred across the organization,
would have continued to grow substantially.
Savings from labor costs surpassed both hardware and supplies and services savings in Year 3, since
there were major ongoing savings in labor costs. Over the three years, labor grew to be the major
contributor at 42%, followed closely by hardware cost avoidance at 39%.
In addition to overall savings, the customer also experienced improvements in TCO and cost per TB.
Figure 8 shows the reduction in 3-year TCO per TB for the previous tape only environment versus the
Data Domain implementation, showing a 39% improvement and a 3-year savings of $ $2,097,305. In
addition, since the total number of tapes needed dropped from 10,200 to only 500 to protect the same
amount of storage in TB, the cost of tape media per TB was reduced by 90%. Offsite transportation
costs did not change until Year 2, but still resulted in a cost per TB reduction of 69%.

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Savings
Tape Data %
Units over 3
Only Domain Improvement
Years
3 Year TCO Per TB Cost per TB $2,804 $1,713 39% $2,097,305
Cost per TB
Tape Media Cost Per TB $992 $97 90% $339,500
per Year
Offsite Storage & Cost Per

$65 $20 69% $31,612
Transportation Costs TB
Backup window Hours 50 30 40%
RTO (Recovery Time

Minutes 60 15 75%
Objective)
30-60
Backup Data Kept Online Days/Weeks 0 --
days
Figure 8: Summary of Operational Improvements for Software Development Company
In terms of operational improvement, the backup window, including VMware backups, was reduced
from 50 hours to 30 hours, with the recovery time objective reduced from 60 minutes to 15 minutes.
The amount of data kept online went from zero to between 30 and 60 days, with a data reduction ratio
averaging 22:1 aggregated across all protected data, including the VMware environment.
The tight integration between NetBackup and Data Domain systems utilizing OpenStorage will bring a,
“single pane of glass administration to our backups, allowing us
to report on backup success and replication, all through
“Data Domain improved the speed of
Symantec’s Ops Center reporting suite.” The Director of IS
backup/restore, and gives us a cost effective
Operations, summing up the improvement in the reliability of
means to keep 30-60 days of backup retention,
their backups, put it this way, “The success rate of backups has
with nearly real-time replication offsite.”
increased dramatically from what it was. Our previous success
Additionally, “with the virtual server sprawl we
rate was estimated at 65% versus our current success rate of
have seen with VMware, we would have had to
97%.”
invest in more hardware capacity (tape drives,
Furthermore, for their VMware environment, “Data Domain larger libraries, additional disk space) plus the
improved the speed of backup/restore, and gives us a cost cost of media to support this growth. With Data
effective means to keep 30-60 days of backup retention, with Domain storage, the ‘penalty’ for these growing
nearly real-time replication offsite.” Additionally, “With the VMware backups is minimal. The Data Domain
virtual server sprawl we have seen with VMware, we would solution removed a significant backup barrier to
have had to invest in more hardware capacity (tape drives, our continued expansion of virtualization.”
larger libraries, additional disk space) plus the cost of media to Director, IS Operations
support this growth. With Data Domain storage, the ‘penalty’ Software Development Company
for these growing VMware backups is minimal. The Data
Domain solution removed a significant backup barrier to our continued expansion of virtualization.”

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Figure 9 details the overall financial summary, showing a total incremental cost for Data Domain of
$755,057, resulting in a total net savings of $2,097,305. This represents an ROI over 3 years of 278%,
showing the financial strength of the Data Domain implementation, in addition to (and in large part,
stemming from) the major operational improvements.
Savings: Yr. 1 Yr. 2 Yr. 3 Total

Direct Savings- Supplies & Services 199,500 245,280 94,192 538,972
Cost Avoidance- HW 265,500 553,500 288,240 1,107,240
Cost Avoidance - Labor 276,640 387,296 542,214 1,206,150
Total Savings 741,640 1,186,076 924,646 2,852,362
Costs:
Total Incremental Cost of D2D 98,000 544,570 112,487 755,057
Summary:
Total Net Savings of D2D 643,640 641,506 812,159 2,097,305
ROI (3 Years) 278%
Figure 9: Financial Summary for Software Development Company
As a result of the organization’s enterprise-wide deployment of Data Domain solutions, the IT staff has
met its goals including:
 Improving the performance and success rate of virtual and physical backup and restore
 Improving DR by replacing tape and physical transportation with offsite replication using the
existing WAN infrastructure
 Eliminating backup constraints as a barrier to the successful growth of the VMware environment

FC9.21.2010
Case Study #3: Major Medical Center

Server virtualization has been very successful in the health care industry, and this major medical center
is no exception. With 350 servers running Windows and Linux, the organization has grown from four to
twenty VMware ESX hosts over the past five years. The software environment includes Windows, Red
Hat Enterprise Linux, Oracle, SQL Server, MS Exchange, and PeopleSoft as well as in-house developed
clinical systems applications. There are two data centers, three miles apart. The storage infrastructure
consists of 500 TB of storage, 750 TB if archive storage is included, with 189 TB primary data, 50 TB of
which is backed up. The IT staff has seen good success with VMware on the server side, and is now
evaluating expansion to desktop virtualization using solutions from VMware, Citrix or Microsoft. There
was a large tape library for backing up the mainframe and open systems environments, and the team
hoped to retire it and eliminate tape. Backups were completed using Symantec NetBackup for the
physical environment, with the VM infrastructure backed up using Vizioncore vRanger Pro.
Initially, there was one aging tape silo at the primary site, with tapes being shipped offsite in boxes.
There was no good DR capability without a significant purchase, which would have involved adding an
additional tape library at the secondary site, and replacing the aging tape silo at the primary site. The
team evaluated other tape libraries as well as disk-based deduplication solutions, and selected the Data
Domain solution due to its, “Ease of implementation/integration into our or any existing environment,
and less cost for better capability and DR, than the competing tape alternatives” according to the IT
Storage Architect.
Previously, tapes were shipped to the remote site, but the tapes could not be recovered there without a
tape library, or backup software/hardware. The tapes were being delivered by van and required a
minimum one-hour lead-time to get them back onsite at the primary data center, prior to any restore
processes starting.
The project began with the installation of two Data Domain systems
in Year 1, and they were so successful that two additional systems
higher capacity and performance were added in Year 2, with two … these changes allowed the staff
more even larger added in Year 3. Backups were switched from to eliminate the tape library, and
NetBackup to CommVault, and focused on disk-based backup using now the process, according to the
Data Domain storage, and began using synthetic fulls, which, “put IT Storage Architect, is to,
the nail in the coffin for tape.” “electronically replicate offsite,
and any copy can be restored from
Using Vizioncore to manage VMware backups to the Data Domain
either data center in minutes. No
storage, the VM administrators now write directly to an allocated
tapes in transit, no security issues,
share on each of Data Domain systems. All of these changes allowed
no waiting.”
the staff to eliminate the tape library, and now the process,
according to the IT Storage Architect, is to, “electronically replicate
IT Storage Architect,
offsite, and any copy can be restored from either data center in
minutes. No tapes in transit, no security issues, no waiting.” Major Medical Center

FC9.21.2010
Because of the demonstrated success and tangible benefits of the Data Domain solutions in the first two
years, the medical center made a significant investment in additional, larger Data Domain systems in
Year 3, knowing that it would be gaining the benefits of this purchase over the following several years.
In order to allow the ROI/TCO analysis to include the benefits for these years, the analysis for this
environment was extended to a five-year period. Figure 10 illustrates the costs and savings over the five
years, showing the costs (in red below the zero line), and savings by type (purple, beige and blue, above
the zero line). Net Savings, indicated by the green line, were positive every year except in Year 3, when
the new big systems were added for additional expansion. Even with this additional major purchase,
net savings over the five-year period approached a half million dollars.
Costs and Savings - Breakdown

Supplies & Services
$5,000,000
$4,000,000 Total Indirect
Avoidance - Labor
$2,000,000
Dollars

$1,000,000 Cost Avoidance -
$- Hardware
$(1,000,000) Total Incremental

Cost of Data Domain
$(2,000,000)
$(3,000,000)
Total Net Savings
$(4,000,000) with Data Domain
$(5,000,000)
Over 5 Year Period

Figure 10: Cost and Savings over 5-year Period for Major Medical Center

FC9.21.2010
Since the shift to using Data Domain systems allowed the company to retire the existing tape library,
and avoid the major purchase of two additional large silos, the hardware cost avoidance was the biggest
contributor to savings at 75%, as shown in Figure 11.
Contributions to Savings
Total Direct
Savings: Supplies
& Services Total Direct Savings: Supplies &
Total Indirect 7% Services
Savings: Cost
Total Direct Savings: Cost
Avoidance -
Avoidance - Hardware
Labor
18% Total Indirect Savings: Cost
Avoidance - Labor
Total Direct
Savings: Cost
Avoidance -
Hardware
75%
Figure 11: Contributions to Savings for Major Medical Center
These direct cost avoidance savings also include direct

savings from reclaiming storage through the Data Domain Prior to Data Domain, the VMware
systems’ deduplication as well as savings in software ESX servers were writing to block
licenses as part of the project. Prior to using Data Domain based SATA storage. They now use
solutions, the VMware ESX servers were writing backup NFS shares with deduplication on
data to block based SATA storage. They now use NFS the Data Domain boxes, which
shares with deduplication on the Data Domain systems, reclaimed a large amount of space
which reclaimed a large amount of space and saved and saved approximately $20K
approximately $20K immediately. With the VMware immediately. With the VMware
expansion that the organization is experiencing, this growth that they were experiencing,
capability continues to reduce VMware storage costs, and this capability continues to reduce
save additional money. VMware storage costs, and save
additional money.

FC9.21.2010
Since the goals of this IT organization were focused on operational improvements, the evaluation of the
project was also. Figure 12 gives a summary of the operational aspects of this company’s shift from tape
to disk.
Savings
Tape Data %
Units over 5
Only Domain Improvement
Years
5-Year TCO Per TB Cost per TB $2,011 $1,711 15% $835,807
Backup window Hours 72 5 93%
RTO (Recovery Time 12-24

Minutes/ Hours 1 hr 92%
Objective) hrs
VMware –
40:1
Oracle
Data Deduplication Reduction
-- 40:1 --
Ratio factor
SQL 38:1
Exchange
10:1
Figure 12: Summary of Operational Improvements for Major Medical Center
By eliminating the tape libraries, the total cost of ownership per TB has been reduced, with a savings of
$835,807. At the same time, the backup window has gone from 72 hours to five hours, an improvement
of 93%. The recovery time has gone from 12-24 hours to one hour. In addition to dramatically
improving both backup and recovery times, the organization is achieving substantial data reduction, up
to 40:1 in several environments, including VMware (which because of the OS and application software
images in the VMs tends to create a significant amount of duplication across VMs, and thus is a great
candidate for deduplication).

FC9.21.2010
Figure 13 shows the financial summary over the five-year period. Even with a total investment of
$3,825,080 over this period, there was still a total savings of $ 4,312,351, yielding a net savings of
$487,271 and a return on investment of 13%.
Savings: Yr. 1 Yr. 2 Yr. 3 Yr. 4 Yr. 5 Total

Direct Savings- Supplies & Services 173,000 22,100 28,730 37,349 48,554 309,733
Cost Avoidance- HW 977,660 987,820 395,698 427,448 432,459 3,221,084
Cost Avoidance - Labor 96,103 124,934 162,414 211,139 274,480 781,535
Total Savings 1,246,763 1,134,854 586,842 675,935 755,493 4,312,351
Costs:
Total Incremental Cost of Data Domain 518,000 799,240 1,578,320 464,760 464,760 3,825,080
Summary:
Total Net Savings with Data Domain 728,763 335,614 -991,478 211,175 290,733 487,271
ROI (5 Years) 13%
Figure 13: Financial Summary for Major Medical Center
In addition to the bottom line savings, the goals of operational improvement were clearly met, with
much faster backup and recovery times, and the elimination of tape greatly improving overall data
protection. As the IT Storage Architect so aptly put it, “No tapes in transit, no security issues, no
waiting.” Furthermore, as the VMware environment and its corresponding backup and storage
requirements grow, Data Domain deduplication solutions continue to reduce the cost of VMware
backups dramatically.
Conclusions
Deduplication has proven itself as a game changing technology, with both financial and operational
benefits and the potential for a radical change in the way companies manage both virtual and physical
environments. What this means is that data protection – including backups and DR – can become
reliable, highly automated and efficient, with fast backup times and fast recovery from local and remote
storage becoming a reality.
Deduplication and VMware Virtualization

Deduplication plays an especially important role when implemented in conjunction with virtualization.
The nature of virtual servers is to create multiple copies of the same or similar VM images, including OS
and application software, as well as application data. This creates large amounts of duplication. As
virtualization grows, along with the ease of provisioning new VMs comes virtual server sprawl,
increasing duplication even more. This makes VMware environments great candidates for deduplication.

FC9.21.2010
Furthermore, as virtualization becomes successful

within an organization, it grows from the initial Deduplication Benefits with VMware
pilot phase, to a 25-30% virtualized phase (as with
the case studies here), with many organizations  High deduplication ratios (e.g., 40:1 or
hoping to achieve close to 100% virtualized. With more)
backup as the number one pain point for  Reclaiming primary storage (used
implementing virtualization, in order to grow past previously by disk-based backup systems
phase two, organizations need to improve backup without deduplication)
operations for the virtual environment, meeting
shrinking backup windows and minimizing backup  Single solution across many different
storage costs. Again, deduplication offers great types of backup
benefits here.  Easy integration with many VMware
For those organizations who have been using disk- backup solutions such as Vizioncore,
based backup (without deduplication) of ESX NetBackup, Backup Exec, NetWorker
servers, (as exemplified by two of the case studies  VM administrators can store directly on
here), Data Domain systems offer additional NFS share on Data Domain and benefit
benefits such as reclaiming disk space through from deduplication with no additional
deduplication. VM administrators can simply work
allocate NFS shares on a Data Domain system, and
they can immediately reclaim primary storage  Integrated VMware backup for users
previously used for backup and gain the associated moving from agent based backup to
cost benefits. vStorage APIs for Data Protection (VADP)
All the customers in these case studies also talked
of the ease of integration with various backup solutions used with VMware, including Vizioncore,
NetWorker, NetBackup, and Backup Exec. Since Data Domain systems can be used with solutions for
both virtual and physical environments, the result is a consistent backup solution across the IT
infrastructure.
Data Domain and VMware Customer Results

These three VMware Data Domain case studies show a variety of companies, in different industries, with
different environments and varying levels of decentralization. All show huge improvements in their
operations with cost savings across the board, and a solid return on their Data Domain investments. In
addition to local improvements, deduplication enabled replication over the network. This allows
companies to move to a new paradigm for backup and DR, including the replacement of tape with
replication to a secondary data center, and/or multi-site consolidation. This paradigm shift offers IT
organizations the opportunity to minimize tape use, and all the associated management costs.
Overall, these VMware and Data Domain customers are extremely pleased with their results. They have
successfully leveraged these two game changing technologies together to achieve more reliable and
efficient backups and restores, improved and cost-effective disaster recovery plans, more productive IT
staff, and a stronger foundation for moving towards 100% virtualization – all while reducing costs,
yielding a solid return on their investment.

FC9.21.2010
Appendix A: Effects of Deduplication on TCO Components
TCO TCO
Effect of Deduplication Storage Calculation of Costs/Savings
Category Component
Tape Backup Reduction or elimination of need No additional tape hardware,
Hardware & for any or additional tape possible elimination of current
Maintenance libraries, drives, or media servers hardware, and avoidance of
in local and/or remote offices. future hardware
Dedupe Backup Incremental cost of deduplication Incremental initial costs plus any
and Storage hardware for storage and WAN additional required over 3 years
Hardware
Hardware & vaulting/replication.
Maintenance Savings from reclaiming any Subtract cost of disk storage
storage used previously for disk- reclaimed through deduplication
based backup without
deduplication
Backup With deduplication storage, no Subtract cost of additional

Software additional software. Avoids cost licenses required by tape
Software
Licenses & of additional backup licenses. backup
Maintenance
Labor (Backup Reduced labor in tape mounting, Number of hours saved per
Admin FTEs) handling, and transporting from week
remote offices.
Labor Time saved due to faster Number of restores per week
(Sysadmin, restores. times number of hours saved
Support Backup Admin per restore due to data being
FTEs) kept online
Labor End-user time saved per year Number of users affected, times
(Sysadmin, due to faster restores. Number of restores per week
Backup Admin
FTEs
Tape Media Reduction in number of tapes. Reduced number of tapes in
inventory and added per year
Supplies
(after implementing Data
Domain) times cost of tape
Offsite Tape Reduction in storage, Average reduction in invoiced
Storage & transportation, and tape recall costs after implementing Data
Services
Transportation costs. Potential elimination of Domain
service contracts at remote sites.

FC9.21.2010
Appendix B: Case Study Details
#1 #2 #3
Amount of Storage in TB 700 700 750
Amount of Data in TB 172 180 189
% Growth over 3 Years 30,30,30 40,40,40 30,30,30
Annual tape media cost before Data $478,800 $357,000 $195,000
Domain
Ongoing cost of tape media after Data $50,000 $42,000 $17,000
Domain
Offsite Storage Costs/Yr Before Data $464,000 $10,450 -
Domain
Offsite Storage Costs w/Data Domain $230,000 $1,750 -
(Yr 1)
# FTEs for Backup and Support 4 2.5 .25
Tape Handling Hours Saved 35/wk (and 2 60/wk 0
FTEs redployed)
Admin Time Saved due to faster 0 10/wk 10/wk
Restores
User Time Saved due to faster 150/wk 6/wk 24/wk
Restores
Data Kept Online after Data Domain 5 weeks 30-60 days 30 days
Data Reduction Ratio with Data 15:1 22:1 VMware – 40:1
Domain across all protected Oracle- 40:1
applications
SQL- 38:1
Exchange - 10:1
Backup Window Before and After 11 hours, but 50 hours to 72 hours to
Data Domain doubled the 30 hours 5 hours
amount of data
Recovery Time Improvement 30 hours to 60 minutes to 12-24 hours to
12-16 hours 15 minutes 1 hour
All trademarks are the properties of their respective owners.

FC9.21.2010
About EMC
EMC Corporation (NYSE: EMC) is the world’s leading developer and provider of information
infrastructure technology and solutions that enable organizations of all sizes to transform the way they
compete and create value from their information. Information about EMC’s products and services can
be found at www.EMC.com.
Other Related EMC Data Domain Deduplication Storage Information

“Data Domain SISL Scaling Architecture”
http://forms.datadomain.com/go/datadomain/WS_WP_SISL_10
“VMware Backup and Recovery Best Practices with Data Domain”
http://forms.datadomain.com/go/datadomain/WS_WP_VMWDDBP_10
Other Related Focus Research

Focus has published the following related reports. For more information, or to browse additional Focus
research please go to http://www.focusonsystems.com/store/.
Focus White Paper: The ROI and TCO Benefits of Data Deduplication for Data Protection in the Enterprise
Focus White Paper: Extending D2D to Offsite DR: The ROI Case for WAN Vaulting
About Focus, LLC

Barb Goldworm, president and chief analyst of Focus, LLC is a well-known industry expert, frequent
keynote speaker, author, and columnist on virtualization, and storage. She has spent 30 years in
technical, marketing, sales, senior management, and industry analyst positions with IBM, Novell,
StorageTek, EMA, and multiple startups. Barb is virtualization chair for Interop, COMDEX, and Data
Center Insights, chaired Blade Systems Insight and the Server Blade Summit on Blades and
Virtualization, created and chaired the Network Storage Track of Interop, and has been one of the
top rated expert speakers at Data Center Decisions and Storage Networking World. Barb has been a
regular expert columnist and speaker for TechTarget, Ziff-Davis, Computerworld Storage Networking
World Online, Network World and Information Week. She has published hundreds of articles,
business and technical white papers and market research reports, as well as the book, “Blade Servers
and Virtualizations”, published by Wiley.
Focus delivers independent research, analysis and consulting, focused on systems, software,
storage, and next generation data center technologies such as virtualization and cloud computing.
Focus areas include: Virtualization to Cloud Computing; Systems, Storage and Enterprise
Management (Physical and Virtual); Server, Desktop, Application and Storage Virtualization; High
Availability, Disaster Recovery, Business Continuity, Backup, Data Protection; Storage Networking;
Storage, Network, and I/O Virtualization; Storage Technologies; Blade Systems, and Business Benefits
of Technology (ROI, TCO). www.focusonsystems.com

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9.21.

The ROI and TCO Benefits of EMC

A FOCUS White Paper

 2010 FOCUS, LLC www.focusonsystems.com Page 1

Executive Summary .................................................................... 1

 2010 FOCUS, LLC www.focusonsystems.com Page ii

 2010 FOCUS, LLC www.focusonsystems.com Page 1

virtualization makes it substantially Trouble moving from test to production

 2010 FOCUS, LLC www.focusonsystems.com Page 2

From Tape to Disk

 2010 FOCUS, LLC www.focusonsystems.com Page 3

Changing the Data Protection Paradigm with Deduplication

ROI/TCO Justification for Deduplication Storage

ROI/TCO Analysis Methodology

The Business Case

ROI (return on investment)

 2010 FOCUS, LLC www.focusonsystems.com Page 4

TCO (total cost of ownership)

 2010 FOCUS, LLC www.focusonsystems.com Page 5

Case Study #1: Large Regional Health Insurance Company

 2010 FOCUS, LLC www.focusonsystems.com Page 6

Costs and Savings - Breakdown

$4,000,000 Total Indirect

Over 3 Year Period

Figure 1: Breakdown of Costs and Savings for Health Insurance Company

 2010 FOCUS, LLC www.focusonsystems.com Page 7

Total Indirect Total Direct

 2010 FOCUS, LLC www.focusonsystems.com Page 8

TCO Per TB Over 3 Years

Figure 3: TCO per TB for Health Insurance Company

 2010 FOCUS, LLC www.focusonsystems.com Page 9

Savings: Yr. 1 Yr. 2 Yr. 3 Total

Cost Avoidance- HW 858,865 1,463,714 449,514 2,772,093

Cost Avoidance - Labor 444,728 578,146 751,589 1,774,463

Total Savings 1,966,393 2,786,739 2,169,447 6,922,579

ROI (3 Years) 86%

 2010 FOCUS, LLC www.focusonsystems.com Page 10

Case Study #2: Software Development Company

 2010 FOCUS, LLC www.focusonsystems.com Page 11

Costs and Savings - Breakdown Over 3 Years

Figure 6: Costs and Savings by Year for Software Development Company

 2010 FOCUS, LLC www.focusonsystems.com Page 12

Contributions to Cost Savings - By Year

Total Indirect Savings:

Figure 7: Contributions to Savings by Year for Software Development Company

 2010 FOCUS, LLC www.focusonsystems.com Page 13

3 Year TCO Per TB Cost per TB $2,804 $1,713 39% $2,097,305

Offsite Storage & Cost Per

Backup window Hours 50 30 40%

RTO (Recovery Time

 2010 FOCUS, LLC www.focusonsystems.com Page 14

Savings: Yr. 1 Yr. 2 Yr. 3 Total

Cost Avoidance- HW 265,500 553,500 288,240 1,107,240

Cost Avoidance - Labor 276,640 387,296 542,214 1,206,150

Total Savings 741,640 1,186,076 924,646 2,852,362

 2010 FOCUS, LLC www.focusonsystems.com Page 15

Case Study #3: Major Medical Center

 2010 FOCUS, LLC www.focusonsystems.com Page 16

Costs and Savings - Breakdown

Total Direct Savings:

$(1,000,000) Total Incremental

Over 5 Year Period

 2010 FOCUS, LLC www.focusonsystems.com Page 17