I have been reading David Merrill’s Cost of Storage series. It has been a good read so far.
I do have a few things I would like to point out. Usually I would comment, but it is easier to put them all in one place on my blog vs. different comments on all of the posts over there.
Categories 1 and 2 + Categories 3 and 4 are real dollar costs that will be depreciated over the life of their usefulness. Of course how this is done depends greatly on both the company purchasing the hardware and software as well as the company selling the hardware and software. Most companies are going to purchase multi-year maintenance plans for their software and hardware. However the IT department calculates it the business will take it as a capital expenditure and depreciate it over the life of the maintenance plan. Given this, I disagree of their positioning on the chart.
The next four categories (5 & 6 + 7 & 8) are not grouped very well. The grouping should be Categories 5, 6, & 7….Then Category 8. The first three categories relate to the loss of revenue and should be an operational expenditure. Reducing the potential data loss and service downtime is a very large portion of the overall value.
Category 8 will be in the next review…
Of course all of these can be done differently at different companies; however, no company can ignore basic accounting principles (well, they shouldn’t)