Business Continuity

Storage: Buy, Build or Restore?

Over the last 20 years we have seen the cost of hardware and software plummet. For the most part, smaller companies can now run the same computing solutions as large companies.

But there is still a lot of specialist and expensive hardware in the market, especially for storage. At CeBIT this year, several specialist hardware refurbishers claimed they were seeing a significant increase in business from companies wanting to extend the life of high-end hardware. Vendors like Datacore offer tools to combine heterogenous storage hardware into a SAN to give old storage a new lease of life. Should you be considering this for your customers as a way to offer sophisticated storage systems at lower prices or is the risk not worth the rewards?

Refurbishing some hardware makes sense. Changing disk drives for newer drives or adding more memory do not require specialist companies or skills. Even upgrading a processor is a relatively simple task. But does it really make sense when brand new and second hand hardware is so cheap? The cost of the components and the time taken to do the upgrade can often outweigh the replacement cost.

But what about the second-hand market? If you buy new hardware, you might think that you can get something back for your customer for their older hardware. A couple of years ago, you may well have done, but a glut of second-hand hardware has come onto the market recently and prices are depressed. There may still be some value in old hardware, especially if a vendor offers promotional trade-in offers on their own or commercial products, (HP and Sun run regular trade-in programmes and storage specialists Xiotech and Pillar have both recently announced trade-in offers),  but make sure you can make enough to cover your time and ensure all data is removed before sale.
Buying second-hand can look like a bargain but as with upgrading, one of the big risks is that when something breaks, you often have no warranty. Most eBay sellers will offer a 30-day return if the hardware is dead on arrival or if it fails in the first month. But that means you need to act quickly to unpack, install, commission and test the hardware before use. You then need to prove that the fault was there all along and not caused something you did.
A better bet is to consider refurbished products direct from the manufacturers (we’ll be covering this in detail in a future issue) or the increasing number of second-hand resellers on eBay who run professional businesses and who concentrate on hardware from a small number of major manufacturers. These companies will not only offer you a better warranty but they will also build to order at a very low price and pass on any manufacturer warranty that may still be available.
But for many, buying new may still be the easiest solution. A few years ago, the storage market was just beginning to explode with a range of high capacity, external USB drives. Today, many of those vendors now see themselves as entering the mainstream storage market with multi-terabyte solutions aimed firmly at the mid-tier market.

Buy it
When selling new storage the key decision is ‘what does the customer actually need’. It might sound like a blindingly obvious statement but the storage market is getting very complicated and customers will often see ‘good deals’ and not know if they are right for their environment.
One problem is that they often significantly overestimate how much storage they need; the other is that they often underestimate how much storage they need – often they do both but for different applications. For example, go through their direct attached storage inside servers and see how much is actually used. Look at any existing NAS and even SAN storage they may have and do a capacity plan.
What will inevitably come out is that a lot of space cannot be used or it is undesirable to reuse it. More importantly, now you have a capacity plan, it is possible to direct them to the best solution.
When buying new storage, it is important to align it with long term goals. Storage consolidation projects will reduce the amount of hardware the customer has today but will cost them more, because they’re buying hardware capable of running reliably for three to five years. However, the savings in terms of the lower power requirements from consolidation, reduced drive numbers and newer management interfaces will pay off. Moving to consolidated storage also requires you offering additional consultancy services to the customer.
Using second-hand, older generation hardware immediately compromises much of the power saving because they have less efficient power supply units and motherboards and drives need more power.
But the most important advantage of getting customers to buy new is a reduced support load and the knowledge that there is a manufacturer’s warranty when it goes wrong. Storage arrays can be expensive and having to replace them at your cost because you went down the refurbished route rather than new is a false saving.

Build it
Building storage arrays might seem simple. The basic ingredients are a chassis, motherboard, processors, memory, a good controller card and a lot of disks. Once you have assembled all of that, you just need some software to make it work as a storage array. Simple? Maybe. But what about cheap?
I recently built a new storage array for my own test network. It's a 5U chassis, twin-socket motherboard with a pair of low power Intel Quad core Xeon processors, 16 GB RAM and 8TB of hard disk. Eventually this will reach 24TB or even 48TB as I add larger and new hard disks. So what were the components and how much did they cost?
The first thing to say is that I chose the components based on a set of compromises. I'm not doing a lot of processing so I was happy with 1.6GHz CPUs. The disks are commodity drives which are not rated for 24x7x365 but I'll be using RAID 6 giving me a deal of protection so that an array rebuild doesn't cost me all my data. All the prices here are ex-VAT.



Cost £

Bought from


EST-524 TST with three 450W redundant power supplies




Supermicro X7DBE


Private sale


2 x Intel E5301 quad core processors


LA Micro


4 x Hynix 4GB PC2 5300


LA Micro


8 x Samsung HD103SI - 1TB

2 x WD Scorpio Black - 160GB




Controller Card

Adaptec 5805 8-port controller card with 512MB cache




Motherboard mounting components




Total ex-VAT



Building this server took a little over half a day and the costs are comparable with purchasing a new 8TB solution from several vendors such as Seagate and Iomega. However, there are 16 unused slots which, using the same components, means that each additional 8TB (Adaptec controller card plus disks) will cost less than £800 to add.
What is missing is an operating system and the software SAN. These would be required for any solution, so they are not shown as part of the build cost above but if you don’t already have licences they can raise the price above the cost of an appliance. The underlying operating system I used is Windows Server 2008 and the storage virtualisation solution isSANmelody from Datacore( If you already have a SAN virtualisation solution you only need to point it at this box in order to get at the disks.
SANmelody was chosen as it provides thin provisioning as part of the main package and can be extended to support features such as snapshots, backup, synchronous and asynchronous failover and integration with VMware.
The only drawback compared to Datacore’s enterprise SANsymphony software is that the maximum amount of storage in a single server platform that SANmelody will address is 32GB. Although this box could later be extended to 42TB by using 2TB drives, that is unlikely to happen.
There are two options for this storage box. The first is to provide a SAN to backup the new virtualised environment I've built. It would allow all the virtual machine images to be sent to the servers on demand, across the LAN. The other alternative is to use it as a failover box using asynchronous storage which would allow me to offer backup support to a small number of people customers.
In either case, the costs work out well for what I want to do and how I want it to work and I'm happy supporting this on a customer site.

Restore It
The growth of the second-hand market means it’s possible to acquire good quality second-hand hardware which you can then refurbish and provide to customers. The key business risk here is that you will need to provide a warranty for the customer.
The mistakes a lot of companies make when buying second-hand kit for refurbishment and resale are not looking carefully enough at the costs involved or assessing the risk. Watch enough eBay auctions and you will find people can often bid prices up to within 20% of the ‘as new’ price. At this point, with no warranty, and often no VAT to reclaim, you may as well buy new.
Another problem with eBay is that a lot of the hardware is several generations old and not complete; for example, with no rack rails or disk caddies. The latter is extremely common and any claims from eBay vendors that you can simply get spare caddies from vendors should be treated with great care. Asking HP, Dell/Equallogic and Infortrend about this claim caused great amusement.
On top of this you need to be very careful about what you are actually buying and what is needed to make it work. There is a lot of SAN hardware available via auction sites that requires other hardware components, for example specific controllers or switches. That information isn’t always in the auction details so if you don’t do your own due diligence you may find that a ‘bargain’ requires as much again to be spent on it in other hardware before it can be used.
Assuming, therefore, that you don't pay too much and you do get a complete unit, you still need to think about how long you will be able to get spares for and then you need to buy disks. Second-hand hard disks are fine for the home user but never, ever, in a business environment.
Your choice, as with buying new, is whether to pay for enterprise-level drives or risk commodity drives that are not rated for the 24x7x365 environment. The difference in cost can be substantial and needs to be offset against customer reaction when drives fail and arrays have to be rebuilt and the cost of sending engineers to site to maintain the hardware.

Making money
Restoring storage hardware, even if all you are doing is upgrading the hard disks, can be expensive if you are putting in manufacturer approved drives. The additional cost of those drives and lack of long term warranty can make this unprofitable. Perhaps the best all-round use of restoring hardware is to use as loan units for customers while hardware is being replaced or as an interim solution when moving them to a new solution. For example, you may be taking a customer down the path of storage consolidation onto a new storage platform. During that migration, providing them with temporary additional capacity onto which you can take snapshots or move storage while decommissioning old hardware means that there is rental value in this hardware which will help recover your costs.
Before deciding whether to buy, build or restore you need to ensure you have the skills, time and profit margins on what you are selling to make this work. This isn’t just about the cost of the engineers required to keep customer systems running or the spare parts to ensure a reasonable life for the hardware but also the cost to your reputation and customer relationships if there’s a hardware failure.
For hardware on client site, buying new and getting a manufacturer warranty is the easiest solution. Even if the customer is looking to consolidate their storage into a larger solution, buying new has a lot of advantages. However, given the collapse in the second-hand market prices, it may require a larger investment than expected if the customer was banking on recouping some of the purchase price by selling the hardware they’ve replaced.
If you want to use second-hand equipment on a customer site you must ensure that the hardware will continue to be supported by the original manufacturer and that you either stock or have access to a ready supply of parts. Make sure that you draw up a support contract that will cover your costs for maintenance.
The best use of second-hand equipment, however, is in your own back-end services where you can use it to provide additional revenue channels; for example, using storage virtualisation to provide an offsite snapshot or backup solution for customers. Here you can offset the potential additional engineering and maintenance costs by selling space and services.
The same is true if you want to build a solution from scratch. However, this is a solution that only makes sense when you have an experienced engineering group, a set of test tools that can ensure that all the components are capable of working properly and the time and interest in doing this. Given the cost of new hardware, this approach is likely to become increasingly marginalised in terms of profitability.

The Virtual Storage Guy
An excellent blog from NetApp with tools and tips as well as announcements:

DataCore Storage Virtualisation
Datacore’s own blog around storage and contains some really useful and interesting posts:

DataCore blog roll
A comprehensive list of blogs covering real-world implementtaions of storage virtualisation (mostly using DataCore products):

This report puts a clear perspective on the benefits of virtualised storage in a VMware world:


Click here to see the article Types of storage

Click here to see the step by step Setting up SANmelody to create your own storage fabric

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Comments (1)
Sumeet Bansal
Posted: Jun, 22 2010

Princ**al Solutions Architect

Hello Ian, are you by any chance the storageguy on blogs? If yes, I would appreciate it, if you can drop me a line at I am looking for people who may have implemented a SanMelody solution using Fusion-io drives.





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