The business case for Iomega Zip and Jaz
Iomega has emerged as the leading supplier of removable storage solutions. Furthermore, Iomega continues to improve its existing product offerings with the introduction of a 2GB Jaz drive and more recently a 250MB version of the venerable Zip drive. In addition, Iomega is in the midst of launching new products, including the Clik! mobile drive for digital cameras, PDAs, and laptops and a CD-RW drive later this year (see News).
In light of these developments, International Data Corp. (IDC) recently conducted a survey and case study analysis of enterprise users of Zip and Jaz drives. IDC defines enterprise users as those in Fortune 1000 companies, government, and educational institutions. In most cases, each site had several thousand users.
The results are outlined in an IDC White Paper, entitled "The Business Proposition for Removable Storage in Enterprise Environments," which focuses solely on Zip and Jaz removable storage solutions.
The survey effort examined both end-user and IT usage patterns, implementation, overall satisfaction, cost savings, and total cost of ownership (TCO). The survey included 100 end users and 100 IT professionals responsible for deploying new equipment and administering help desks. The IT managers were typically responsible for evaluating and procuring equipment, including storage devices, for the organization.
The results should be considered in the context of growing enterprise data storage requirements. As data storage requirements increase, so do end-users` needs for reliable, cost-effective storage solutions. Traditional direct-connect network-based data storage falls short in terms of flexibility and the ability of users to easily and quickly access data in mobile or remote locations.
Enterprise storage demands
Data storage is growing at explosive rates in enterprise environments. Driving the growth is enterprise resource planning systems, multimedia applications, and electronic document storage and distribution.
According to IDC forecasts, total server storage will grow from 205,000 terabytes in 1999 to 1.3 million terabytes by 2002, growing at an 90% CAGR. IDC also predicts that spending for worldwide enterprise server storage during this period will grow to $45.0, up from $32.3 billion in 1999.
Increasingly, IT managers are faced with the protection of distributed, mission-critical data assets. This means that removable storage is directly in the critical path of revenue and profit generation. However, the cost of managing and maintaining user data will continue to grow.
End-user data has typically been categorized as "mission-critical" or "sweat-equity." Usually, mission-critical data is central to the operation of the corporation, department, or workgroup, while sweat-equity data is referred to as end-user data that is not viewed to be critical to the organization.
Today, that distinction is blurring. For every 1GB of data centralized at corporate data centers, IDC believes 2GB is scattered in departments and even more is out on PCs and laptops. IT managers are now faced with the task of protecting and restoring sweat-equity data--data that was once thought to be non-critical. This change in attitude is illustrated in several case studies presented in IDC`s recent White Paper.
Iomega removable storage solutions are a cost-effective, flexible, and easily deployable storage solution for IT departments. IDC has found some trepidation on the part of IT managers to deploy more RAID storage on servers or buying more servers. IDC expects the worldwide market for removable magnetic storage to continue to grow robustly as more mission-critical user data needs to be managed effectively.
IDC believes worldwide removable magnetic storage solutions will top 17.5 million units in 1999, with Iomega dominating the market. Demand will continue to grow solidly, to over 30 million units by 2002.
Variety of uses
When survey respondents were asked what they are using their Iomega drives for, a wide variety of applications were identified beyond basic backup and restore functions. The transport of files and data is the most pervasive use of Zip and Jaz solutions. The majority of Zip and Jaz users (70%) used the drives for transporting data. This is much higher than the 38% who use the drives solely for backup.
What about concerns about associated costs of adding removable storage to a data management infrastructure? IDC`s survey found no evidence that Zip or Jaz drives added to overall PC support costs. In fact, IT support for Zip or Jaz drives was very high due to ease of installation, overall performance, and the use of common software drivers between Zip and Jaz drives.
Shorter PC life cycles (less than 24 months) contribute to higher costs because the organization goes through the costly and disruptive replacement process more frequently. This practice is more expensive in terms of new hardware, staffing resources, training, and user disruption. In addition, upgrades keep PC`s current and able to run the latest system software and applications with lower costs and less disruption to users.
IDC Total Cost of Ownership (TCO) analysis explored the advantages that Iomega`s removable storage solutions provide to reduce the TCO of a PC. The IDC TCO analysis illustrates that users of Iomega Zip extend the life cycle of their PC, thus lowering the TCO in an enterprise.
Our survey results indicate that the majority of desktops with Jaz or Zip drives were installed on average 36 months, similar to the industry average. However, 39.6% of Zip sites extended the life of their PCs for 37 to 48 months and beyond. And of the respondents who felt they can extend PC useful life with a Zip or Jaz drive, 64% believed they can extend the PC useful life more than six months.
In general, IDC found:
Staffing costs within the PC life cycle account for $5,236 per user per year, or 75% of the total cost of a PC.
The remaining 25% can be attributed to hardware and software costs.
These figures are essential in determining the TCO benefit of Zip and Jaz drives. As our analysis illustrates, the savings--from a TCO perspective--is significant for removable drive users who extend the life cycle past 36 months.
For the purpose of the study, IDC evaluated an Iomega Zip drive with three Zip cartridges, with an average cost of $100. IDC evaluated the potential savings of extending the life cycle from 36 to 45 months. Annual hardware, software, and staffing costs totaled $6,358, or $530 monthly per PC for 36 months. By extending the life cycle to 45 months, total costs dropped to $511 per month per PC (or $6,132 annually)--a $19 savings per PC. Contrasted with a monthly cost of $2 ($100 depreciated over 45 months), investing in a Zip drive is a clear win.
High satisfaction ratings
Respondents were asked to rate their satisfaction using Zip and Jaz solutions on a scale of 1 to 5, with 5 representing "very satisfied." The respondents were also asked to rate these separate categories: ease of installation, ease of use, overall performance, and overall value/satisfaction.
In every category, Iomega Zip and Jaz solutions scored 4.4 or above. Iomega Zip and Jaz users rated overall value and satisfaction at 4.6. The IT respondents also rated Zip and Jaz solutions very favorably. In terms of ease of installation, the average satisfaction rating was 4.5 out of 5.0, while a 4.4 was received for overall performance.
Robert Amatruda is a senior analyst, tape and removable storage, at IDC, a market research firm in Framingham, MA.