Why does business storage cost 75 times as much as home storage?

Something we have struggled with this week in our business is explaining to our clients why one terabyte of storage for their server costs $15,000 when we can go down the road and pick up an external hard drive for a few hundred dollars with the same capacity.

We are seeing this sort of split growing in business technology versus home-style technology, as cheap versions of business-grade products flood the market.

Business and enterprise grade products are designed with a number of qualities and features taken into consideration. They are designed to:

• Run 24 hours a day, seven days a week for years at a time.
  
• Be scalable - you can add capacity in incremental units.
  
• Give reliability - drives are tested to run for 100s of 1000s of hours.
  
• Be fault tolerant - a collection of drives continue to run when some parts of the system fail.
  
• Ensure data is available to multiple users simultaneously, with a minimum delay.

In the past all storage was expensive. Over the past 10 years the price of home hard drive storage per gigabyte has dropped from $50 a gigabyte to less than $1 today.

My advice is that you get what you pay for.

• A hard drive from a computer store might only come with a "replacement" warranty, so no guarantee on the data, versus quality drives that may hold a three or five year warranty.
  
• Speed is critical to good data transfer rates so your disks need to spin twice as fast, so connections need to be constructed of higher quality components.
  
• Enterprise storage has management tools, automated monitoring, backup options and high-performance technology like battery-backed memory cache.
  
• You can't easily share, divide or move home storage options.
  
• Power management including redundant power supplies may be available on better systems to ensure continued availability.

In the future our data will be stored not in these primitive spinning devices but somewhere in the cloud, as we already do with our on-line photo albums and so on. It will reach a point with high speed networks and cheap data rates that on-line storage will make more sense than the very power and resource hungry distributed model we have today.

Once on-line retrieval becomes fast enough for business use, there will be no cost benefit to local storage anymore. After all, why would we all want to buy technology that is liable to fail and needs to be upgraded every three to four years when we can just save it to Google or Amazon? The question is how long will it be before our hard drives are dinosaurs?

David Markus is the founder of Melbourne's IT services company Combo. His focus is on big picture thinking to create value in IT systems for the SME sector.