Cloud Storage Cost Comparisons: How the Price of Cloud Storage Compares to Traditional Storage

Contrary to what you might have heard, cloud storage isn’t cheap. Dedicating a blog post to this topic might seem crazy for a company that provides the leading gateway to cloud storage, but here at Nasuni we’re not the types to avoid discussing what really matters to our customers. And let’s face it, cost is a major issue for most IT departments – especially as data continues to grow at exponential rates.

So, how does the cost of cloud storage compare to traditional storage? There are hidden costs to the cloud, but I’ll refer you back to my previous post on the real cost of a GB in the cloud for those details.

Let’s start instead by looking at the leading cloud storage provider, Amazon. With petabytes of storage in the cloud and billions of objects, Amazon is the 800-pound gorilla of the industry. Amazon also has made great use of economies of scale to offer one of the least expensive cloud storage offerings on the market: Amazon’s current pricing is $0.125/GB/month. So, take the case of a customer that wants to store 5TB within the next 3 years and, for simplicity’s sake, assume they grow that capacity linearly from 0 to 5TB over the 36 months. The total cost over 3 years would be $11,563 or $2.31/GB.

Now let’s look at an entry-level Network Appliance FAS-2020. It’s a bit tricky to get pricing, but with some Googling around, you can find an FAS-2020 6TB unit for $9,004. I have to admit that I don’t know a lot about specifying and configuring a NetApp device, but let’s assume you can configure those six 1TB drives into a 5+1 RAID-5 group. This will give you 5TB of usable space. Given an initial cost of $9,004, that works out to $1.80/GB.

The State of Cloud Storage
It’s predicted that by the year 2020 we will have seen a 4,300% increase in annual data generation. Check out the infographic: Overcoming The Data Deluge
to learn more.

Whoa. What happened? Granted, we have not factored in additional software licenses that may be needed for replication (mentioned later in this article) or annual service and support fees. But could an enterprise NAS device actually be less expensive than cloud storage? Or are we comparing apples to oranges?

Before we try to answer that question let’s look at two leading consumer cloud storage products since the consumers were the first to adopt the cloud. First, Dropbox. As we’ve said before, we love this company. They solve some real pain for consumers. And with a reported 4 million users, they must be doing something right. Dropbox limits your capacity in the “Pro” version to 100GB for $199/year. Using the same 36-month time period, you would pay a total of $597 for the 3 years to store 100GB or $5.97/GB.

Next up, Carbonite Pro, another great service from a good company. They limit your capacity to 500GB. For that amount it costs $250/month, or $9,000 over 36 months. This means you’d be paying a whopping $18/GB for backup only for that 500GB.

And finally, consider the Buffalo TeraStation III, and match it up against the 8TB capacity pricing quoted on at $1,258. Again, I’m not a configuration expert – please add your input in the comments if you are – but let’s assume you can take the 4 2TB disks and make a 3+1 RAID-5 set to end up with 6TB usable. That gives you a cost of $0.21/GB.

So, at first glance it appears that low-end NAS to enterprise NAS ranges from $0.21/GB to $1.80/GB. On the other hand, cloud storage related offerings work out to $2.31/GB for the base capacity and $5+ for real solutions.

Cost of Cloud Storage

Is there really such an enormous premium on cloud storage? Is this all due to hype or is there something more going on behind the scenes?

There is definitely a ton of buzz around cloud storage, but customers are not going to repeatedly pay more than twice the price for anything just because of hype. In each of the local NAS comparisons above we looked at the cost of locally protected storage, but those offerings didn’t include offsite protection. Higher end systems like those from NetApp have replication functionality. So you would need to buy a second NAS and host it at a remote site to get offsite protection. Combine that with NetApp’s excellent snapshot capability and you’d have no need for backup. You’d have an all-in-one primary storage, backup and DR solution.

But it will cost you. To get there, you have to double the $1.80/GB for the NetApp solution, bringing you to $3.60/GB.

Yet this is just the start. Where will you host that second file server? Perhaps you have a second data center at a remote office and you can do bi-directional replication between your sites. So you have space at the second data center already and you just have to manage those two systems and upgrade capacity, replace components, etc. Still, there’s a significant cost for all of that management. And if you don’t have a second location things get a little more complicated.

You’ll need a colocation facility, which means renting a partial rack in someone’s data center. You’ll have to pay to have them install your NAS in their data center (or do it yourself if it’s accessible to you) and then pay their charges for the space, bandwidth, etc. At these colo facilities there’s quite a premium on bandwidth, so you’ll need to be careful with this approach.

Now compare that to Amazon S3. They claim they’re “designed to provide 99.999999999% durability and 99.99% availability of objects over a given year.” This is because they are making multiple copies of your data. They’re copying it to different machines in different facilities. Furthermore, they’re “designed to sustain the concurrent loss of data in two facilities.”

On top of that, they handle all the repairs, recovery and management themselves. You don’t need to be involved. While it does vary greatly with each cloud provider, the level of protection you get with cloud storage most likely far exceeds anything you get if you roll your own storage solution—even with enterprise class NAS. Plus, the clouds do so at a base price that is actually less than rolling out your own solution.

The problem, though, is that cloud storage is a utility like electricity is a utility. You need a device to deliver the service. For cloud storage, each appliance that delivers the service comes in its own form and brings its own functionality at a price premium above the basic utility cost. As you look at the solutions provided by different vendors it’s important to look at all the different problems they solve for you and add up the value. If capacity and data growth are important, then a solution with limited capacity offerings will not work for you. If offsite protection is your chief concern, then you need to focus on that. If backup is important, you need to make sure that the backup solution provided meets your needs. Then you need to examine how various vendors provide that functionality.

Beyond the simple cost of storage the math gets difficult. Consider some of these questions:

  • What would my cost savings be from never having to upgrade my storage capacity again?
  • What would my savings be for avoiding the management of a second site for DR?
  • What is the additional value to me given the increased protection of cloud storage?
  • What additional work can I get done with the time savings from using an integrated solution?
  • What is the value of the peace of mind of not having to worry about bad tape backups?
  • What is the additional value to me of hourly versus daily backups?

With Nasuni, you get enterprise-class storage that never runs out of capacity, delivers hourly offsite backups to one or more cloud storage providers and can be completely recovered from a disaster in less than 15 minutes. Oh, and by the way, we include stellar 24/7 support at no additional cost. For enterprise customers looking at the next generation of storage controllers, cloud-integrated storage brings together the best of both worlds, fast on-premises storage with the unique properties of the cloud. 

For more information about Nasuni or our pricing, please contact us at any time.



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