Data backup is an essential part of any organization’s IT strategy. Having a comprehensive backup solution in place allows you to recover from data loss events quickly and minimize downtime. When evaluating backup solutions, one of the most important factors to consider is cost. In this article, we will examine the various costs associated with backing up data so you can make an informed decision when choosing a backup solution for your needs.
Cost Factors
There are several key factors that contribute to the overall cost of backing up data:
Backup software licensing
Most backup solutions require purchasing licenses for the backup software. This includes both the central management server as well as the backup agents installed on target devices. Popular backup software options include Veeam, Commvault, Veritas NetBackup, and Cohesity. Licenses are typically priced per protected device (virtual machine, physical server, etc). Costs can range from $50 to $500+ per license. Enterprise licensing agreements are available to get volume discounts.
Backup storage
The backup data needs to be stored somewhere. This is often one of the largest ongoing costs for a backup environment. Organizations have several options for backup storage:
- On-premises storage such as SAN/NAS targets
- Purpose-built backup appliances like Data Domain or ExaGrid
- Public cloud object storage like AWS S3 or Azure Blob
- Managed cloud backup services that include storage
On-premises storage requires purchasing disk capacity upfront as well as ongoing costs for hardware maintenance, power and cooling. Cloud backup storage is paid for as you go based on consumption, converting it from a CapEx to OpEx cost. Storage costs are calculated in $/GB/month so multiplying your backup data size by the storage rate gives the monthly cost. Average costs range from around $0.01/GB/month for basic S3 storage up to $0.10/GB/month for enterprise-grade managed backup services.
Network bandwidth
If you are backing up to a public cloud target or remote data center, network bandwidth for the backup transfers can be a significant cost. Bandwidth is typically billed per GB transmitted. Average costs are around $0.01 per GB but can go up to $0.05/GB across less competitive links. This cost must be accounted for in backup solutions that replicate data offsite.
Physical data transport
Some organizations ship physical backup media like tapes or hard drives to an offsite vault for disaster recovery purposes. The costs include tape media, shipping fees and vaulting/handling by the offsite provider. This can cost anywhere from $50 – $150 per month depending on volumes.
Services and support fees
Backup solutions require technical staff to configure, monitor and manage the environment. Larger organizations often have dedicated backup administrators. For smaller IT teams, the backup management workload must be incorporated. Some backup software vendors and service providers include support fees which provide access to technical assistance and software upgrades. Support is usually priced at 15-25% of the base software license fees.
Professional services
Consulting and professional services may be required to properly size, design and implement a backup solution tailored for your environment. Service provider fees often start around $150/hour for basic support up to $300/hour or more for highly complex implementations. Some may offer packaged project fees for standardized deployments.
Cost Estimates
Now that we’ve looked at the major components, we can put together some sample cost estimates for different backup solution configurations:
Small business backup
For a small business with 10 servers and 50 endpoints backing up 500GB of data, a simple standalone backup software setup with local disk storage may cost:
– Backup software licenses for 60 devices @ $50 each = $3,000
– 48TB of local disk storage @ $200/TB = $9,600
– Annual support fees at 20% of license cost = $600
Total startup cost = $13,200
Annual ongoing cost (support + storage) = $10,200
Midsize company with offsite cloud backup
For a midsize company with 100 servers, 500 endpoints, and 5TB of data backing up to an online cloud storage target, costs may be:
– Backup software licenses for 600 devices @ $100 each = $60,000
– Cloud storage for 5TB @ $0.02/GB/month = $1,000/month
– Support fees at 20% of licensing = $12,000/year
– Annual network costs for 5TB @ $.02/GB = $12,000/year
Total startup cost = $72,000
Annual ongoing cost = $36,000
Large enterprise hybrid backup
For a large enterprise with 1,000 servers, 5,000 endpoints, and 100TB of data using a mix of on-prem and cloud backup storage:
– Backup software licensing for 6,000 devices @ $150 each = $900,000
– On-prem primary backup target storing 50TB @ $200/TB = $1,000,000
– Cloud backup storage for 50TB @ $0.03/GB/month = $18,000/month
– Support fees at 20% of licensing = $180,000/year
– Network costs for 50TB @ $0.02/GB = $120,000/year
Total startup cost = $1,900,000
Annual ongoing cost = $516,000
Cost Optimization Tips
There are a number of ways to optimize backup costs:
- Leverage tiered storage – Prioritize critical data on faster primary storage and move older backups to cheaper secondary targets.
- Deduplicate and compress backup data – Reduce storage needs by removing redundancies.
- Limit backup retention – Keep only as much backup history as needed to meet compliance demands.
- Use incremental backups – Only backup changed data instead of full daily backups.
- Consider cheaper storage options – Balance cost vs quality of service.
- Right size licenses – Only pay for the storage capacity and features you need.
- Automate management tasks – Reduce manual efforts needed for oversight.
- Take advantage of cloud economies of scale – Services often cost less than purchasing infrastructure.
Properly sizing your environment and controlling data growth can significantly reduce costs over time. Newer backup technologies also provide better efficiency and cost savings.
The Importance of Budgeting for Backup
While backup is often thought of as an afterthought, organizations should budget appropriately for this critical function. Trying to implement backup on a shoestring budget leads to solutions that are undersized or use inferior technologies. The result is backup failures and unusable data when you need it most.
Having a solid backup solution in place allows you to:
- Recover quickly from ransomware, corruption and other disasters
- Comply with regulatory requirements around data retention and availability
- Access historical point-in-time snapshots for forensic purposes
- Protect your business reputation by avoiding data loss scenarios
Budgeting an appropriate amount for backup capabilities based on your recovery requirements and risk tolerance allows you to maximize uptime and ensure business continuity. The costs of a proper backup solution are small compared to the catastrophic consequences of losing access to your critical information assets.
Conclusion
In summary, the costs of backing up data vary widely based on your environment size, data volumes, SLAs and technology choices. Typical costs range from a few thousand dollars for a small business up to several hundred thousand dollars for a large enterprise. The major cost drivers are backup software licensing, storage, bandwidth and associated services and support. To optimize costs, leverage technologies like deduplication, implement tiered storage, retain less data over time, automate management, and take advantage of cloud economies of scale. Budgeting adequately for backup provides business continuity, compliance and protection against data loss.