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Data Management: Sexy for All the Wrong Reasons

In a cute turn of a phrase that I wished I had come up with, I recently saw a headline articulating a new definition of ROI: Risk of Incarceration. Probably without realizing it, the headline writer exposed a much bigger issue in storage technology with his catchy phraseology.

Return on investment, of course, is a business metric describing the internal rate of return that an investment is expected to yield over a specified period of time. It is a useful tool (though not a definitive one) for comparing several investment opportunities in order to help you select the most sensible one of the group.

IT vendors--especially those in the storage industry--attempted to co-opt the term in their product literature at the end of the dotcom era. It was part of a thinly veiled effort by vendors to distance themselves from the taint of the dot-bombs by couching their product marketing pitch in terms familiar to readers of the Wall Street Journal or Harvard Business Review. Vendors also taught their sales droids to use the term so they could sound more MBA-like when offering storage products to consumers that, in fact, solved no business problems whatsoever.

For a time, you couldn't escape a vendor web site without being offered a white paper or an "easy-to-use calculator" purporting to illuminate the ROI case for the vendor's wares. Of course, when marketing departments get a hold of any truly useful business or technical term, they tend to water it down to the point of meaninglessness. ROI was no exception.

Recouping Original Investment
The storage industry dumbed down the concept, substituting hair-brained variations, the best of which might be better termed "payback analysis." In other words, instead of demonstrating how an investment in XYZ storage array would return 7 percent for 13 months compared to only 5 percent with an array from ABC, vendors claimed that the "unique ROI features" of their products would return the company's capital expenditure within a certain period of time. Their product would, in effect, pay for itself through promised (though unsubstantiated) cost-savings that would accrue to the company once the product was placed into production. In short, vendors were arguing that ROI meant Recouping Original Investment.

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