Industry Insights - What is the True Cost of Data Management?

[fa icon="calendar"] Nov 5, 2020 3:01:04 PM / by John Bald


Most of the true costs of data management, depending on an organization's data footprint, remain hidden or buried in other IT budgets without making the connection to data management.

We asked industry experts this question and received some very interesting insights.

Typically, when you pose this question the first thing people talk about is storage costs. It is true that in the last decade, the cost of physical storage of data has decreased significantly. From the cheaper cost of physical disks to the availability of cloud storage, the cost per gigabyte of storage is a lot less than what it used to be. All this is true, and as the generation of data grows exponentially, people take comfort in the fact that they will always have room to store it without incurring any significant costs. One statistic shows that the cost to physically store and manage data is $15 - $20 per Gigabyte per year, so if an organization has terabytes or petabytes of data, this begins to add up. Even so, our findings show us this.

Physical storage is the most insignificant cost associated with data management.

Once we layer on the human factor. It takes people and electricity to make sure that the storage disks are spinning. It takes specialized workers to create databases for organized storage of specific data. It takes networking experts to make the information available across geographical distances. When you get into large enterprise organizations you could find employees whose only job is to monitor network routers and ensure connectivity and make the data available to the end users. Everybody is contributing to the management of the data. Add up the salaries.

And now let us look at the cost of data mismanagement. One of the first problems associated with this abundance of storage space is the existence of ROT (Redundant, Obsolete and Trivial) files. This is the type of data that is clogging up data storage with a negative effect on one of the most important functions that most users do on a day to day basis which is search.

Users search to solve problems, to accomplish tasks, and to “do” something.

If search results return duplicates and outdated documents it will not only take the user longer to find what they are looking for, but they may end up using information that is no longer valid and can have a detrimental effect on the task that they are attempting to accomplish. This is just one of the costs associated with data mismanagement.

Typically, organizations do not know what up to 80% of their data is, or what it contains, and usually don’t care until they have to perform another type of search - eDiscovery. The term eDiscovery is typically related to the finding of information during some sort of litigation or regulatory audits. Organizations need to be able to prove they have the data that they are required to keep and to prove that they have gotten rid of the data that they should no longer possess. With the introduction of legislation like GDPR (General Data Protection Regulation), CCPA (California Consumer Privacy Act) and others, the findability of data has never been more important.


One of our industry experts, David McDermott - past President and Chairman of ARMA International has been involved in many data litigation proceedings. He states that the cost of eDiscovery actions during these legal situations will cost an organization anywhere between $5000 to $20000 per Gigabyte depending on the size of the data set that needs to be searched.

This cost is just to search and find the data that they need for their defense. In the event they cannot find the required data, they may end up still having to pay out financial rewards or very large fines at the end of the proceedings.

To protect themselves from these scary legal and regulatory situations, large organizations will invest in an ECM (Enterprise Content Management) system. Whether they decide to pay up front or go with a SaaS (Software as a Service) model, the cost of these deployments can be in the millions of dollars with limitations on how much data can fit into this bucket. The end result is that the majority of the information will still remain outside of the ECM and unmanaged. A huge spend for something that really didn’t fix the problem or completely protect the organization. 

The cost of storing information is cheap. The cost of mismanaging the information is incredibly expensive. If PHYSICAL storage costs were incredibly expensive, it would force organizations to make sure that every byte that they are storing is relevant, valuable, necessary, and findable.

View the experts bios and videos here


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Topics: Enterprise, Records Management, Dark Data, ROT, Obsolete

John Bald

Written by John Bald

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