Total Cost of Ownership

I’ve introduced PhotoShelter to a few people only to hear “Why would I want to do that when I can get a 1TB hard drive for $1000?” This sounds like a reasonable argument, but as any homeowner or car owner can tell you, the cost of purchasing something is not the cost of owning it. More significantly, PhotoShelter isn’t just a hard drive, it is an archiving system — part redundant storage, part digital asset management, part automated, online sales tool. So let’s compare apples with apples.

Lacie is a brand that many photographers are familiar with, so we’ll use them as a point of comparison. As a former Lacie owner, I can attest to the quality of their brand. They sell a great looking 1.6TB RAID (1.2TB usable) for $1599. (PhotoShelter uses RAID so we’re quoting it here)

In order to deal with the potential physical threats (e.g. fire, flood, etc) PhotoShelter has RAID systems in each of two locations around the US, so you’d really need to get two Lacie’s. We also have an environmentally controlled datacenter for these RAID systems. Assuming you have two houses with a little room for your RAID, you could get (2) 5500 BTU air conditioners for about $150 each.

To power the RAID (200W each) and the AC units (480W energy star) 24/7/365, would cost you about $2000 at 17 cents per kilowatt hour.

Our data centers come equipped with diesel generators that can power the equipment in the event of a power failure. You could get (2) Honda EU2000i generators for about $1000 a piece. We’ll throw the diesel in for free. Two 450W UPSs (uninterruptible power supplies) with 30 minutes of battery life will run about $260 each.

We have multiple Internet connections from our datacenter, and obviously a massive amount of bandwidth. But let’s assume that you have (2) DSL lines from each location for $40/month. That’s about $1920 annualized. Don’t forget hardware-based firewalls at each location ($206 for a Cisco PIX 501). We’ll pretend that you’re a network security expert, and it took you no time to configure your equipment.

Now in order to see the images sitting on your RAID and make them publicly searchable, you’ll need to either commission someone to build a system for you, or you could build it yourself. I’m assuming that since you’re a photographer, you have better things to do with your time. But let’s say conservatively that you could find a programmer to build you a secure, password protected, fully searchable archive with automated print and online sales in 100 hours for $50/hour. That would be $5,000 (you won’t find anyone to do it so cheaply, btw).

Using the figures above, 1TB of storage would cost you $1183/month. Even with a 3-year depreciation model on the capital expenditures, you’re still paying $546/month. PhotoShelter sells 1TB for $400/month.

Here’s one more pricing comparison for kicks:

  • Apple XServe Single Proc $2999
  • 1TB XServe RAID (750GB usable) $5999
  • Quantum ValueLoader SDLT $5314 (1.6TB capacity, 8 tape autochanger)
  • (2) 10 SLDT Tapes $840 (two sets for off-site rotation, new sets annually)
  • Annual power consumption (assuming 750Wh at $0.17/KWh) $1116.90
  • 1 hour of administration per week at $50 ($2600)
  • Total = $18,868.90 or $1,572/month/TB

    With a 3-year depreciation model on the cap expenditures, you’re still paying $776/month/TB. Once you exceed 1.6TB, you’ll need two sets of DLTs to complete a full back-up, plus the manual labor of swapping out tape trays. And in a few years, what will you do? Continue to build a datacenter in your home?

    You can see where I’m going with this. Sure, if all you want is to copy your images on DVD as back-up, then of course, you don’t have all these costs. PhotoShelter will never compete strictly on price with removable media.

    But we didn’t create PhotoShelter solely as a replacement for your DVDs or hard drives.

    Affordable archiving is certainly a component, but allowing others to view your archive (not just a portfolio on your website) gives you the ability to monetize your past work. This is a huge difference.

    If you purchased 1TB/month for $400, and sold a single image from your archive as stock for $400, it would pay for itself, and you would essentially get the archiving for free.

    Lastly, archiving is a numbers game because every device will eventually fail. So your digital archive system should mitigate risk, not simply create more points of risk. More on that soon…

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  • This article was written by

    Allen Murabayashi is the Chairman and co-founder of PhotoShelter.

    There are 2 comments for this article
    1. Gary George at 3:53 am

      Hi Allen, very interesting to display to the uneducated the TCO for the security and peace of mind, I am guessing though that if someone did sell a photo you would take some commisson? Also your $400 a month for 1TB I guess covers all your costs, but with the capacity of storage doubling in size and halving in cost every 2 or so years, what benefit will that provide to your subscribers? more storage for the same price or less monthly outlay? Since we can now buy Raid 6 systems with 10.5tb usable for around $10000 working out at roughly a $1/gig $400/month seems pretty steep to me even with your nice example or the TCO. Anyway, just a thought, not a dig! Gary

    2. Allen Murabayashi at 10:40 am

      Hey Gary, Since I first made this post 2 years ago, our prices have dropped to $1000/year for 1TB of storage, so we’re still pretty competitively priced. And every once in a while, we have specials to do it for $500/year…. Sign up for free and try out the service. Let us know what you think! Regards, Allen

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