Comments on DSHR's Blog: Update to "Petabyte for a Century"

Assuming a 3.39% average annual inflation rate (pe...

2010-07-25T21:46:59.366-07:00

Assuming a 3.39% average annual inflation rate (per

Inflationdata) and a nominal return of 9% which has been considered the long
term average return (although not this decade) you are looking at an endowment
rate of 5.61% so you are right the estimate of 7% post inflation is a bit high
unless you have some really good professional money managers. Like Jack R.
Meyer, the former manager of Harvard University's $23 billion in assets.

For sure the numbers are too low.

2007-07-30T10:07:00.000-07:00

For sure the numbers are too low.

I refined my economic model. Using a 7% interest r...

2007-07-29T21:15:00.000-07:00

I refined my economic model. Using a 7% interest rate and agreeing with SDSC that overall cost per byte halves every two years, the endowment would need to be about $10M. Assuming that the media cost per byte halves every two years but the rest of the cost per byte remains constant, the endowment would need to be almost $30M. The $43M figure is too high because it incorrectly assumes that the media cost does not decrease.

There is further scope for refinement over the question of whether the model accounts for inflation. A real (post-inflation) return of 7% is unrealistically high. Disk cost per byte does not drop as fast in real terms as it does in nominal terms. I believe that extending the model with inflation will show that both the $10M and $30M numbers above are too low. Stay tuned for more.

According to SDSC, media cost is 36% of total for ...

2007-07-21T07:09:00.000-07:00

According to SDSC, media cost is 36% of total for disk and 20% for tape. The majority of the costs are categorized as "other capital" 15/33%, "maintenance and license" 15/22%, "facilities" 11/5% and "sysadmin labor" 23/20%.

SDSC projects that this breakdown will remain roughly constant. Thus they expect the overall cost per TB per year to reduce with media costs, since the same fixed cost will cover more data with time. I think this is too optimistic, although I agree that the cost per TB per year will decrease over time. This would make my $43M number too high. But the SDSC numbers omit the costs of access and actually doing the backups, which would have the opposite effect.

It is important to note that the SDSC paper is mostly concerned with the methodological issues involved in making these estimates. I'm sure they would agree that these make any actual numbers highly uncertain.

If the media cost is trivial, then where does the ...

2007-07-20T14:06:00.000-07:00

If the media cost is trivial, then where does the money go?