As with all things, YMMV, but I have had success moving from VTS/VSM to 
DASD. It was hard to quantify cost savings, because the vendor didn't 
separate out cost of the virtual box (including its DASD) from the cost of the 
robotic library.

Some important factors, in my opinion:

1.  Do you have DASD you can get for "free"?  In my case, I had a DS8100 
with excess capacity so I could set up volumes for TMM (Tape Mount 
Management) without purchasing new DASD. It's not really free, of course, 
but acquisition cost for this project was zero.

2. Understanding the tape data and usage:  I used a combination of MXG and 
IBM's Volume Mount Analyzer, and found out that 80% of the tape datasets 
were 40MB or less, making them 'low hanging fruit'.

3. Having a good working relationship with the application/end-user people 
you're going to affect.  In my case, it was very important with one office 
(because of some ancient history between our two organizations) that I agree 
to be on-call to fix problems with their batch workload if TMM caused 
something to blow up.  After about a month, everything was working smoothly 
enough that we were able to change all the rest of their tape over to TMM.

4. System-determined BLKSIZE:  I was surprised at how many tape DD 
statements did NOT use it. We corrected some even before moving the 
dataset to DASD, just for the perforance impact.

5. SMS compression:  while it can cost some CPU, it can minimize the space 
you need to accomplish the move to DASD.  There's possibly a trade-off point 
somewhere - not yet analyzed - in the small dataset range where there's no 
point compressing the dataset because the decompression time might 
outweigh the I/O time.

6. Hierarchical Storage Management: Good understanding of how you will use 
HSM/ABR to migrate the TMM data to ML2. If you don't want to migrate, then 
plan to buy new DASD regularly as you keep accountant-mandated 20 years 
of detailed transactions around on disk.

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