Identify the categories of on-premises storage capacity

• is the raw storage capacity you purchase.  This is what you pay for and what is needed to calculate the operating costs and data center requirements.
• is the reduced capacity after allocating part of the raw capacity to system's operations (e.g. formatting and operating system, hardware failure protection overhead).
• is the available capacity from the formatted capacity after accounting for data protection services, such as snapshots, and space performance overhead.
• The actual capacity that you need for your data.

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Reference

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