Storage moves into the service industry

With data demands spiralling upwards alongside internet use, Storage vendors are starting to look at storage as a service rather than simply a product.

Although companies such as Arthur Andersen, Computer Sciences, EDS and IBM Global Services have been providing storage services for years, established firms and startups are now setting out to prove that there is a market for managed storage services.

Researcher IDC predicts that the storage service provider market, worth $21bn (£13bn) in 1999, will reach $24bn this year and $40bn in 2003.

Corporate growth appears to be at the root of most IT storage problems. Steven Duplessie, a senior analyst at researcher Enterprise Storage Group, says: "The average Fortune 1000 company's storage requirements will more than double in 2000 and grow even faster in 2001. No one is even making dot com predictions, only that it will be more than anyone estimates.

"If someone can take the burden from me, and provide availability, configuration, and the right way to do it, God love them. Let them deal with it and I can concentrate on my business."

The main players in the market include AT&T, which teamed up with the industry heavyweights Sun Microsystems, Cisco, IBM and Hewlett Packard (HP) to provide faster, easier web access and off-site data storage to companies that rent out software. Some features include boosted caching and server selection technology to accelerate website performance and new enterprise storage systems for internet data centres.

Built for speed
Kathleen Early, president of AT&T Data and Internet Services, said the company is building an "intelligent content distribution" capability into its networks using caching and traffic-direction technology aimed at speeding downloads of web pages and hosted applications.

Broadband internet communications company Qwest Communications said it has signed an agreement with HP to launch a high-end data storage initiative that is expected to provide Qwest with about $200m in revenue in the first year and up to $1.5bn over the three-year agreement.

Last month Dell said it had formed a sales and marketing division targeted at ISPs and web hosting firms. The Internet Partners Division will focus on selling its servers and data storage products to ISPs, web hosting firms and application service providers.

A Dell spokesman said the division will focus on "what we see as up to a $30bn opportunity over the next several years, helping customers build their internet infrastructure".

Dell joins rivals Compaq, IBM and HP in targeting both products and services. Compaq had previously announced its open storage area network (San) and storage-on-demand programmes, which allows customers to lease storage.

Testing times
Compaq said it is in the process of constructing a Storage Networking Technology Centre in Colorado with the Storage Networking Industry Association (SNIA). The facility, which is expected to be completed by late summer, is intended to develop and test open storage networking standards.

Compaq claims SNIA will develop open Sans that support both heterogeneous storage and server environments. This means that they can be managed securely using the same storage area network. Coinciding with the creation of SNIA, the company will launch four Sanworks products by April, which comprise a Data Replicator Manager, Enterprise Volume Manager, Virtual Replicator and Secure Path for Windows. The new business unit will also sell storage management software.

Sun has also begun to make waves in the storage market. Sun president Ed Zander says: "We are living in a world where digital information is the lifeblood of commerce and community. As every person and digital device connects to the internet, it will create enormous demand for our storage products and services. As a premier platform provider for the internet economy, we continue to invest heavily in our storage business."

Sun recently indicated that it would add Jiro support to all its storage systems and management software over the coming year. Jiro, a software integration toolkit, is based on the Java 2 platform, and Sun claims it will eliminate existing interoperability problems between storage hardware, software and network devices.

Newcomers enter the arena
As well as the more established players, some less well known companies also offer services in this area. An storage service provider (SSP) can be thought of in terms of a traditional utility company - the user contracts for services and pays for them on a monthly basis. The few companies that deliver this service do so under service level agreements, which puts the pressure on them to deliver or the user does not pay.

Intira Networks provides outsourced infrastructure services - called netsourcer - to companies with ebusiness initiatives. Intira's system differs from traditional co-location or web hosting companies in that it provides the expertise to manage the network, systems and data for the customer, rather than just providing a fat internet connection.

StorageNetworks is also a SSP and provides storage as a utility-like service for end-user clients who wish to outsource their storage infrastructure.

StorageNetworks' answer to the growing storage problem is to give users several service options, including managed data services and professional services. It calls its services Pacs - for protection, availability, continuity, scalability and security.

There are three varieties of Pacs: SafePacs range from remote site data replication through extended distance San replication and recovery services; DataPacs, which is the primary data on demand service; and BackPacs, which provides services from enterprise backup design, implementation and full management.

However, analyst Duplessie said that if this storage service model is adopted and successful, it would mean storage vendors sold kit in bulk to outsourcers. If StorageNetworks is dealing with 1000 end users, it would decide on the customer's product and technology. "The deal in the decision will have a significant impact on the vendors in this business," he said.

Duplessie, however, believes that the outsourcing model for IT is back for all the right reasons. "This is serious business. Storage is a strategic resource with data being a company's lifeblood and, if outsourcing is done right, it can be a tremendous value to a company. The bottom line is it's much easier to deal with these problems by letting someone else do it."