Cloud Storage: 5 Good Deals And 3 Risky Propositions

Storage-as-a-service vendors are angling for enterprise business. But not all use cases make sense.

Randy George

October 16, 2008

10 Min Read
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If virtualization was last year's hottest water-cooler topic, cloud computing has to be this year's. Vendors are scrambling to adapt their business models and "cloud enable" offerings to take advantage of an increasing willingness by all sizes of IT shops to use hosted services, including for storage. In fact, in a recent InformationWeek cloud computing poll, storage--including archiving and disaster recovery--was cited as the service category most likely to be outsourced to the cloud, ahead even of business applications.

But not all cloud storage offerings are created equal in terms of enterprise-class capabilities. One distinction is between private and public storage clouds.

"People think about cloud storage as Amazon S3, but whether you rent or buy, a cloud is a cloud," says Sajai Krishnan, CEO of cloud storage platform provider ParaScale. Krishnan suggests thinking in terms of private and public, with private cloud storage defined as using commodity hardware whose capacity you can expand on the fly. In contrast, public cloud storage can be thought of as a file system whose back end sits on the public Internet. (Find out more about two startups covering both sides of this model; see story, "Upstart Cloud Providers Challenge Status Quo".)

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There may be little distinction from the perspective of an end user between public and private, but for IT there's a world of difference in terms of startup and ongoing costs, management, bandwidth use, and control.

There's also skepticism centered on the "private cloud" concept. Clearly, vendors are seizing on a hot terminology, but we see opportunity because commodity servers retired by virtualization efforts can be recycled as a clustered network-attached storage system, with the only startup cost being a software licensing fee.

So without further ado, let's jump into the top five ways enterprise IT can take advantage of cloud storage--and three ways you could get burned.

>> Opportunity No. 1: The second "D" in D2D2T. Several factors are contributing to the explosive growth of storage systems that use inexpensive ATA drives, sometimes referred to as Tier 2 storage. Top among them: the mandate to avoid backing up large amounts of data from production systems directly to tape. The standard strategy for tackling that problem is adding a middle storage tier--a disk-to-disk-to-tape, or D2D2T, setup. By replicating production data to the Tier 2 volume and performing backups against that storage pool, you remove the impact of backing up to tape on your servers and the network.



Thin provisioning, data deduplication, and compression are fine, but they're no substitute for storage management.

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That efficiency doesn't come cheap, however--you could be looking at tens or even hundreds of thousands of dollars for hardware and software from a big-name vendor like EMC or Brocade.

Security vendor Blue Coat Systems was looking for inexpensive Tier 2 storage and decided to get creative by using the direct-attached storage available in commodity server hardware as a replacement for an expensive NAS setup. By combining ParaScale Cloud Storage software with Veritas NetBackup, the company built a private cloud and saved big--Blue Coat estimates a NAS system from a top-tier vendor capable of servicing its initial 4-TB need would have cost $20,000 to $25,000. In contrast, it spent just $4,500 to acquire commodity servers with similar storage capabilities. Factor in ParaScale's approximate software licensing cost of $1,000 per terabyte, and Blue Coat saw total capital savings of around $14,500. As storage grows, these savings will multiply. The licensing fee is a one-time outlay, and annual support costs are a bargain compared with what EMC charges for maintenance.

>> Opportunity No. 2: Archiving noncritical data. According to many estimates, and our own experience, about 80% of data that's stored on production file systems never gets touched again. Yet an increase in e-discovery requests and compliance mandates makes it beneficial to be able to lay your hands on files fast, especially in highly regulated sectors. Most shops simply move from production systems to tape what IT considers outdated or nonessential, but after just a few requests to restore from tape, that course doesn't seem so simple.

The answer? Migrate that data into the cloud as a final resting place while allowing for quick online restores. It's a lot less expensive to rent public cloud storage than to buy and maintain drives, and you get rid of expensive tapes and the hassle of managing a rotation system and sending media off-site.

Unlike with D2D2T, a public storage cloud provisioned by a service provider can work well for enterprises. For example, with Nirvanix's virtual CIFS or NFS share, IT can map users to what appears to be storage on a local file server, but it's a virtual volume in cyberspace.

That brings up the main detracting factor when using a public storage cloud: Internet bandwidth. Employees have grown accustomed to the speed of internal Ethernet networks, so unless you can purchase a dedicated circuit to handle the load, be prepared for complaints. And ensure you run your archive job during off hours.

>> Opportunity No. 3: Cloud-based NAS. The same virtual storage technology that Nirvanix offers for archiving may be adapted for use as a production file system for everyday business needs. For smaller organizations or those with a large number of remote employees, subscribing to cloud-based NAS can not only save big bucks from a capital and management perspective, it might be the best solution for sharing data among a distributed workforce. Small and midsize businesses that have the bandwidth to support reasonable upload and download speeds will find cloud NAS provides affordable disaster recovery, management, and a level of fault tolerance comparable to enterprise-class systems.

Nirvanix boasts that customers can save 75% to 90% for storage services when the hard and soft costs of maintaining a network-attached storage system, including hardware, ongoing maintenance and management, and operating costs, are factored in.

Of course, 90% is probably overly optimistic. At Nirvanix's retail price of $256 per terabyte, you'd pay $2,560 per month for 10 TB of public cloud storage. Name-brand NAS hardware would run 10 times that, and you'll need a storage engineer to manage it. Factor in utilities and 20% annual support maintenance for that hardware, and 75% savings aren't out of the question. You will sacrifice LAN speed, however. IT and business managers must make the decision as to whether the trade-off is worthwhile, based on data access frequency.

chart: How likely is it that you will move these general service categories to a cloud environment?

>> Opportunity No. 4: Bulk digitization of aging records. Compliance requirements are driving organizations of all types to digitize records that have been collecting dust for years. The challenge of storing this massive volume of data is particularly acute in the medical industry, where detailed imaging records sometimes require storage in the petabyte range. The cost of purchasing an array from a top-tier storage vendor with a petabyte of capacity will give sticker shock to even the most well-funded IT organization.

Alternatively, private storage clouds, comprising multiple commodity servers, are now a viable option when scalability and low cost are more important than lightning-fast spindle speeds. Sound like an obvious statement? You'd be surprised at how often name-brand vendors seek to sell their Tier 1 product lines for bulk storage when all you really need is the slower SATA.

>> Opportunity No. 5: Client backups into your own cloud. Third-party cloud-based client backup services, such as AmeriVault, that are aimed at consumers and SMBs can be a lifesaver if your CEO wakes up one day to that ominous clicking sound coming from her laptop's hard drive.

But for large companies, multiply the cost to store even 250 MB of client data by 1,000 employees and you're looking at a pretty hefty monthly tab, even accounting for data deduplication and intelligent bit-level differential technologies. Be prepared for a performance hit, and who wants to manage yet another client on each PC?

By using a private storage cloud, IT can write scripts to accomplish the same tasks that third-party backup clients perform, without the overhead. Nirvanix, for example, provides a 1-TB virtual CIFS/NFS share, which could be used as a client backup repository, for $256 per month with a $200-per-month support fee.

Not So Fast ...
While public and private cloud storage can fill some enterprise needs, serious technical drawbacks will drastically limit use in at least three key areas.

>> Rule No. 1: The cloud is no place for highly transactional systems or latency-sensitive data. If you want to break a perfectly functional data-driven application, put the back end in a storage cloud. Typically, multitiered applications enjoy anywhere from 100-Mb to multiple bonded Gigabit Ethernet connections between them for optimal performance.

The prohibitive cost of large amounts of Internet bandwidth is by far the top roadblock to the widespread use of cloud storage for mission-critical apps. You won't find vendors pushing cloud storage for highly transactional back ends, either, unless the entire system is hosted by a service provider.

Similarly, don't put a 10-MB Excel spreadsheet that's shared among several employees into a public storage cloud. Use private clouds for latency-sensitive data that requires LAN speeds.

>> Rule No. 2: Don't move critical data into the cloud until you have a backup plan. Most large public cloud storage providers offer 99.9% uptime service-level agreements; that equates to downtime of a few hours per year. Still, despite that assurance, you don't want to be left without access to critical corporate data in the event of an outage. Amazon S3 was down for almost an entire day in July, leaving a large number of customers twiddling their thumbs.

Time is money, so if you plan to use a public storage cloud as your primary file repository, be sure to replicate data to a location where access can be restored fast. For smaller shops, that fallback might be a $500 external 1-TB drive. For larger organizations, replication might involve a private storage cloud, an inexpensive file server with direct-attached storage, or a second cloud storage vendor.

>> Rule No. 3: Don't use a consumer-grade cloud provider for enterprise needs. Consumer services like Hewlett-Packard's Upline are increasingly being marketed to small enterprises. However, these offerings are still relegated to very simple backup and file sharing--forget about using Upline as a backup target for an enterprise application. Additionally, there's no mention about guaranteed uptime service levels.

If a service will fundamentally change for the worse the way your users access their data--say, by forcing them to use a browser or Web app--steer clear.

Where Does Cloud Storage Fit?

Drive Technology

Suggested Uses

Tier 1

15,000-rpm Fibre Channel

Critical systems, highly transactional databases. Not suitable for cloud storage.

Tier 2

10,000-rpm Fibre Channel; 10,000-rpm SATA; direct-attached SCSI

Less I/O-intensive applications, archiving, general NAS needs. Best suited to private storage cloud.

Tier 3

7,000-rpm SATA; IDE RAID

Infrequently accessed archive data, simple file sharing, client backups. Ideal for public or private storage cloud.

This article, the second in a four-part series, is just one element of a special multimedia package on business innovation. For links to relatedstories and additional editorial content, go to

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