Storage Services Sprout in Europe

The concept of specialized storage service providers is beginning to catch on in Europe as well as North America, judging by the arrival of a new startup in this field, Paris-based Storage Telecom.

Storage Telecom yesterday announced first-round financing of 19 million euros (US$16.4 million), led by Spectrum Equity Investors (see Euro SAN Startup Scores $14M).

Storage Telecom was founded by Charles Kopff, previously head of Hewlett Packard Co.'s European network and infrastructure consulting business, and Patrick Bayle, previously EMC Corp.'s country manager for France.

The company has partnered with Hewlett Packard and Brocade Communications on the equipment side. It's also partnering with Cable & Wireless, LDCom Networks,and IXEurope for telecom infrastructure and colocation facilities.

It has equipped one data center belonging to each of its telecom partners with HP and Brocade Fibre Channel storage servers and switches and linked these over dark fiber to form a triangle around Paris. The company wouldnt say whose optical switches it’s using for this. Unidentified C&W customers are already buying the service for remote mirroring and backup, according to Bayle. C&W is reselling Storage Telecom's services through a co-branding deal.Storage Telecom's offerings are provisioned as a utility service on a pay-as-you-grow basis. Storage management, backup and recovery, and on-demand storage are provided as bundled services from the company's Internet data centers (IDCs) and telecom partners. "By partnering with the telecoms players, we get around the problem of having to compete with them," says Bayle.

So far, Storage Telecom has 30 employees. It plans to use its funding to expand into other major cities in Europe by the end of the year. The three at the top of the list are London, Frankfurt, and Amsterdam.

Storage Telecom isn’t the first operator offering storage services in Europe. London’s Colt Telecom Group PLC (Nasdaq: COLT; London: CTM.L) is already offering such services over its metro networks, via a partnership with Storage Networks.

Storage Networks is one of a large number of specialized storage service providers (SSPs) that have sprung up in the U.S in the past year or so. Others include

StorageWay Inc., Sanrise Inc., Scale Eight Inc., and WorldStor Inc.

It’s easy to see why there’s so much activity: Analyst are predicting a bonanza. Salomon Smith Barneypredicts the SSP market will exceed $8 billion in 2003 and will account for 25 percent of the market for storage products. IDC predicts the market for storage "utilities" will reach $5.5 billion in 2003.The analysts agree that there is a real business case today for the SSP. Thanks to the internet, the amount of data companies have to store is growing exponentially. But their infrastructure to support this growth isn't. It is hugely expensive to buy and maintain. The operations costs -- for the people to operate, maintain, and upgrade the systems -- are roughly five times the cost of the hardware, according to Bayle.

SSPs propose to solve this problem by allowing companies to scale their storage requirements as needed. Because of their size and scale, they are able to take advantage of the latest storage technologies that are either too expensive or too complex for most companies.

— Jo Maitland, Senior Editor, Byte and Switch
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