Suppliers Stack Smorgasbord

Seems there's a storage services explosion: Incentra has snapped up specialist NST for $5.5 million in cash, and Savvis is cranking up its managed storage story. (See Incentra Acquires NST and Savvis Expands Architecture.) All of this can be added to a range of newly-announced consulting services from storage vendors, including Computer Associates, EMC, and OnStor. (See EMC Pushes Service Horizons, ONStor Adds Services, and CA, GlassHouse Team Up.)

Closer inspection hints the explosion may be more of a sparkler than a Roman candle. While demand for all kinds of IT services is rising, questions remain about the cost-effectiveness of managed storage services like those of Incentra and Savvis -- and the feasibility of buying storage consulting from a supplier like EMC.

Certainly, users are wrestling with the financial impact of their firms' data explosions. As well as the costs of adding additional storage to heavily burdened systems, a number of users have cited the strain on their existing IT personnel. (See San Antonio Spurs, University Makes Data Center Move, and Storage Skills Still Lag.) Still, despite bubble-era hopes of a large-scale move to storage services, the reality has been an ongoing "slow but steady" climb in demand, one fueled by smaller players rather than large enterprises.

For large firms, the cost of bandwidth needed to send large volumes of data to a remote provider's site is prohibitive. This has particularly been the case with online backup services. (See Online Backup Services: Weighing Their Worth and Storage Services Surge.) Hence, some sources think managed services are better suited to small companies.

"If you are a startup company, and you need storage, it may be better to go to a managed service provider," says Terry Michaelson, director of technical systems at the Princess Margaret Hospital in Toronto, Ontario.In Michaelson's view, for a larger firm with a well-defined storage infrastructure, a managed storage service could be overkill. "If it's economically feasible, and you have the expertise in-house, you would want to keep the storage in-house because the response times are quicker," he notes.

Michaelson's hospital, which specializes in radiography, is one example. Like many healthcare firms, the hospital is currently planning a major Picture Archiving and Communications System (PACS) for handling digital images, which he thinks rules out managed storage. (See PACS Poses Storage Challenge.)

"We're looking at a 35-Tbyte-per-year increase in our PACS data," explains Michaelson. He believes no managed service could give him the bandwidth he needs.

Managed storage isn't an easy sell for organizations of any size. Kevin Donnellan, enterprise infrastructure services director at the Screen Actors Guild - Producers Pension and Health Plans, which keeps its HP SAN in-house, needs to be shown and not told. He informs Byte and Switch he would want to see some real cost benefits before he makes the leap to managed storage. "If we could find a business partner that would help us save on admin and disaster recovery costs, we would entertain that solution," he says.

Despite cost misgivings, Tom Sweeney, the Incentra CEO, tells Byte and Switch that his firm sees no slowdown in growth. It is now handling some 1,400 Tbytes of data for enterprises dotted around the world. "It's a big market for us," he explains, adding that many firms still lack the resources to manage their storage. "[Users'] storage infrastructure is growing by about 50 percent a year, but nobody is growing their staffing like that. It's becoming clear to enterprise customers, as well as big service providers, that managing data protection systems, particularly large ones, is very difficult to do."Boulder, Colo.-based Incentra will use its NST acquisition to extend the reach of its managed storage offerings into the Midwest. (See Incentra's Strange Brew, Incentra Manages Wireless Firm's Data, and Nickelodeon Archives With Incentra.) NST's workforce of 30, including president Joe Graziano, will move to Incentra as part of the deal, which is just the latest in a string of services-related M&A activity. (See EMC Unveils Grid Gameplan, EMC Buys Windows Expertise, Incentra Acquires STAR, and StorageTek Offers Arsenal.)

There is also evidence that other service providers see managed storage services as a potential opportunity. Last month, Amazon, which is better known for books than bytes, unveiled its S3 hosted storage service. (See Amazon Takes Aim at Hosted Storage.) Entertainment firm FilmmakerLive.com is an early adopter of Amazon's S3 offering.

Savvis's decision to upgrade its own hosted services is also part of the managed services trend, with the telecom giant touting a 650 percent increase in the storage capacity of its Content Delivery Network (CDN). Formerly part of Cable & Wireless, which was bought by Savvis in 2004, CDN is a managed service supporting Web-based applications such as ringtones and streaming media. As for Incentra services, costs are individually negotiated.

In addition to managed services, there's a press among storage suppliers for consulting -- preferably, to go with a vendor's particular product suite. This is the case with CA. The software supplier will team with consulting firm GlassHouse Technologies to provide services for users of CA's BrightStor products in areas such as email archiving, disaster recovery, and data protection.

CA is looking toward customers' confusion over hardware as the opening for its pitch. "Customers traditionally have said, 'We'll just keep throwing storage media at problems for capacity and utilization,'" says Wayne Salpietro, director of marketing for CA's BrightStor product line. "And that got to a point where our customers said there's got to be a better way... We look at how arrays are being used, and how to optimize the use of resources."CA and like-minded EMC may not realize huge sales from their new offerings, if EMC's past experience is any indication. As noted on this site last week, it remains to be seen whether burgeoning data and the growing need for storage help will translate into a spurt in services growth that exceeds the modest levels of years past.

James Rogers, Senior Editor, Byte and Switch

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