New market in corporate cyberspace emerges

New market in corporate cyberspace emerges

Why enterprises are checking out storage-as-a-service.

When Google announced that users of its Gmail services or Picasa web albums could buy extra online storage it sent up a flare about the way data storage might work in the future. The announcement signalled the emergence of what might become the storage-as-a-service market. Google's Gmail and Picasa users have had 2.8 gigabyte and 1 gigabyte of free storage, now they can buy more - starting at $US20 ($23.80) a year for another 6 gigabytes. It's cheap and fuss-free.

The company shies from describing it as a push into the online storage market. With only gigabytes on offer, Google's move is clearly targeted at private consumers and micro businesses, but it prompts the question - when would it make sense for individuals and organisations to offload their storage needs to third parties?

Phil Sargeant, managing vice-president of global storage for analyst company Gartner, says: "Yahoo, Google and other ISPs are providing storage at the gigabyte level and that's useful for people without real performance issues.Where storage is located, what sort of storage is selected, and who manages it are really dependent on the application".

The way the application is managed is also important, according to Bruce McCabe, managing director of S2Intelligence. He believes that acceptance of storage-as-a-service will rise on the coat-tails of increasing demand for software-as-a-service where organisations pay to use, rather than own, software. "I can see a time in 10 years where almost all SME accounting software is hosted - and then storage will be the add on," says McCabe.

Software-as-a-service is proving attractive to small business as it reduces risk, largely because there's no need for capital outlay up front - companies simply pay for software services as they use them. At the same time, the hosted and managed model means there is no need to employ dedicated IT staff to manage the applications. Both of those elements could apply equally to storage-as-a-service.

First companies have to get cosy with the idea of someone else looking after all their data.

"Part of the issue with take-up is a psychological hurdle - you have got to build up trust in your provider when they are hosting your customer data," says McCabe.

There are fewer qualms regarding outsourcing back up and archival, and demand for these services is accelerating says McCabe, thanks to people's growing willingness to send data over the internet. "It's a little like peer-to-peer music - it's just there on the web. The same notion could be applied to storage," he says.

Most of SpectrumData's business comes from providing archival and back-up storage services, says marketing manager Teena Townsend. Having back-up data securely stored offsite represents good information hygiene and if the back-up process is automated, the business can be assured that scheduled back-ups happen without having to remind users. She says that there are signs of a gradual move to outsourcing more transactional data."There is so much more video and audio and the cost of disk is coming down. People feel a bit precious about it, but security is often better at an offsite service.

"SMEs are becoming a lot more aware of data issues and value the added services. We've had projects where we merge, purge and catalogue an entire storage base and identify gaps, then distribute that."

Having a third party provider operate like an internal data manager has its advantages for SMEs where technical staff can be thin on the ground. Having someone else manage the technology trajectory can also be attractive she says. "Storage technology changes constantly and once companies upgrade they may lose the ability to read or access data," she warns. Offloading storage to a third party meant that businesses did not need to worry about such issues. "We hold all types of technology and convert data from any medium and technology to what they are using," says Townsend.

For companies which need to comply with legislation that demands they may have to make very old data accessible many years down the track, having someone else manage that had its benefits, according to Townsend.

Behind storage-as-a-service:

• Individuals and organisations can offload their storage needs to third parties.

• Storage location, type and management depends on the application.

• Having a third party provider operate like an internal data manager has advantages for SMEs with few technical staff.

Australian Financial Review

© Fairfax Business Media

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Tags small businessData storagestorage as a service

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