Hosted Storage: Offload the Lifting

Updated: April 30, 2009

Hosted storage is back from the dead. Like boy bands and the Clintons, storage service providers (SSPs) were way in for a while in the late 1990s, then, as caution reared its head and the economy soured, they went out so decisively that the idea of outsourcing storage requirements seemed gone for good.

Now, thanks to a new set of economies and more granular service options, hosted storage is back, and companies that wouldn't have considered hosted storage a decade ago are taking a serious look.

Broadly defined, a SSP is any company that provides computer storage space and related management services. This time around, according to a recent report from Forrester Research, most would-be providers are focusing more narrowly on two key areas: secondary storage requirements, like disaster recovery and backup ; and data retention and archiving to satisfy various legal, governmental and industry regulations.

Other companies focus exclusively on helping firms move and store their email traffic--no small job in an era when email, IM and other digital communications are increasingly viewed as both business-critical and disk-hungry applications.

The entry--or re-entry--into the marketplace of companies as diverse as Amerivault, Arsenal Digital, EVault, HP , IBM, Iron Mountain, LiveVault, Managed Storage International, StorageNetworks and Sun Microsystems is strong evidence that the storage service niche is undergoing a serious revival.

Those companies and others are attracting customers who are struggling with ever-increasing data demands, languishing IT budgets, and a corporate mindset focused on regulatory compliance and data protection and recovery in ways that couldn't have been anticipated even a few years ago.

Today's SSPs are meeting that challenge with service agreements that are easier to parse and to pay for, and, in some cases, disaster-recovery services that offer better response rates than what companies could build and maintain in-house. In particular, analysts praised Sun Microsystems' introduction of a fixed-rate price as one way to attract cash-conscious corporations to its storage services.

Other firms emphasize the "service" in SSP--offering, for example, experts who can tell customers what regulatory requirements they're obligated to meet--including HIPAA requirements in the health-services field, SEC rules in the financial and banking fields, and, for any publicly traded company, Sarbanes-Oxley--and then determine how each type of content should be retained to meet those obligations.

Two classes of businesses are expected to be particularly interested in hosted storage services: small and medium-sized businesses (SMBs) and remote offices of larger enterprises.

SMBs often manually back up their systems to tape, disks or hard drives alone, but many are hard-pressed by the costs of hardware, media, maintenance and human capital. Those companies, observers feel, will be well apt to pay a monthly service fee to be able to schedule data backups via the Internet and store data on disks at a provider's datacenter . In addition, such companies are less likely than their larger cousins to have a disaster-recovery system fully implemented, a task with which many SSPs can potentially assist.

The other likely market for hosted storage is enterprises looking to service and protect remote locations. As Forrester notes in its report, protecting remote locations is capital-intensive, labor-intensive and complex. Therefore, even large enterprises that choose to build and maintain their primary storage structures themselves are considering third-parties to help reduce the cost and hassle of protecting remote sites.

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