An increase in online data transactions and the strengthening of data compliance rules means the average company’s data mountain is doubling every two years.
The usual DIY approach to clutter is to use smarter filing and build extra storage. In the data universe, this translates into management tools, storage area networks, discs and tapes. But the headache of building and managing storage solutions is becoming too much for some chief information officers, who are turning to IT’s “clutter-busters” to manage the mess.
According to analyst firm Gartner, the growing complexity and scale of the data storage task is increasing the appeal of outsourcing for organisations of all shapes and sizes. The storage service market worldwide is growing at 6% a year and will represent a market of £15.9bn by 2009. Storage management services are growing at an even greater 9%, and a key driver for growth is the appetite for “pay-as-you-go” storage on demand.
The storage services industry has matured to offer many different propositions, from hosted, managed “everything” to back-up, archive and administration services, or “pay-per-gig-per-month” purchases. But although outsourcing choices are plentiful and getting cheaper, they are not a shortcut to working out what storage your business needs and what delivers the best value.
“Regardless of whether you in-source or outsource, the CIO has to figure out what is needed by his customers and how that is best delivered,” says Jason Rabbetts, UK managing director of storage services company Glasshouse. “What we usually find within organisations is that storage is defined as a bunch of technologies, rather than a service.”
Adam Couture, vice-president of storage at Gartner, says it is the discipline to do the sums and put the policies in place that companies seek from outsourcers. “There is nothing an outsourcer can do that a company cannot do for itself,” he says. Whether a firm decides ultimately to keep storage in-house or to outsource, he recommends a good first step is to “simply organise your data storage better”.
Couture cites how Cisco profited from such a clean-up exercise, called “Bytes Back”, a programme that consisted of “incentivising” database administrators to allocate fewer bytes to storage. The networks supplier spent £40,000 on management tools for identifying over-allocation of storage and cash rewards for more accurate apportionment. “Cisco got £1m back,” says Couture.
CIOs who hire outsourcers are encouraged to focus on four aspects of their storage: policies, people, technology, and business alignment. Businesses are mature in their knowledge of technology, but fall down when it comes to policies.
“Most have some policies, but they are not written down or understood,” says Rabbetts. And with business alignment, not many companies have worked out the basic storage metric of how much it costs to store 1Gbyte of data at a particular level of storage criticality, he adds.
This lack of clarity occurs because the sum is more complex than picking a storage medium and divvying up the data across it. The calculation also requires working out the optimum medium for different classes of data and recognising that data shifts between different classes during its lifecycle.
“Being able to show how data moves between these classes and the difference to the bottom line is a pounds and pence proposition,” says Couture.
This is the reason why introducing or improving information lifecycle management is a key stage at which the specialist services of outsourcers are sought. As well as ensuring a company stores data in the most cost-effective medium, specialists can ensure an appropriate level of access and retrieval. A firm can thus avoid common mistakes, such as storing all its e-mails on tape in a safe but dusty vault off site.
“It will be on the back foot when it receives a request from authorities to look at all e-mails between Fred Smith and Joe Bloggs,” says Andy Maurice, head of consultancy with records management provider Iron Mountain.
E-mails need to be stored on spinning discs that provide a retrieval capability, whereas one-off snapshots of data, such as operating systems or database back-ups, can safely be consigned to magnetic media.
Specialists can also advise on what data to store. “Generally, organisations store a lot more information and records than they need to,” says Maurice.
Requirements for keeping data records and access vary greatly between industries and even different parts of an organisation. For example, personnel departments need to retain staff data for two years after they have left their employment, property deeds have to be kept in perpetuity, and pension data needs to be kept until the person dies.
Shifting liability from the CIO to the service provider and reducing risk within the data protection quagmire is another rationale for outsourcing. “Service providers have to attest to their systems and policies meeting compliance requirements in the US,” Couture says.
“One director said of his company’s decision to outsource its e-mail archive: ‘If we’re found to be not compliant, who am I going to sue? Not my CIO’.”
Any confusion in business departments about data protection or compliance rules is compounded by the storage manager’s tendency to be cautious and over-order storage for critical applications. Over-allocation is an understandable but expensive habit that can send costs soaring.
“A database administrator might order 100Gbytes of storage, while the storage administrator does the same,” says Couture. “Before you know it, an organisation has allocated four times more than it needs.”
This is eliminated when an outsourcer steps in because bills suddenly become very transparent. Browser access to a dashboard of tools enables easy checks on how much storage is being used per application, and a comparison with predicted and past usage.
Dashboards also provide an alarm system for identifying a profligate application or department, or even an underlying technical problem.
The advantages of outsourcing are well articulated by third-party providers and users with limited IT resources, but there are attendant risks, particularly for the larger outfit.
Daniel Sazbon, vice-chairman of the Storage Networking Industry Association, says, “Competing standards mean storage is nowhere near the commodity status that suppliers like to portray.”
This leaves any company undergoing a merger and acquisition vulnerable when it comes to integrating storage, with the risk of being locked into an unsuitable outsourcing deal.
Lack of buying power to source the necessary staff and skills may be another reason companies turn to third parties. “Once upon a time, storage management came down to removing a spindle from a disc or removing a back-up tape once a day,” says Ross Macallister, head of IT governance at Atos Consulting.
Today, storage is a broad discipline that encompasses operations and back-up, but also capacity planning, architecture and data protection. Once the decision is taken to outsource storage requirements, it may be the point of no return, warns Sazbon.
However, one storage component that everyone agrees on outsourcing is back-up. Managed back-up service providers are predicting 100% year-over-year growth. “Back-up is the unwanted step-child of IT,” says Couture, and it is the task that is most often allocated to junior personnel.
But it is even more worrying if it is not, says George Grant of the National Housing Federation (see case study), who talks about the amount of senior time expended on the task. Liberating key personnel was a key reason for the federation to outsource back-up.
If back-up is the current comfort zone of outsourcing, storage on demand, for which users pay a fee per gigabyte per month, is the future. Already users are buying storage as a commodity and paying between £1 and £20 a month for a gigabyte.
Price depends not just on volume consumed, but also on correctly forecasting consumption, although usage tends to stabilise over time and makes forecasting easier. Gartner predicts this utility model of storage will account for 70% of managed service providers’ business by 2009.
But whatever storage piece and whichever way they choose to source, it makes a lot of sense for CIOs to get on top of their byte consumption. “Where a lot of CIOs miss a trick is not having an understanding of how data contributes to the business,” says Macallister. “And if you are under pressure to reduce costs and you cannot make that link, life can get very difficult.”
Case study: National Housing Federation
The National Housing Federation represents 1,400 housing associations, and uses and stores vast amounts of data to provide advice and best practice to its members.
Dealing with daily back-up is labour-intensive, says George Grant, head of technology alliances for the NHF, “and it is also one of the most boring tasks”.
For this reason, NHF outsourced the back-up of storage to InTechnology. The NHF is a saving about £8,000 a year, and there are other advantages. “It liberates senior people from doing the most mundane of tasks – that is often the hidden cost of storage,” says Grant. NHF now farms out its archiving too.
The price of the service makes third-party archiving a no-brainer, says Grant. “You are literally paying pennies for a gigabyte of storage because it is hosted on lower-grade discs and tapes.” Retrieval has also been straightforward, he says.
Ensuring access to, as well as secure storage of, data is a key part of any storage strategy. Again, NHF found outsourcing can make this easier as long as you specify the service level agreements correctly. “You do not have to worry about data formats or media – a browser is the simple means to retrieve it.”
InTechnology conducted a storage audit and talked through aspects of compliance and information lifecycle management. It was the impetus for NHF to do some data cleaning. “We had to look at who was dealing with what and tell them to clean out their stuff.”
Grant believes storage on demand is the way forward for all NHF’s needs and anticipates the day when it is used for all storage – not just back-up.