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With the jury out on the ASP market, you'd be surprised at the different types of industry which are moving to this centralised model. Software development tools and horizontal office applications, for example, are being marketed as rentable on-line resources. Another industry which is trying to exploit the managed service idea is computer storage. Storage service providers (SSPs) are a relatively new type of company, which aim to make their money by storing customers' valuable data at a remote site and managing the logical and physical infrastructure.
A number of companies have sprung up in the area, including Storage Networks (whose share price has bucked the downward trend in the market), WorldStor, Storage Access and Storagepoint. Other companies claim they are not involved in the SSP market, but are certainly close - for example, UK-based ASP Netstore offers an on-line back-up service, which is a primary part of the services offered by many SSPs.
Two ways for SSPs
SSPs break down into two categories. At the bottom end, some companies offer basic on-line data storage services in the form of a virtual drive which can be accessed from different desktop operating systems. Companies in that area have been around for a while now - examples include Xdrive, iDrive and even some of the major consumer portals such as Yahoo! with its on-line storage 'briefcase' system.
One typical feature of services such as these is the offer of a free on-line account to users with a limited amount of drive space (iDrive offers 50Mb). The on-line storage capacity available to users increases with payment. These systems are generally used for on-line back-up, but also for storing consumer-oriented Internet assets such as MP3 files and downloadable programs.
At the top end of the market are the enterprise-focused SSPs, which are eager to promote quality of service and will attack the market for larger companies wanting to outsource their storage assets.
Both categories have the opportunity to battle for the SME market, consisting of companies which are traditionally unaware of new technologies, or simply disinterested. Such companies may have a storage requirement, but could be unwilling to invest in storage systems such as cheap network attached storage (NAS) devices. Companies in this category would certainly be unlikely to invest in a storage area network (SAN) system.
Scott Zimmerman, chief operations officer at StoragePoint, claims his primary market lies in the SME space, where a defining characteristic is a focus on cost. Significantly, he focuses on file and document sharing, along with secure collaboration between the users accessing them.
"We have had some enquiries about hooking into middle-tier applications," he says, adding that he will take advantage of Microsoft's Web services model in the future. "We are enabling our next generation of products to be fully .NET-compliant."
Nevertheless, the ability to offer simple document storage is a key characteristic of the SME-focused SSP.
Moving into the higher end, SSPs focus on integration with customer applications, including database software. It often involves a detailed audit of the customer's existing storage infrastructure to assess the type of system that needs to be provided, explains Tom Lahive of Storage Networks. Such an audit constitutes the first step in his relationship with a company to help it understand which application or business unit has costs that can be substantially reduced. Storage Networks then provides firms with a managed service covering that particular application. Finally, the company can begin to address other applications and business units. "We can quantify what we can do from a total cost of ownership perspective," he says. "We can show that some companies have return on investment within six months and definitely within 12 months."
Lahive claims there are channel opportunities in this area, but there are some markets the company simply does not want to address directly. He is still preparing his channel strategy and will not reveal details. StoragePoint's Zimmerman, on the other hand, is very jingoistic about the channel, offering his channel partners SSP infrastructure management software focusing specifically on wireless access to documents on-line. Eighty percent of his revenue comes from such software licenses, with just 20 per cent coming from his own SSP service.
Still, in the storage market more than anywhere, issues such as security and service level agreements (SLAs) are of particular concern to customers. Companies will be unlikely to outsource their storage unless they are given specific guarantees about performance and reliability. Proper SLA coverage sorts the men from the boys in the SSP market and it is telling that Zimmerman does not offer an SLA as part of a standard agreement. "That's negotiable," he says defensively. Meanwhile, Lahive offers 99.9 per cent uptime - meaning that Storage Networks customers can face up to 45 minutes of unexpected downtime every month.
As with ASPs, getting performance guarantees out of an SSP isn't always easy. Jim Mannion, vice president for product development and marketing at Storage Access, comes up with the old complaint about not being responsible for the world outside his firewall. The company, which started as a business plan from IBM storage reseller Champion Solutions Group in Florida, provides a set of storage services, including storage capacity provision, back-up services and a data replication function. It has a facility in San Diego which it plans to phase out in the next three months in favour of its facility in Miami, which came on-line in February. It will also bring a second facility on-line in the New York metropolitan area later this year. "When the customer has architectured his own environment, we won't take any responsibility," says Mannion.
Storage Networks provides a monitoring solution in the form of its Virtual Storage Portal, which enables customers to find out how much storage they are using in particular business units and allows them to monitor capacity and performance.
The other customer concern is security, but any good SSP will have its bases covered in that area. Most of them will have to own data centres, or they will rent space in a facilities house that views security as its core competency. One thing potential customers and channel partners should look for is dedicated storage devices that aren't shared between customers. Storage Networks, for example, dedicates separate disk drives and tape drives to each customer, ensuring there is no chance of data being compromised on the same device. It's interesting how few ASPs or Web hosting companies offer this service.
Driving down costs
Companies can connect to SSPs through a variety of different links, in the same way that they connect to ASPs. Leased lines, ISDN and Internet connections are all possible. One exciting future opportunity lies in the area of IP-based SAN connections. Until recently, SAN infrastructures (which is what most SSPs use) used high-speed fast Ethernet, gigabit Ethernet or fibre channel links for their server-to-storage connections and went through a switched high-speed cloud for their storage-to-storage links.
IP-based connections open up new possibilities, according to Bernard Zeutzius, Emea product manager for storage networking at Cisco, which joined the Storage Networking Industry
Association's (SNIA) IP storage working group earlier this year.
"Before SAN over IP, the customer had no choice but to use [something like] fibre channel, which wasn't driving costs down," says Zeutzius, arguing that the new technology will help SSPs reduce the cost of the service to their customers, enabling them to drive down the complexity of connecting from a customer site. "SSPs are keen to work with IP because all the skills are there," he adds.
There are two different technologies supporting SAN over IP, he says. The first, iSCSI, enables the SCSI protocol generally used for high-speed server connections to run over IP. "It means one server with an Ethernet port connected to the IP network will be able to access a remotely connected fibre channel SAN," he says. The second option involves running fibre channel over IP, which will be more appropriate for connecting SAN devices together.
iSCSI is the most important technology from a customer perspective, because it makes it easier to hook into an SSP service from a customer site. Nevertheless, there are challenges, he warns. For one thing, the connection must be transparent to the customer application, which means when working over the Internet, the increased latency between the server and the SSP over a long-distance Internet connection will need to be dealt with - possibly at a source code level. SSPs such as Mannion argue for geographically close connections to avoid this problem.
The SSP market looks set to grow, but in spite of SNIA's efforts in the SAN over IP area, it is unclear how much of it will be provided on a remote basis. Storage Networks, for example, believes 70 per cent of its new bookings will be provided inside the customer firewall. Until SAN over IP becomes a reality and customers are educated about its benefits, most customers will probably approach the SSP market from a facilities management perspective, using third party storage devices and infrastructure management software on their own networks. Either way, it could provide a welcome boost to a storage market that has, like the rest of the technology sector, been a little under the weather of late.
SAN vs NAS
Understandably, many people are confused about the two main types of server-independent storage mechanism available in the market. Network attached storage came about because companies were looking for a way to store information on devices that were not 'owned' by a single server. Previously, a server running a particular operating system and applications would be in charge of storing data on a device directly attached to it, which could make it difficult for people attached to other servers to access it and would also cause problems if the server crashed.
NAS devices attach directly to the network, rather than to the server, so they can be easily accessed by everyone on the network. A good example of a scenario in which NAS makes sense is a digital editing suite, where 10 or 20 different computers access the same sets of files on the same device.
You can find low and high-end versions of NAS devices, but a storage area network is rarely found in low-end, low-cost environments. A SAN system will connect directly to a server using a high-speed link (typically a fibre channel, or at least a 100Mbps Ethernet connection), but it will also connect to other SAN devices across the storage network, typically in a switched environment. The idea is that the SAN devices can exchange storage data between them, making the system more flexible and reliable.
Time to market is a particular concern for many companies exploring the possibilities of managed storage. Tech Target, an on-line information service specialising in search engines and on-line editorial for IT professionals, was a beta tester for the Storage Networks managed storage service. It has been using it for two years since its initial valuation.
The company uses Storage Networks' infrastructure, located at the Exodus facilities house, which also hosts Tech Target's Web servers, making it easier to transfer data between the two. A variety of Tech Target data is stored in the two terabytes of capacity it rents from the SSP, including Web site content, in the form of a repository of companies and information about their product offerings in a buyer's guide, along with white papers and an archive of editorial articles. There is also an index of 1.2m registered members, along with their preference settings.
"We didn't do a formal return on investment analysis because time to market was a key issue," says Tech Target CTO Pat Laughran. "Our situation may have been a different one to an established data centre weighing up its choices."
Nevertheless, the company has made unspecified savings because Laughran has no dedicated staff managing his storage environment, which is particularly important for a company that is just starting out. "The cashflow is a big benefit," he comments.
While the SLA provided 99.9 per cent reliability for the storage service, Laughran explains he was able to make it more customer friendly. He structured the agreement so the SLA runs on a per-month basis, rather than a per-year model. This makes it impossible for the SSP to go down for long periods of time over the course of a year. Surprisingly, a large amount of the data stored by Tech Target on the Storage Networks surface consists of visitor log files. "As a percentage of our overall storage, it's probably around 25 per cent," he says.