Time to outsource data storage

Storage service providers could be the answer to your all data management prayers

Storage service providers could be the answer to your all data management prayers

The development of the Internet has continued to increase the requirements for on- and offline data storage. Large storage projects involve both large costs and a high level of business risk. The time is ripe to consider the use of outsourced storage provision and management from a new type of online service provider, the storage service provider (SSP).

An SSP is a company that provides computer storage space and management. In addition to the storage itself, SSPs typically offer back-up and archiving, remotely-managed storage, and some also offer the ability to consolidate data from multiple locations to enable effective data sharing. Customers can be billed at a monthly rate and for each managed terabyte of storage.

The SSP market is still relatively small, but IT service organisations such as IBM and other types of service providers are entering the market as they realise it is a crucial part of their overall offering. Telecoms companies are also beginning to offer a type of SSP service.

Storage is a large part of the IT infrastructure, up to 50% of total IT hardware spend. Devices and technologies have their own life cycles and obsolescence. As corporate IT becomes more distributed, with mobile devices, laptops, home working and collaboration becoming commonplace, data storage and back-up has to evolve. Business needs are changing fast and storage has to adapt to meet them. All this requires a structured process just as much as other aspects of IT.

Fears about handing over a vital business asset to a third party have held back storage outsourcing in many enterprises, except where it is part of outsourcing the entire IT operation. However, critical appraisal shows that the overall quality of service given by an SSP often exceeds that from an internal department. The main advantages are the economies of scale and specialist expertise that an external organisation brings. Storage networks are complex entities to build and operate, and few small or medium-sized organisations have the in-house skills needed.

Many organisations that would benefit from using a storage service are unaware of the fact because they are not accurately accounting for storage costs. Traditional storage has been regarded as an integral part of the computing infrastructure and its capital and operating costs have not been separated from those of the application servers. In our research, 77% of organisations expect their general IT staff to handle storage matters.

While most organisations use an outsourced service as part of their disaster recovery strategy, only a small proportion of them outsource frontline storage. You can choose different service providers for these two roles, but there is an advantage in gaining the synergy that comes from using a single provider.

Service level agreements (SLAs) should be a key consideration in choosing a provider. If storage is outsourced you must have confidence in the financial stability of the supplier, and the SLA must be mutually acceptable. The service provider must prove that it is capable of delivering the agreed level of service.

SLAs are key to establishing trust and accountability in this emerging market. It is disappointing that the industry is not yet offering the sort of SLA that promises to protect customers' data and provide full compensation in the event of failure. While you should push for promises in the core areas of the service, you have to be prepared to accept what is on offer. In the present state of the business the existence of the SLA is more important than its precise provisions. A relatively good SLA shows that the service provider cares about what it is delivering and that it has some confidence in its ability to do so. Some users rarely invoke SLAs, feeling that negotiation is more fruitful than confrontation.

Current practice is to limit the SLA to covering the delivery of the service, specifying the proportion of time when the service is live and the response times for customer enquiries. Compensation is usually small, and mainly paid in the form of free service periods, rather than cash. Consequential business risks are never included.

In future service providers must recognise their customers' dependence on their services and provide guarantees, including insurance for business risk. SLAs should cover:

  • Good performance

  • Very high availability

  • Data security

  • Corrective action when a failure occurs

  • Meaningful compensation when business loss is incurred.

Only then will storage outsourcing represent a mature business proposition.

Katy Ring is director of e-business research, Ovum

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