Room for Rent

What's Bringing In the Dollars for SSPs?

Storage service providers say the majority of dollars they're seeing comes from tape backup and managed storage services, but the jury's still out on storage area networks.

"We're seeing a lot more tape backup than we are [other] storage business because a lot of people feel more comfortable with tape backup" as a managed service, says Scott Emo, director of product and services management at Exodus, a Cable & Wireless service. There's a comfort level with tape backup as a managed service, he says, because "it's boring."

"Tape backup ... is a necessary evil," he adds. "We see a lot of interest in folks wanting us to take that off their hands."

Cable & Wireless can manage a customer's primary disk in addition to tape backup and restore and vaulting services (offsite secure storage). Some companies, particularly those in the financial space, gravitate toward managed storage because they want to be able to access their data quickly, but they don't want to keep all their data onsite, Emo says. However, as the cost of disk farms drops, managed storage services such as storage area networks (SANs) may be a less attractive option for some potential customers.

Of course, views on the prospects for SANs vary. Jane Henn, director of AT&T Storage and Networking Services, says, "Demand for SANs still seems strong as ever and still continues to grow."

People are interested in SANs, she says, but not as many customers have implemented them as had been forecast. She says limited IT spending during this rocky economy and a lack of understanding of the total cost of ownership of SANs are two reasons for slow implementation. Some customers think because the cost of disk arrays is down it might be easier just to drop in a network-attached storage (NAS) box, she says. But NAS just creates islands of storage, whereas SANs offer a pool of storage, creating new efficiencies, she says.

AT&T offers a variety of managed storage services under its AT&T Ultravailable Network umbrella. That includes managed SAN, managed NAS and managed replication/remote mirrored copy (which can be based on SAN or NAS) and Managed Wavelength network offer; all those services can keep data at the customer premises or host data at one of AT&T's Internet data centers. AT&T also offers tape backup and restore utility service, with online and offline backup services for file servers and databases. The majority of AT&T's storage revenue comes from managed disk services, for which AT&T deploys the infrastructure and monitors, manages and upgrades on an ongoing basis, says Henn. But tape backup is a bigger storage business for AT&T in terms of the number of customers, she adds.

Phil Simmonds, senior director of product marketing with managed hosting company Conxion Corp., says his company has a few customers now using SAN, but customers usually want to own their storage arrays, even when they outsource them to a storage service provider.

Still, SAN has been growing over the last year, says Simmonds, whose company is promoting storage through increased sales training efforts. "Even now that would not be the majority of our customers, but there has been interest in more flexible storage for disaster recovery, backup sites, placing storage out-of-state that can be accessed. That's a result of the terrorism and a new focus of what would happen if you couldn't get to your data -- whether it's a gas leak, a fire or anything."

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