Storage service providers branch out

One of the few surviving storage service providers officially added software vendor to its shingle last week with the announcement of a management product it hopes will improve sagging revenue.

StorageNetworks Inc. will market its STORos StorageManager software, which lets administrators manage, monitor, back up and restore direct- and networkattached storage (DAS/NAS), and Fibre Channel-based storage-area networks. STORos StorageManager is based on software the company used to manage customer storage hosted at its storage points-of-presence. Customers also could monitor and control data stored at these facilities using the software.

Analysts say that experience is the reason users would buy software from service providers such as StorageNetworks, Storability Inc., CreekPath Systems Inc. and Scale Eight Inc., even though the market is flush with storage management packages.

“They’ve been there, they’ve been doing this, they actually have customers who have used their products,” says Arun Taneja, senior analyst for the Enterprise Storage Group Inc. “All they are doing is making that software available to the external market rather than just using it to provide service from.”

However, there is concern that the storage management market “will not be able to absorb so many companies,” Taneja says. “We are going to see consolidation, acquisition and fall-out.”

StorageNetworks – much like Storability, CreekPath, ManagedStorage and Scale Eight before it – is scrambling to recover from the downturn caused when their service provider and dot-com customers failed. These customers relied on outsourced storage because their businesses were growing so fast.

Analysts say that of any strategy, transitioning to a software vendor from an SSP is the most prudent. They say that three companies – StorageNetworks, CreekPath and Storability – might have a better chance of survival.

“We have yet to see any former SSP make it as a software company, although having $280 million in the bank gives StorageNetworks an advantage over all would-be competitors,” says Steve Duplessie, senior analyst at Enterprise Storage Group.

Analysts attribute the failure of SSPs such as StorageProvider, Centripetal and Global Storage to visions that were too broad or a lack of venture capital.

“The SSP market only worked in small, targeted application areas like backup,” Duplessie says. “Having too broad a focus, too big a capital structure [combined with] the unwillingness of enterprise customers to let the crown jewels go off-site meant the demise of most of these companies.”

The software from these service providers turned software vendors has appealed to certain users.

“We reviewed 17 other vendors in the SSP space before choosing to work with StorageNetworks over a year ago as a managed services customer,” says Paul Koenig, storage architect at Ford Motor in Dearborn, Mich., who manages more than 300 terabytes of open systems storage and 1,000 host computers. “The software lets us centrally manage Ford’s storage infrastructure, including the ability to quickly pinpoint underutilized assets and rapidly resolve events.”

StorageNetwork’s StorageManager v5.0 allows policy-based management, charge-back functionality and the ability to manage and monitor DAS arrays. The software manages arrays from EMC, Hewlett-Packard, Hitachi and Sun, and storage devices from Brocade Communications, McData and Network Appliance.