Outsourcing is still considered a dirty word among many enterprise corporations, simply due to the amount of trust and risk involved in bringing an outside company into the processes of their own. Although enterprises continue to hesitate when it comes to outsourcing, in some situations it just may be the key their companies needs to round out their businesses.
That rings true especially when talking storage. Dealing with storage can be downright annoying and can put a costly dent in a company’s budget. Companies have begun to look elsewhere in order to handle their skyrocketing demands for storage. This demand has spawned yet another buzzword in the IT community – the SSP. SSPs (storage service providers) act as a utility and specialize in helping businesses deal with their growing storage requirements.
Typically, SSPs will tailor services to meet the specific requirements of your company. Through discussions and evaluations, SSPs will design plans to deliver solutions that are reflective of your business practices, and bill you accordingly.
Analysts agree that there are several valid reasons to hand over storage concerns to an SSP. It is the SSP’s area of expertise; your data will be monitored and managed without your direct involvement; and you will have a system set up that not only saves you time, but cuts large capital investment as well. However, these same analysts also warn about potential risks concerning data integrity, security and the fact that the SSP market, especially in Canada, is still quite young.
So as an enterprise, how do you know if you need an SSP, and what are the risks involved?
According to Ken Ackerley, vice-president of Storage Alliance in Calgary, companies who are experiencing a tremendous amount of growth in storage and who may not have the skills in-house are ideal candidates for an SSP.
“Some of the things we can do for them is we can free up capital,” Ackerley said. “Increasing your storage capacity can be a very capital-intensive exercise.”
Alan Freedman, research manager, servers, workstations and storage for IDC Canada in Toronto, agrees. “The fact that you don’t have to worry about application management and upgrades reduces your capital investment,” Freedman said. “You don’t have to worry about getting the next and latest version. You don’t have to worry about increasing your storage capacity as your storage demands run wild.”
Freedman offered that using an SSP can significantly reduce the need for staff, which can be beneficial by saving the enterprise money, but can also be hazardous.
“It could be all hype and pie-in-the-sky right now,” Freedman said. “I think that by proving that there is a cost benefit…I think that will relieve a lot of customer trepidation.”
The enterprise market in particular has been historically cautious of SSPs, according to John Webster, senior analyst and IT advisor for Illuminata Inc., in Nashua, N.H. He said that the storage utility model is very good at addressing capacity and availability, but is not so good at addressing data integrity.
“If a user decides to cancel a contract with an SSP and take back the data…is that data totally consistent with what was originally stored? How does one know?” Webster said. “Enterprise users have been more cautious for (these) reasons, and much more difficult to penetrate as a result.”
Steve Duplessie, an analyst with the Milford, Mass.-based Enterprise Storage Group, said the SSP market is just beginning to make an appearance in North America, and that there is still a lot of fine tuning occurring within all SSPs.
“I’m still bullish on the sector since the fundamentals of the market haven’t changed,” he said, adding that the fundamentals remain as, “No staff and tons of on-line growth equal ‘I need help.'”
Illuminata’s Webster agrees. “[The SSP market] is in a state of flux characterized by plastic business models.”
What that means, Webster explained, is that SSPs are morphing their models and transforming them to reflect whatever business opportunities they see out there.
The question is, how do you find an SSP whose business models reflect your own?
Todd Chuckry, a Storage Alliance customer and chairman and founder of ReQuest Seismic Surveys Ltd. in Calgary, recommends companies get a detailed understanding of the principles involved in any company you’re dealing with.
“Don’t be shy about outsourcing,” Chuckry said. “My key suggestion is to do research and talk to the people you deal with on a day-to-day basis, whether those be customers or clients, and get feedback from them.”
Chuckry said that when ReQuest Seismic was seeking an SSP, intensive background checks were conducted to ensure that using an SSP was indeed the right route.
“What we found with going with a company like Storage Alliance was a more cost-effective way to store our data,” Chuckry said. “At the same time, you can’t insure our data; the cost to replace it would be far too enormous.”
Chuckry said having an SSP also acts as a safety valve for his company because it provides a duplicate copy of the database. Plus, he said that the number of employees ReQuest would have to maintain in order to uphold the storage of its database would be quite costly on a per-annum basis.
“[SSPs] are experts in that field,” he said. “That’s basically what they do for a living.”
Although Chuckry is content with the services from Storage Alliance, he is still unsure of just how secure his data really is.
“I don’t know if you will ever feel comfortable,” he said. “From where I sit, I feel that my data is being maintained as well as the security around that data set. But if you look on the news, Yahoo and Amazon felt their systems were impenetrable. But at the end of the day, they were penetrated. I think that if anyone in their mind feels that their system cannot be pirated, they are living in a different world than the rest.”
To ensure data integrity, Storage Alliance says it has a solid security model, and provides its customers with a document of the security model.
“The customer has full control of their data,” said Ed Kokts-Porietis, Storage Alliance’s CTO. “If they ever said they wanted to change over to another SSP, in our model, we have no barriers to entry and no barriers to exit for the client.”
Kokts-Porietis said that means the client can simply copy the data over if they want it back. Storage Alliance’s Ackerley said that even from a contractual-obligation standpoint, the contracts state that the ownership of the data belongs to the customer.
Freedman said that though security and data availability are what corporations are wary of, it is also important for companies to consider what kinds of services an SSP offers.
“Is it just storage? Are they doing more value-add? Are they adding more applications? Are they partnering with other vendors? I think that’s critical,” he said. “It’s not something you just jump into. It’s something you really have to investigate and you have to make sure that the contract you sign is very clear and detailed as to what kinds of services are going to be provided.”
Recently, Storage Networks in Framingham, Mass. announced a partnership with Sun Microsystems and Exodus Communications, in which the companies will team their efforts to offer managed storage services that will be delivered and hosted at Exodus data centres.
“The majority of [SSPs] will be working on partner alliances and making sure that if customers need something else, they will be able to provide it,” IDC’s Freedman said. “If they can partner with ASPs or XSPs, as Storage Networks did with Exodus – they are providing storage services alongside the applications services – that is a way to really add value to the customer.”
Adding value and producing a significant return on investment (RoI) should be a top priority of an SSP according to Freedman. He said that there is a difference between just acting as a utility and adding differentiators.
“Utility is something that you have to have to run your business like a PC,” he said. “The differentiators are value-add like the SANs (storage area networks) and specific applications. I think part of the SSP equation is a utility where they can just provide basic services and they can do it at a reasonable price. But, the way they are going to make a significant profit is to provide differentiators.”
The Enterprise Storage Group’s Duplessie said that, in theory, it will cost a company much less to outsource. He added that since most companies are not in the storage business, leaving it to the professionals makes sense. But he does caution interested parties:
“Don’t pick an SSP based on saving $5,000. Pick one who can prove they can do the job. You get what you pay for.”