Setting Big Time?

Managed storage services which began to gain significant

traction in 2006 is likely to hit big time in 2007. Interest in storage service

providers has intensified with the entry of big names in the business and more

so by the decision of many large companies to outsource their storage

management. While it can not still be said that it will emerge as one of the

most sought after managed services by business enterprises, a significant number

of businesses will definitely be attracted to the benefits of subscribing to the

services of a managed storage service provider.

What's Behind the New Coming?



It is a fact that managed storage services and MSSPs have been there for
many years now. However, they were never able to make much dent either in the

storage market or the managed services market. So what has changed now to drive

the growth of managed storage services? Are these services for real? Or is it

merely hype being built around them? While the element of hype cannot be

discounted, things look different and more positive for managed storage services

now because of several key factors.

First, there has been growing acceptance of managed services

among businesses of all sizes leading to an interest among many user

organizations like any other managed services. In other words, many

organizations are now buying or subscribing to managed storage services as part

of broader managed services or IT services. This is because there has been a

major attitude shift in the way organizations now want to manage their storage

or IT infrastructure. For instance, in the past many organizations didn't want

to lose control over data management to an external service provider even when

they were outsourcing other IT tasks. As stated earlier, even though majority of

organizations still prefer to handle their storage on their own, many are

finding managed storage or outsourcing storage management attractive.

Several managed service providers now have it as a key element

of their offering. Many IT services or solution vendors like IBM, HP, Sun, Wipro

Technologies and telecom service providers like Reliance, Tata Teleservices and

Bharti Airtel in India have now become more aggressive in the managed storage

services space. This has surely created more credibility and interest among

prospective customers, especially those who already have some experience in

using other managed services. Moreover, a significant push for managed services

has come from storage vendors also-many of them now either offer managed

storage services on their own or have storage solutions for managed services.

This is quite in contrast to the managed storage services

business during the dotcom boom. The lead was taken mostly by start up pure play

managed service providers who relied on the presumption that business

organizations would prefer stand alone storage service providers for their

storage, back up or disaster recovery needs. However, they were proved wrong as

most businesses didn't find the idea of taking their storage offsite very

appealing. Moreover, most of these start-ups focused on primary storage and

weren't into much value addition. What they actually offered was storage and

not really services unlike the current set of storage service providers who

offer storage plus services.

Growing Complexities



An important factor that is driving managed storage is the hyper speed
growth in data volumes and growing complexity of storage management. The

spiraling volumes of enterprise data and the simultaneous pressure to manage

them more efficiently, and overpowering regulations like Sarbanes-Oxley and

Health Insurance Portability and Accountability Act have put many enterprises at

a crossroad as they don't really know how to handle their storage or manage

regulatory issues and concerns. As storage requirement grows more complex, users

are increasingly looking for simplified management of their storage

infrastructure. Many of them are looking at consistency and standardization in

management of their storage often spread across multiple locations. All this has

been driving many businesses to outsource their storage management to managed

service providers. Many organizations are also driven by security and disaster

management concerns.

Moreover, besides offering the benefit of cost savings on

storage management, managed service providers are also good at scaling up and

helping customers meet growth in their storage requirements with more alacrity.

A managed storage service provider can be less expensive because it mostly

shares the cost of storage infrastructure and manpower with multiple clients.

Moreover, storage service providers often offer their customers multiple pricing

options including a very flexible pay per use model.

Managed service providers now also appear to have a better

understanding of their customers' requirements when they had first started.

Stakeholders in the Game



Unlike in its early days when standalone storage service providers mostly
fueled the hype, the managed services market landscape is currently dominated by

large IT service providers and telcos. Even though there are still several small

standalone managed storage service providers in the business, they mostly

operate on the fringe offering less complex storage services even as the big

vendors offer a comprehensive range of services. An interesting trend that

gained more prominence in 2006 was the growing interest of storage solutions

vendors in the managed services business. Besides offering solutions for storage

service providers, many of these vendors have directly got into services

themselves offering a comprehensive range of managed services. Some of these

vendors have also acquired other storage companies in order to add more range

and depth to their offering.

Despite their many benefits, it may still take some time before

managed storage services become an overwhelming phenomenon and majority of the

companies, especially large ones, will continue to handle their storage on their

own. However, it is definitely expected to gain more traction and acceptability

especially among business organizations that understand and appreciate the value

of outsourcing and managed services.

Ravi Shekhar Pandey



The author is with Springboard Research



maildqindia@cybermedia.co.in