Are you ready to outsource your storage?

Computer Technology Review, June, 2003 by Frank Brick

Today's IT environment is a massive vortex of mounting pressures and unpredictable fronts that make managing, protecting and ensuring the availability of corporate data an extremely daunting task. The increasing complexity of storage technologies, the unending surge in data growth and the unprecedented importance of data security and business continuity are but a few of the variables. In the face of this gathering storm, it's no wonder many businesses are choosing to outsource their data storage and storage management. Given the escalating cost of managing storage and the very real resource constraints of today's IT organizations, the return on investment (ROI) for outsourcing is continually increasing, making it a practical business decision.

Here is a look at the forces driving the demand for storage outsourcing, what to expect if you outsource, and how to make smart decisions to make outsourcing work for you.

The Perfect Storm That Hit IT

Businesses are now facing what can be called a "perfect storm" of forces that is afflicting the enterprise storage management landscape.

Explosive growth in enterprise data: Over the last few years, businesses have experienced explosive growth in data--as well as the importance of that data--without any signs of slowing down. International Data Corporation forecasted data growth to increase 90 percent through 2004.

Increasing complexity of storage technologies: Data growth and the need to manage it has spawned a glut of solutions that contribute to the dramatic rise in the complexity and cost associated with provisioning and managing storage environments.

Escalating storage management costs: Gartner Group estimates that the cost of managing storage is five to seven times the cost of purchasing the hardware. More specifically, more than 74 percent of storage costs cover management and administration, with only 12 percent going to hardware and capital expenditures.

Increased importance of data security and business continuity: Following global events that have painfully illustrated the consequence of data for today's businesses, data protection and business continuity have taken center stage in IT planning and boardroom conversations. Despite a general sense of vulnerability to acts of sabotage and disaster, the reality is that most data loss is caused by human error. According to a Wall Street Journal report, human error was the culprit in over 64 percent of all critical data lost.

Constrained IT resources: The downsizing of many IT organizations has caused a shift in the IT resource pool, replacing many storage specialists with generalists. As a result, many companies now rely on their storage hardware and software vendors and systems integrators for routine service and maintenance, further increasing ongoing management costs, and making it nearly impossible to predict or control future storage management costs.

The Market Swells

The market's response to these changing industry dynamics has been a wave of hardware, software and networking innovations--all promising to increase data protection and reduce management complexity. Unfortunately, most IT organizations have difficulties keeping pace with these innovations, let alone being able to afford to implement them.

Not surprisingly, faced with the impossible task of balancing the urgency for improved data protection and business continuity versus the growing complexity of storage solutions, more and more enterprises are considering outsourcing for key storage functions such as backup and restore, storage monitoring and management, primary storage such as NAS and SAN and remote backup and replication for business continuity. Many companies have already moved these storage functions outside the walls of their data centers and into the hands of storage specialists.

The reasons they cite are quite compelling, any one of which would make outsourcing a worthwhile investment:

* Improved operational effectiveness

* Increased data protection and accessibility

* Simplified enterprise storage environments

* More effective IT resources on revenue producing tasks

* Minimized capital expenditures

* Reduced labor costs

* Increased performance and availability

* Reduced risk

The single most important upshot of outsourcing storage: It literally turns storage management on its head. That is, companies choosing to outsource have made a fundamental shift in the way they view storage management. Instead of building out complex heterogeneous storage management systems and a staff to operate them, they simply manage service levels. With outsourcing, enterprises can treat data storage management like a service, rather than a core business function. Consequently, companies outsourcing storage are better able to respond to business changes, report on performance, scale storage at will and reduce costs--all while delivering better data protection and availability than they were able to do internally.

Hard and Soft Cost Savings

Although improved data availability and security are usually the reasons businesses stay with storage outsourcing, cost savings is typically the primary reason businesses initially look to outsource.