HDS eyes market driven by consumers

PHUKET--The emergence of consumers as the new power base will have a significant influence on the enterprise storage business, according to Hitachi Data Systems (HDS) IT head.

In an interview with ZDNet Asia, during the company's Inspire AP CIO Summit 2006 held here Thursday, HDS CTO Hubert Yoshida noted that there is a lot of the personal data being generated online by consumers.

However, Yoshida said, consumers are "not going to be backing up their systems", preferring to rely on service providers such as YouTube and MySpace, to manage and protect their data.

Such user-generated data will be stored at consolidated data centers that will require enterprise class storage facilities, Yoshida explained, adding that this means that "more and more of personal data is becoming part of the enterprise".

He explained: "Enterprise storage is now part of the fabric of our personal storage. Not directly, but indirectly though the service providers.

"As such, these service providers will be a focus of HDS," Yoshida said.

Web 2.0 and storage
In a Web 2.0 environment, social networking sites are giving away free storage to millions of their subscribers and using these storage to retain their customers, he noted.

These service providers are able to support the cost of offering free storage to their subscribers through online advertising.

Additionally, as users have more "personal investment" in these social networking sites, they are more likely to stay with the service provider and refrain from changing providers--unlike a Web 1.0 environment where users do not feel compelled to be loyal, Yoshida said.

Music-discovery engine Pandora, for instance, allows its users to "generate personalized music play lists" and upload the content on the site so their friends can access them. This creates site stickiness where users are "stuck with [the site]", and are unlikely to move on to another site quickly because the users--as well as their friends--have "invested" time on the site, Yoshida said.

According to the CTO, there may also come a time when service providers such as MySpace, will pay users to put content on their sites. "So, storage becomes more than free, it becomes a source of revenue for consumers," Yoshida said.

He predicted that this business model is likely to appear in another year or two.

In addition, on-demand storage services such as Amazon S3, are now available online. Customers only need to pay for what they use, and there is no minimum fee as well as no start-up cost, according to Yoshida. He noted that many small businesses are beginning to use such services.

Lynn Tan of ZDNet Asia reported from Phuket, Thailand.