Storage: when to outsource (Part I)

As storage volumes escalate, companies need to weigh up the risks and benefits of outsourcing their storage.


As a small- to medium-business or a large business with a small IT group, having someone dedicated to storage and training them to a high level -- perhaps to mission critical level -- might be a challenge. The benefit of moving that risk away from your staff to an external company might seem appealing.

Because of concerns about control, security, and trust, it has become popular to either:

  • Outsource your servers, applications and storage in one go.
  • Host the storage infrastructure within your own company and hire an outsourcer to come in and manage it or;
  • Outsource secondary data storage for disaster recovery purposes.

A lot of companies are interested in outsourcing storage, but not necessarily in the conventional sense of going to a big company such as IBM or EDS, says Sal Fernando, chief technical architect at storage software company Veritas. Veritas works with major telcos to deliver managed storage solutions, as well as IP-based storage with its partner Cisco.

"IBM is talking about e-business on demand, Telstra is talking about storage on demand, but the key benefit customers are looking for is the consolidation of available storage, servers, and CPUs to provide cost benefits. IT departments are looking to make the most of shared infrastructure and IT managers who are not normally bent towards outsourcing want to build storage systems which are managed, if not entirely outsourced," says Fernando.

Overall, says Fernando, managers do want to separate management and services from storage infrastructure, or "the brown spinning stuff" as Fernando puts it. "One thing for sure is that everyone is looking for shared storage, to take it off a local machine and consolidate it," he says. But handing over any element of the storage process to a third party has always been a thorny issue.

According to Chris Foote, EDS' Asia-Pacific portfolio executive of intelligent storage, there are four benefits to outsourcing storage: price and the benefits of scale; availability and efficiency; consolidation of the distributed environment; and security requirements and savings on the cost of training your administrative staff.

EMC's managing director Steve Redman says there are two main types of outsourced storage -- the big outsourced EDS-type contracts for customers who outsource across the entire infrastructure, including storage and storage management -- and selective sourcing. "We run the storage management under big name outsourcing partners," explains Redman. "For example, in the U.S., General Motors has outsourced its IT to IBM Global Services and within that agreement EMC handles the storage management. Prior to this IBM would do it all, but would have to hire skilled staff," he says.

Alternatively, says Redman, companies just outsource a hosted storage service, like the one that EMC runs with its partner Telstra. "This option is accessible not just to the top 20 accounts but the whole Australian market. Our clients include Qantas and others in the mid-tier corporate Australia," he adds. The main benefits of outsourcing just the hosting is that you don't have to buy the infrastructure or get into long contracts. "If you outsource storage for the short to medium term, and it grows very fast or becomes nothing, it doesn't matter because you don't have the five-year contract and equipment," says Redman.

Jock Crossing, manager of sales support at Fujitsu Services agrees that a key benefit of outsourcing storage is flexibility. In other words, the "removal of assets from the customer's books and the ability to increase or decrease the amount of storage and adjust the price accordingly."

Who, what, where
EDS's Foote says that sectors which are most keen to outsource their storage in Australia include manufacturing and government. "Advances in technology, increased complexity, and the scale of storage requirements means that increasingly companies are looking to an outsourcer," says Foote.

Brent Paddon, general manager of WebCentral Complex, the managed services subsidiary of hosting company WebCentral, says he is seeing demand from medium-sized enterprises -- those with storage requirements growing beyond direct attached storage (DAS), but not enough to justify the investment in their own storage attached network (SAN). "We are also seeing some large organisations outsourcing their disaster recovery storage -- they own their own SAN, but replicate that data offsite to a managed storage provider (MSP)," he says.

Ross Martin, IBM business management executive for strategic outsourcing business agrees that the market for outsourcing direct attached storage is fairly mature, whereas the market for network attached storage (NAS) and SAN outsourcing is fairly new. "The DAS segment does not differentiate as much between the server, network, and storage," says Martin. Previously customers had a direct requirement for storage linked to a server, but now customers are asking if they need to invest in their own storage infrastructure when suppliers can provide that data storage on demand. Martin claims that a variety of customers are taking up IBM's services, from the financial and public sector, and that it's starting to move "from the large end of town to smaller organisations".

"The customer can be ensured that there is a level of security and privacy," says Martin, who believes that fears about security and privacy are on the whole unfounded. "Physical security is less of an issue, it's more the perceptual issue of asking 'am I going to lose control and who is going to be looking at my data?' that the customer needs to consider. You have to comfortable with your provider and the resilience and availability of your data."

A fully outsourced customer will typically be more interested in a SAN solution as this has integrity, security, and performance benefits over NAS, says Fujitsu's Crossing. "Outsourced SAN storage would generally be located in a single site. NAS is also a legitimate form of outsourced storage but is less applicable to the types of customers serviced by Fujitsu. NAS has a niche market in workgroup or simple hosting environments and can be used over greater distances."

As part of its outsourcing focus, Fujitsu Australia manages a range of internal and RAID storage devices for its customers. These units can either be owned by the customer or by Fujitsu. "Either way, the customer benefits as a result of common storage and backup management practices being implemented across those storage environments," says Crossing. Fujitsu also offers a "storage on demand" facility whereby customers can rent managed space on a fully shared RAID SAN environment owned and managed by Fujitsu.

"The advantage of the latter offering is that the amount of storage being used, and paid for, by the customer is much more flexible and able to be matched, at short notice, with changing storage requirements," says Crossing. "Managed storage is generally the domain of larger outsourcing organisations such as Fujitsu. Over recent years, this service has also been picked up by several of the telcos who are now entering this market space," he says.

Dimension Data solution architect Chris Terry agrees that storage service providers have been focusing on SAN rather than NAS storage. "It is generally telcos who are providing outsourced storage, because they have the access to dark fibre running through the CBDs, so it's a logical offering. I couldn't name any company which has proposed offering a NAS outsourced environment," he says.

This article was first published in Technology & Business magazine, a ZDNet Australia publication. Watch out for part II of the story tomorrow.