IBM Piles on Data Storage Service Offerings

IBM continued pushing its IT-on-demand initiative last week, adding hosted storage and storage management to its array of outsourced services that can be delivered over the Web.

IBM may have good reason to aggressively pursue this market. A recently released study by IDC predicts a $US45 billion market for network-delivered services by 2003, with $US8 billion going to storage.

Driving this market are the demands of business-to-business and business-to-consumer e-commerce on corporate IT infrastructures. In many cases, data must flow across several disparate hardware and software platforms. The cost of bolstering and maintaining industrial-strength IT infrastructure has made outsourcing options such as those offered by IBM more attractive to corporate users during the last year or two.

An example of such a company and one of the largest companies of its kind, ChartOne administers and distributes patient health information to approximately 1,400 health care providers. The company was looking for an "ASP [application service provider]-type solution" with low up-front costs, said Ivar Chhina, president and COO of San Rafael, Calif.-based ChartOne.

"These [medical] records take up a lot of space and are hard to manage. We needed a storage partner with good hardware, that would allow us to scale as we needed it and that understood HIPAA [Health Insurance Portability and Accountability] compliance. We thought IBM met a lot of those needs," Chhina said.

Complementing its existing Web-hosting services, the new IBM storage entry gives users the option of delivering storage capacity and management services either to their own site or off-site to any of IBM's 175 data centers around the world. Perhaps the biggest advantage of the service is that it allows users to acquire the capacity they need without having to pay for excess capacity.

"Users can simply think of the model as a pay-as-you-go solution where you get the capacity as you need it. It is a one-to-many relationship scenario, so our utility can be used by many people," said Ginni Rometty, general manager of strategy at IBM's Global Services.

In talking to the company's users, Rometty said that according to current studies, it appears that storage products account for only 4 percent of IT budgets. That figure will jump to almost 20 percent over the next two to three years, Rometty said. And much of that money will go to managing storage rather than to the physical storage itself.

"Physical storage accounts for only 10 percent of IT spending, with 90 percent going to the management of that information," she said.

Rometty noted that the official Olympics site is powered largely by IBM technology, including its on-demand solutions.

"A good example of demand capacity that grows with you is our Olympic site where we already have 4TB of data. Original estimates by the Olympic committee was for 6 billion hits over two weeks. We are already at 8 billion and have had no problems accommodating the added traffic," Rometty said.

Users can get more information about the services at

IBM to rent storage facilities

Big Blue adds to its roster of network-deliverable enterprise services.

* Consulting

* Planning

* Implementation

* CRM (customer relationship management)* Supply-chain managementSource: IBM

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