SAN MATEO (04/07/2000) - The popularity of the Internet has caused a proliferation of data. Databases are bursting with information from purchase orders, corporate logs, e-mail messages, and streaming media -- so much so that finding ways to simplify complicated storage architectures and deploy them on demand has become a huge struggle.
Storage vendors such as EMC Corp., Legato Systems Inc., and Veritas Software Corp. are scrambling for group certifications to offer off-the-rack storage systems. But a storage network still requires manpower and physical space to scale as business grows.
Enter Internet storage, or online storage services. By outsourcing storage to a vendor, companies can avoid buying, housing, and managing a high-priced, complex storage architecture. The rising number of online storage companies and their growing client lists hint that online storage is filling a need.
Kneko Burney, director of markets and computing services manager at Cahners In-Stat Group, a research company in Scottsdale, Arizona, feels Internet storage opportunities will be significant for the next several years.
"In the heat of battle, when you're conducting thousands of transactions per day, you need to add storage quickly," Burney said. "And Internet storage offers that right now."
Greg Strakosch, CEO of Dedham, Massachusetts-based TechTarget.com, a company that builds IT portal portfolios and outsources its storage management to StorageNetworks, agrees.
"We're growing so fast, we need something really scalable, and Internet storage is storage on demand," Strakosch said.
Internet storage answers not just the need for expanded storage that can scale quickly, but also the need to provide users with remote access to their data when it would be otherwise impossible.
"We provide a virtual storage portal, giving the customer information about their service from a global information center," explained John Clavin, senior vice president of marketing at StorageNetworks, an Internet storage vendor in Waltham, Massachusetts. "The customer can log in over the Web anywhere in the world and get a snapshot of their storage."
Online storage can give corporate road warriors the freedom to store and access large files without having to store them on their portable computing system.
"We can give salespeople international points of presence, allowing these customers to plug in anywhere, access data over the Internet, and download only what they need," Clavin said.
Other Internet storage vendors, such as StoragePoint, in San Diego, are following this remote application to the fullest.
"There's one product we're working on right now where you'll be able to dial in to our system from your cell phone and have a certain file e-mailed to whomever you wish," said Scott Zimmerman, CEO of StoragePoint. "This is an example of what makes virtual storage the next thing. You'll have browsers everywhere, and at any access point to the Internet, you'll be seconds away from a file you need."
Internet storage is a young market, and pricing structures vary. In some cases, it may not cost less than implementing an internal system, although it can boost productivity.
"We charge about the same as if you did it yourself, but we'll do it better and a lot more dependably," Clavin said. "Skilled technicians are getting harder and harder to find. You want your talent focused on your core direction, and not on your storage problems."
OTG Software, an Internet storage vendor based in Bethesda, Md., offers more standardized pricing.
"We bill per gigabyte," said Richard Kay, CEO of OTG Software. "We have a standard program based on the amount of storage, which costs anywhere from $1,500 to $65,000. We analyze what a customer's needs are and work with them."
OTG Software's average customers, including MSNBC, are businesses that are worth "anywhere from $10 million to a billion dollars," according to Kay.
"But big companies generally don't outsource things for a long time," Cahners' Burney said. "They will wait until they understand it, and then they'll make the investment themselves and bring it in-house, as it doesn't make sense to shell out cash over and over when they can ultimately do it themselves."
At the forefront of the battle for online storage acceptance is the question of security.
"The first question I'd ask is, 'How can they guarantee stability and future access to my data?' " said James Porter, an analyst at Disk Trend, an industry watch group based in Mountain View, California. "Because, this is like taking your money to the bank. If someone opens up a five-foot-wide cubby hole and puts a sign outside that reads 'bank,' would you put money in it?" Porter asked.
But StorageNetworks' Clavin feels the current target market for Internet storage is a bit more savvy.
"The reality is, we don't run in to a lot of these folks," Clavin said. "Most of the customers we talk to have already bought in to the idea [of online storage] and have made a tremendous leap of faith already."
"The one absolute piece of religion we follow is we don't compromise security at all," Clavin said, assuring that, through a blend of encryption and independent storage architectures, security concerns are kept to a minimum.
"All our fibre is private fibre; there's no sharing on the network or on the disk array. Each customer has dedicated architecture for their data."
Still, Disk Trend's Porter warns there are no guarantees.
"What about data still residing with an Internet storage vendor after you leave?" Porter asked. "Because, think about it, when you send down an erase command, it merely deletes the data off the index, it doesn't delete it from the actual tracks of the disk."
None of the Internet storage vendors interviewed offered absolute security or cash guarantees for data loss. But all offer contracts to assure the highest level of data protection and access.
Even skeptics see a place for Internet storage in the e-business market.
"There are a lot of companies out there smaller than the Fortune 1000 guys," Porter said. "And those medium-size companies are certainly the market for Internet storage."
"For now, Internet storage allows you to bring your strategy online fast," Cahners' Burney said. "And that's what e-business is about these days."