Reading, UK, May 11th, 2001 --- How is the data storage market developing and does it make sense to use a specialist supplier just for storage?

A main reason for the growth of data outsourcing services is the fear of losing data. Both SME and corporate companies are asking the question, 'What is a day of productivity worth to our business?' It is this question that is altering the perception of data storage - it is no longer seen as an extravagance, but a necessity that is fuelling the growth in this sector.

Even with daily information backup procedures in place, if a company's IT system crashes before the back-up is taken, the company is faced with a problem. Emails, CRM updates and E-commerce trades - if changes have been made in any of these areas of the business, the changes would be lost - a day of productivity gone. Retrieving the lost data can prove costly and embarrassing and many are realising that 'prevention is better than a cure'.

Time is another driver. Most companies realise how important data back-up is to their core business and many have deployed tape storage facilities, but this can be time consuming and uninviting. There is a dependence on individuals to take manual back-ups, yet this can increase administration costs and is susceptible to the very real possibility of human error - an inescapable risk factor. In addition, the grey costs involved (in terms of time, power and hardware supply) increases alongside company expansion.

Technological development is the enabler for the growth in data outsourcing. Outsourcing has become more popular as companies focus increasingly on their core business and rely on the expertise of external specialists for technical support. This trend to outsource non-core activities provides a company's IT department with a new sense of security, peace of mind and minimised head count.

A recent development in the industry is off-site real-time data backup, which enables companies to restore and archive data as changes are made, rather than using the 'snap shot' method of tape back up. Outsourcing data storage is similar to an insurance policy - the benefits are only experienced once something goes wrong.

Barriers

As with all new industry developments, barriers to entry are inevitable. Many companies are still reluctant to move data off-site due to their perceived risk, although the standard tape back-up procedure for many companies involves just this - the removal of tapes off-site. However, this is still a major issue that every outsourcing company needs to address. Looking at how the data is transported and where it is stored can help.

Private leased line connections are essential to enable real-time, remote data storage. This suggests that, as with numerous industries, the cost of bandwidth may become a barrier to entry with outsourcing data storage services. Until the cost of connectivity in the UK reduces, the SMEs in particular may find it difficult to justify what could be a substantial proportion of their IT budget to data storage.

Other transport methods are available - the Internet, for example, can be used to transport data from one location to another. Although the Internet provides ease of access, it is this accessibility that raises security and quality of service issues. This introduces a requirement for expensive firewalls, encryption and strong authentication.

So how will the market develop?

Justin Hamilton-Martin is the Managing Director for 8el - a company that delivers converged voice and data solutions. He believes that companies will tend to look at their broader communications strategy rather than focus on a single element such as data storage.

"8el is currently launching a remote data storage solution that is built in to a company's core infrastructure. This service is being offered in partnership with Redstor, a data storage outsourcing specialist. The solution integrates services and provides an outsourced communications strategy where 8el takes ownership and responsibility for the running of all communications. We believe that outsourcing with a single point of contact is key."

Convergence has been the buzzword for the last 12 months, but will these converged solutions be viable in these ever-changing industries?

"Compared to tape storage solutions, real-time remote data storage is future-proof, scaleable and easy to justify," says Justin. "Whilst the traditional methods involve capital outlay on hardware and need replacing when a company outgrows the solution, remote data storage is scaleable. Bandwidth can be increased on demand and no capital outlay is required for our solutions. With an integrated approach, the communications strategy develops with the company and this is great news - especially for SMEs who are flexible enough to grow and develop in these times of uncertainty.

The main differentiator with the 8el service is the utilisation of our network. The converged solutions are run over our private network enabling us to remove the traditional cost of bandwidth. Although the cost savings are of course favourable to our customers, we maintain a rigorous customer-centric focus. We take the complication out of communications and provide a simple end user experience."

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