Survey Shows More Evidence of Trend Toward Online Storage

There’s new evidence that businesses are trending toward enlisting online services help to manage the overwhelming data storage/access crunch that’s becoming more and more apparent in IT shops.

Research revealed Feb. 14 by the Computing Technology Industry Association (CompTIA) indicates that buyers of managed IT services will be spending most of their capital dollars on security, storage and disaster recovery products and services in 2007.

Click here to read more about an analysis of IT spending in 2007.

One-third of the 322 organizations surveyed—all current users of managed IT services, such as Web hosting and subscription applications—said they plan to invest or upgrade spending in storage, backup and disaster recovery services, a CompTIA spokesperson said.

The same percentage of organizations, 33 percent, said they plan to invest or upgrade their spending in managed security services in 2007, the spokesperson said.

Other managed services’ spending priorities for 2007 include Web or e-mail hosting, cited by 27 percent of the surveyed companies; network monitoring and administration, 25 percent; and software-as-a-service and application subscriptions, 20 percent.

Key Driver: U.S. Court Rules

Key drivers of this trend are new federal court rules, adopted by the U.S. Supreme Court last April and enacted nationally on Dec. 1, that require businesses to store—and to be able to quickly find—all pertinent electronic documents relating to a case in litigation.

That means that every electronic document stored by businesses—e-mail, instant messages, financials, voice mail and all text and graphical documents—must be easily retrievable. The result is that businesses suddenly are in need of professional assistance in complying with these new rules.

One prominent example of this budding trend is the National Football League’s Baltimore Ravens, who last October turned their entire data storage and recovery system over to AmeriVault, an online storage and security provider in Waltham, Mass. The Ravens scrapped their in-house storage servers and now simply pay a monthly fee for the service based on the number of gigabytes being stored.

When asked why they’re choosing to invest in managed IT services, 40 percent of the organizations reported that they do not have the in-house skills to manage certain IT services.

Another 30 percent said it is less expensive for them to have an outside party manage certain IT services than if the work was done in-house, while 21 percent said they chose the managed services model because it allows them to focus on their core competency.

The managed services users surveyed ranged from small businesses (1-20 employees; annual revenues of less than $5 million) to large enterprises (1,000 or more employees; $250 million or more in annual revenue) and covered a broad cross-section of industries. The mean amount spent by the companies on managed services in the past year was $243,855.

EMC Also Recognizes Online Trend

Joe Tucci, president, CEO and chairman of EMC, the world’s largest data storage company, said his company will be moving into the online storage service business this year. Other companies, such as Hewlett-Packard, Comcast, AT&T, Verizon, CommVault and a number of startups, also are in the online vaulting business.

In online vaulting, archived copies of data are kept in a service provider’s own storage servers instead of in-house.

“I disagree with [online outsourcing] as a trend,” Tucci told reporters and analysts at the recent RSA Security Conference 2007. “I don’t think that’s the case right now. It is very difficult—and mostly unwise—to separate your servers and your data, especially for large enterprises.”

However, Tucci said, it’s a good thing to keep a backup copy of your data archived off-site or online with a trusted partner or service.

“For companies that have to keep e-mail for seven years, data vaulting for backup is good,” he said. “Comcast, AT&T and Verizon will store rich media for you online … but there is no market for [large corporations storing everything online]; it’s not going to happen. The paradigm isn’t even a little bit feasible.”

However, that’s when Tucci said, “You will see EMC playing [in the online arena] this year.”

CompTIA, headquartered in Oakbrook Terrace, Ill., will hold a Managed Services Summit May 1-3 in San Diego. The association represents the business interests of more than 20,000 member companies in more than 100 countries worldwide.

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