Study: Compliance Bodes Well for Storage Industry


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A research firm specializing in covering the data storage industry says there are definite upsides to all of the red tape and heightened concerns behind accounting and other regulations in the market — about $6 billion worth of upsides.

Milford, Mass.-based Enterprise Storage Group has conducted a study on the impact regulatory compliance has on information management, and has determined that the market to exploit it could be worth as much as $6 billion for compliance-related storage products and services over the next 4 years.

This burgeoning market can be attributed in part to the exposure of corporate fraud that has shaken the core of the financial industry in the last few years. Cases like WorldCom, Enron, and Arthur Andersen come immediately to mind, and while there have been new financial reporting rules aimed at deterring corporate fraud – the Sarbanes-Oxley Act, for example – compliance also extends to the healthcare industry in the form of HIPAA (The Health Insurance Portability and Accountability Act) rules.

Enterprise Storage Group Senior Analyst Peter Gerr says a number of factors entered into the equation that led his research team to come up with the $6 billion figure. But two that stand out are the increasing abundance of information at a time when the digital age is replacing hard copy (or manual information dissemination), and managing the storage of information over the duration for which it must be saved under regulatory compliances, a term known as information lifecycle management.

"There are myriad ways to meet compliance regulations, but a common thread is through technological requirements," Gerr told internetnews.com. "This doesn't apply to just the storage systems guys, but to other IT vendors as well. What's happening is more data is being created, and it needs to be managed. For example, when you consider HIPAA compliance, it calls for patient info to be kept from birth to age 21 — plus two years after their death. That means the hospitals can't throw the information away, and this requires some measure of storage, whether it be disk-based, tape, or optical."

Gerr also says hospitals may choose to move data from disk storage to less costly tape or optical systems, but the fact remains that there needs to be enough storage capacity in place — probably terabytes of date in the case of numerous patient records — to allow this. Still, Gerr estimates that compliant records stored on disks will increase at a compound annual growth rate of 172 percent between 2003 and 2006. In general, the worldwide capacity of compliant records will increase at a compound annual growth rate of 64 percent between 2003 and 2006, according to Gerr.

Page 2: Many Storage Vendors Behind the Curve on Compliance

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