Utility Computing Pioneers


Want the latest storage insights?

Download the authoritative guide: Enterprise Data Storage 2018: Optimizing Your Storage Infrastructure

Before there was utility computing, there was utility storage, but storage service providers (SSPs) never lived up to all the hype. Many went under, and those that survived had to change their business models. In this, the first of a two-part series, we look at what went wrong with the SSP model, and what lessons it might hold for the new generation of utility computing.

Storage Networks, the company that pioneered the storage utility concept, is out of business. And only a few surviving SSPs still primarily market storage as a utility: Arsenal Digital, BluePoint Data Storage (formerly Storage Access), and Storage Alliance.

One problem with their business model was that customers were hesitant to give up control of their data. And storage vendors responded to the SSP threat with storage that was cheaper and easier to manage.

“You no longer need to be rich or a rocket scientist to install and manage a single, company-wide pool of storage.”

Eric Schott, EqualLogic

Eric Schott, director of product management at EqualLogic, Inc., Nashua, NH, says that customers want on-demand provisioning of storage capacity, but they don't want to relinquish control of their data, making the outsourced storage utility model unattractive.

Customers have spoken, he says: the benefits of SSP services do not outweigh the loss of control and autonomy over their data and operations. "This has created an opportunity for enterprising storage vendors to sell easy-to-use, self-managing storage arrays into the kinds of businesses that may have considered outsourcing," says Schott.

With the advent of lower-cost alternatives to expensive and difficult-to-mange Fibre Channel SANs — including the growing number of iSCSI-based solutions available today — mid-sized companies can afford to create their own scalable storage utility in-house, he continues. "You no longer need to be rich or a rocket scientist to install and manage a single, company-wide pool of storage," says Schott.

Vendors, SSPs Had Competing Interests

Eran Farajun, vice president of business development at Asigra, Inc., Toronto, Canada, thinks that storage vendors viewed Storage Networks and others as just 'big customers,' or distributors of sorts, and didn't change their licensing or pricing models for the SSPs, for the most part. While the SSPs were trying to gain traction, their vendors were busy competing with them for the same customers, trying to convince the customer to buy products directly from the vendor. "So the entire vendor/SSP relationship was skewed from inception, as they both had opposing incentives that we not aligned," says Farajun.

The fundamental service that SSPs were trying to sell — primary disk by the TB — was not something that customers were ready for, and still aren't.

"Look at the traditional outsourcing companies," Farajun says. "They had been doing the management for storage for their enterprise customers for years before SSPs came around and they are still doing it today." But the difference is that the customer 'owns' the technology and the service is sold as part of a wider Service Level Agreement. "At the end, it hasn't affected the vendors at all," he concludes.

As far as storage customers go, Farajun feels they are shy about giving ownership of their primary disk to anyone but themselves or as part of a larger outsourcing contract. However, he says, customers are not shy about letting others take care of their backup/restore problems, only because this is such a problematic issue for customers that they can't ignore it.

Page 2: Profitability and Focus Matter

Submit a Comment


People are discussing this article with 0 comment(s)