Dealing with Data – The Outsourcing Method

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Demand for data storage is exploding at a dizzying pace: both the amount of data itself and the relative importance of that data is growing exponentially. Thanks to the paperless office, eCommerce, corporate and customer databases, email archives, digital images, video applications and more, storage requirements for a typical company are expected to grow at least 40% each year for the next four to five years, and data-intensive enterprises will see demand more than double each year.

New technologies and applications such as supply chain management, ERP and CRM that offer double-digit returns of efficiency require accurate real-time data to deliver the savings they promised. As data becomes more important, any downtime or corruption can translate into losses in revenues, profit margins and, most importantly, customers. An hour of downtime can run anywhere from $28,000 for a package shipping company to $2.6 million for a credit card sales authorization company.

In addition, long term retention requirements, both internal (as digital information replaces the paper files) and those mandated by agencies such as the FDA, FAA, and SEC, place an even greater emphasis on importance of effective management of the stored data.

IT managers have a host of options available to them to organize this mountain of information so the rest of the company can use it to its full advantage. Despite declining storage hardware prices, increasing software costs and management overhead have caused the bottom line cost of current storage solutions to grow exponentially. In today’s enterprise, storage management can comprise as much as 25% of the IT budget.

While the only option used to be buying more and more servers, over the past two years several companies such as Storage Networks have begun to offer Storage Area Networks (SANs), Network Attached Storage (NAS), and IP Storage to address companies’ requirements for flexible and cost effective primary disk space.

Until this year, little had changed in the equally critical area of data protection from the traditional model of the IT manager making a tape copy every night and putting it in the safe. Things have changed over the past nine months, and it’s where I’d like to draw your attention.Today, to mitigate the risks of data loss or downtime, companies are deploying more and more sophisticated backup storage, disaster recovery and data replication systems. Independent backup systems are connected to corporate networks and high-powered software allows corporate users to back up automatically and restore systems in near real-time. While these systems do protect against potentially crippling data loss, they require significant investment in hardware, integration, maintenance, dedicated bandwidth, and, of course, the trained staff to manage it all. These requirements can quickly translate into a black hole of capital expenditures for the enterprise.

The Outsourced Solution:

The recent arrival of Storage Service Providers (SSPs), has provided an alternative strategy for enterprises interested in reducing their data protection costs. The SSP market is segmented in two groups: those focused on providing solutions to customers co-located inside data centers and those providing solutions to the traditional enterprise whose data is stored on their own premises. The solutions available in colo facilities are well known: because the company’s server is in the same physical building as the SSP’s equipment, all that needs to be done is connect the two machines with a fibre channel connection, and power up the software.

The prospect is more complex for those outside the data center because fibre channel technology has physical limitations. IT managers inside traditional organizations, where 95% of the world’s data still resides, have long wished for the same options as their colo-bound cousins, but it wasn’t until high capacity IP connectivity became widely available did serving this market become economically feasible.

Partnering with next generation providers such as Telseon, Cogent and Terabeam, it is now possible for organizations of any size to outsource at least part of their storage solution using new IP-based services. For data protection services, IP is the best way to go because network managers are already familiar with Ethernet issues- there’s no learning curve, no migration issues, and no compatibility problems.

Given that few responsible managers would want to cede control of their primary disk space without some testing of the waters, the service to consider outsourcing is the nightly backing-up of corporate data. This is a very easy transition to make, and should show a positive ROI from the first month of service. It is also a critical function of business that most IT departments have little expertise in (because it’s always passed on to the lowest guy on the totem pole) and which CIO’s find to be an unrewarding tax on their resources.

With the advent of high capacity IP services from Next Generation carriers, a customer can backup its data over its IP connection to a remote location at regular intervals. The customer can secure online backup storage on a per-gigabyte basis for a fixed per-unit price, adding additional capacity as needed. Depending upon the amount of data to be transferred, the backup could be performed over an existing Internet connection or the company could step up to a higher capacity pipe. Even with connectivity costs included, at $12-30 per gigabyte per month, outsourcing backup provides potential savings of 25% to 40% over a fully costed in-house solution.

The benefits of outsourcing backup are both obvious and immediate:

  • Savings of 25% – 40%
  • No capital expenditures to realize the benefits of a world class solution that is always up to date.
  • Pay-per-gig pricing for zero excess capacity and infinite flexibility.
  • Data is stored off-site- a best practice of disaster recovery policy.
  • Automated to reduce burden on IT staff and minimize chance of mistake.
  • Free-up real estate in on-site server room.

Data is your company’s most valuable asset. Taking advantage of new outsourced backup services makes sense from both a data protection perspective and from the bottom line. It’s time to discuss your options and remove the thorn in your side.

About StorageLink:
StorageLink is dedicated to providing secure, reliable remote backup and disaster recovery services for companies of any size using IP-based storage technology to reduce IT costs and minimize disruption to business operations. For more information on StorageLink solutions visit

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