Professional services giant Electronic Data Systems will enter the storage service provider (SSP) market, a move that analysts and users say will establish the concept of outsourcing storage for e-commerce and traditional enterprise network companies looking to get a handle on their rapidly increasing storage needs.
The company this week said it will create three storage outsourcing services that will use a full range of EMC hardware and software products, including the recently acquired Data General Clarion arrays, and a set of consulting services, which the company has honed from its existing Web-hosting business.
The first and largest of its services focuses on the quickly emerging storage and back-up needs of dot-com companies and network enterprises that are unable to employ already scarce IT staff. Although the agreement is not exclusive to EMC equipment, EDS builds problem-solving hardware and software configurations that allow customers to access data or assist employees in reaching data they need to do their accounts receivable/payable or internal jobs.
The company has already established a hosted services business in which 40 percent of its revenues consists of Web hosting. Presently, it manages more than 6 petabytes of data and 1,000,000 square feet of raised-floor storage space in more than 80 global data and service management centers.
At least one user needs no convincing that storage outsourcing is the way to go. "I can see new companies, such as emerging dot-coms without IS infrastructures, talking to EDS," says Daryl Moultry, strategic storage resource manager for a large Texas retail chain. "If you're a new start-up with huge anticipated storage growth, absolutely EDS wins out."
Moultry, however, would probably not choose EDS for outsourcing. "Put yourself in the shoes of an established company," he says. "Do you want to let EDS put its foot in the door by managing your storage today and your whole IS organisation in the future? For some companies, the fear of EDS is out there in a lot of software organisations."
IDC estimates it will be more economical for companies to hire external IT services providers instead of fighting to keep their IS departments staffed and savvy about new technologies. As a result of this evolution, IDC expects the worldwide IT services industry to increase at an annual growth rate of 10 percent by 2003 to reach nearly $472 billion.
"EDS totally validates the SSP market," says Steve Duplessie, an analyst with the Enterprise Storage Group. "The other companies such as AT&T and Qwest, with the exception of SNI, are big but have no real 'systems' experience. EDS does. It already has what others do not - big name legacy accounts that they can roll this service out to."
The second group of EDS' managed storage services is aimed at midsize to large companies with an established back-end database that needs high-end backup. For this service, EDS will offer EMC's TimeFinder or VolumeLogix software. TimeFinder lets users create mirror images of production volumes for backups, increasing availability or compression purposes. VolumeLogix is used to manage and control heterogenous access to storage volumes in Windows NT and Unix networks.
A third service will target traditional companies looking for quickly scalable, variable capacities for seasonal data surges caused by holidays or media delivery of live events. This service will use products from EMC such as the Symmetrix Remote Data Facility (SRDF) to make data available to customers more quickly. SRDF is host-independent, mirrored data software that duplicates production data on one or more physically separate systems.
EDS managed services will start at less than $50,000 per terabyte per month and will be available in June.