The rationale is compelling. "We considered bringing storage in-house," says Dr. Myles Saunders, founder and acting CEO for HealthAddress.com. "We did due diligence and became convinced it was better, for technology and security reasons, to outsource it."

According to Saunders, the 28-person Los Angeles startup provides detailed and secure medical information to doctors and consumers online. It had no storage expertise in-house. Critical medical information, under federal scrutiny, requires the tightest levels of security. Most of all, Saunders wants doctors and patients to access this most critical data from anywhere in the world. So HealthAddress.com chose X:drive Inc. to store and manage all of the startup's data. "I'm a neurosurgeon and that's the business I know," Saunders says. "We didn't feel we had to reduplicate any wheels already invented."

While the appeal of the fledgling service might be obvious for startups, some well-established companies also like the idea. John Brighton, CIO at insurance company Aetna Inc. in Hartford, Conn., says he chose IBM's Enterprise Storage System because it could be located remotely and securely managed that way. "Because of the Web and the spiraling amount of data and information, it won't matter to us if the storage vendor provides it here or from California," Brighton says.

At least one analyst says there are advantages for companies at either end of the spectrum. Those spending the most on storage have a lot to gain. "Time is money with storage upkeep and maintenance," says Caryn Gillooly, an analyst at Hurwitz Group. "With today's revolving door of IT staff, keeping any expert in-house and finding expertise is difficult."

Other vendors offering storage as a service include ManagedStorage International, Storability, StorageNetworks, StorageWay, and Zantaz.com. (For an in-depth analysis of two storage-service vendors, see story, "Convenient Online Storage.")