October 2, 2000

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IBM Adds Hosted Storage Management

New offerings help companies handle increasing complexity and cost of storing data

By Larry Greenemeier

More on storage:

Tech Web Finnce: Agilent Forms Storage Networking Division (9/28/00) Internet Week: Funding Pours Into Storage-Over-IP Firms (9/25/00)

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E-business initiatives are causing data to flood into IT systems by the gigabyte. To help companies handle the increasing complexity and cost of storing this data, IBM Global Services last week added hosted storage and storage management to its portfolio of On-Demand IT services.

IBM Global Services will offer hosted storage and accompanying services such as data assessment, archiving, and availability on an as-needed, pay-as-you-go basis. Global Services will store the data at a customer's location, or at 175 IBM data centers worldwide.

Projections for storage service sales are strong, even though acceptance has been lukewarm so far. Just 13% of 385 companies surveyed by InformationWeek Research in August are using storage service providers (see story, p. 84). The market will reach $8 billion by 2003, according to International Data Corp. IBM estimates that 4% of a company's IT budget is dedicated to storage devices and services now, but that will rise to 20% by 2004, according to Ginni Rometty, general manager of strategy for IBM Global Services.

IBM's offerings are welcomed by ChartOne Inc., a provider of online services for storing and managing patient chart data for hospitals and clinics, which recently released virtual file-room services known as vChart. ChartOne chose IBM over EMC Corp. because the latter didn't offer its own hosted service and would have partnered with EDS to provide the same services as IBM, according to Ivar Chhina, president and chief operating officer of ChartOne, in San Jose, Calif. Storage management is central to ChartOne's vChart plan, Chhina says. "We'll be storing and managing terabytes of data rather quickly," he adds.

What sets IBM Global Services apart from competing SSPs such as StorageNetworks Inc. and Storability Inc. is that it combines hosted storage and storage management services with database, network, and application hosting services, says David Hill, research director of storage and storage management for the Aberdeen Group.

Getting these services from one provider holds great appeal for IT departments managing increasingly complex storage systems, Hill says. Backups used to be done at night, but now administrators don't have downtime. "They have to do online backup using point-in-time copying," he says. An SSP can do those backups for them.

Compaq is another storage provider that offers hosted storage and managed services, but it installs storage hardware and software at customer sites or co-location facilities. As with IBM's On-Demand service, Compaq customers don't actually own the storage systems. Pricing for Compaq's Private Storage Utility service is $35 to $55 per gigabyte per month, while pricing for IBM's On-Demand storage services range from $25 to $75 per gigabyte per month.

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