Disk storage is already one of the data center's biggest expenses, the cost of finished arrays keeps rising, and IDC predicts that companies' storage infrastructures will grow 300% by the end of the decade. Amid this backdrop, there's growing concern that businesses will drown in the expense of storing data.

Enter cloud storage--network-accessible storage infrastructure that evangelists promise will prevent the apocalyptic scenario envisioned above by IDC in its "Exploding Data Universe" report (sponsored by EMC). Proffering largely untested claims about huge capacity cost reductions, the elimination of labor required for storage administration and maintenance, and just-in-time provisioning of capacity on a pennies-per-terabyte basis, cloud storage providers are getting the attention of businesses large and small.

To storage industry veterans, cloud storage doesn't feel like a brand-new model. The core concepts are derivative of service bureau computing paradigms advanced by IBM and others in the 1970s, of Sun Microsystems' "the network is the computer," and of application service providers and storage service providers of the 1990s.

What's different this time? The economy, of course. With on-premises storage costs already high and growing in many IT departments, interest in alternatives is strong. Storage-as-a-service vendors say they can lower costs by taking on the burden of storage management and insulating customers from related costs like hardware upgrades. If cloud providers can capture economies of scale by using the same pool of storage capacity to meet the needs of many customers and pass along the cost savings, the price of spindle capacity should be well below what companies would otherwise pay for their own storage.

The earlier-generation application and storage service providers made a similar argument, but they ran into problems that contributed to their undoing, including the networking costs of connecting users and applications, and customer concerns over sharing infrastructure with other companies. Once customers started demanding that their services be provided using physically separate components, ASPs and SSPs were forced to violate their own economies of scale by deploying infrastructure on a one-off basis for each customer.

Cloud storage vendors say they've gotten past those obstacles. Network connectivity is faster, cheaper, and more secure, and virtualization technology is being used in corporate data centers to provide segregated storage environments, minimizing concerns over data infection and demands for dedicated infrastructure.

Cloud storage folk point to the high cost of storing data that's retained for business or compliance reasons, yet rarely re-referenced by the organization. This data, they say, is ideal for cloud-based storage, and doing so will free up the spindles that companies now use for primary or live data. This argument has some merit and will likely become a mantra: the cloud as a low-cost repository for compliance and archive data.

Delivering such services, however, is again a two-edged sword for cloud providers. To address governance rules, including privacy laws, that apply in different geographies will probably require cloud storage companies to have multiple data centers with different operating procedures, audit standards, and certifications. This is no small issue and may quickly determine a pecking order in the universe of cloud storage services.

To better understand the cloud storage options available to businesses, InformationWeek issued a request for information and invited all storage-as-a-service vendors to participate. We did so under the auspices of a hypothetical midsize company called DIY Marketing Services, with nearly 100 TB of data in its storage infrastructure and volume growing quickly.

Five vendors--Caringo, IBM, Iron Mountain Digital, Nirvanix, and Zetta--participated, and our analysis of their proposed solutions is included in this report. The RFI can be downloaded in its entirety here.