SMBs Aren't Sold On Cloud Storage

Surveys released by In-Stat and Drobo show smaller companies are sticking with on-site storage, but they should consider online backup for an extra layer of protection.

Kevin Casey, Contributor

May 25, 2011

5 Min Read

You might logically think the disturbances in the cloud of late would shake confidence in online storage. But small and midsize businesses were already anxious, according to two new surveys that show a heavy reluctance among SMBs to go all in with their data in the cloud.

Market research firm In-Stat earlier in the week said that some 70% of SMBs using online storage also have a network-attached storage (NAS) unit. On Wednesday, storage vendor Drobo released its own survey results that show an eye-popping 99% of smaller businesses have no intention of ever moving all of their data online.

SMBs are right to be wary--in spite of the potential cost and ease-of-use appeals in online storage, it's not a be-all, end-all option, at least not yet. Security and downtime remain legitimate concerns--Dropbox and Amazon both recently reminded everyone of that. But when 99% of SMBs say no thanks to all-cloud storage? That seems more than just waiting for the kinks to get ironed out. Of the respondents in the Drobo survey who store at least some data online, well over half said they still planned to keep at least 75% of their data on-site. Kevin Epstein, Drobo's VP of marketing, said that while he wasn't too surprised by the survey numbers, he didn't expect the 99% figure. He attributed it in part to growing data and the challenges of moving it online.

"It's hard to move terabytes of data quickly over networks," Epstein said in an interview, noting that while online storage can serve a variety of real needs, such as backup and remote access, many businesses still need the advantages of on-site data.

Now, consider the source: Epstein's firm makes stylish network storage devices for SMBs--so the Drobo survey results are good news from his vantage point. It's also worth noting that the survey sample included some existing Drobo customers--those respondents had essentially already voted with their budgets. But even if you're inclined to cast a skeptical eye at Drobo's survey, In-Stat is an independent research firm that doesn't stand to benefit directly from what it estimates will become a $2 billion NAS market for SMBs.

Both surveys state clearly that SMBs don't want to store everything off-site--it's too risky, at least until the market matures. Security and access issues will likely--well, it's hoped--improve over time. It also seems like a market ripe for some merger and acquisition activity, given the growing field of players and the improving economy.

But on-site storage isn't necessarily fail-safe, though. Esptein acknowledges as much: "Having your data backed up in more than one place, not just on-site, is a fine thing," he said. "I think the recent media coverage simply highlights the fact that there is no perfect solution. To rely on any single solution--and I think most IT people would empathize with this--can be challenging."

Storage means different things to different users, but especially when you look at latent data--not the stuff core applications need to access now, but the archive of bytes that a business wants or needs to keep safe for a variety of reasons--it seems that the cloud should have wider appeal to SMBs than either In-Stat's or Drobo's numbers indicate. Perhaps it's the all-in nature of the survey questions--they exclude an obvious, often necessary benefit of online storage: backup and redundancy. While costs can certainly rise as you approach the terabyte level, there's little or no capital expenditure required. And basic online backup requires few IT resources--time-strapped SMB owners and managers can devote their valuable hours to other challenges.

Indeed, if you dig a little deeper into Drobo's numbers, more than half of respondents have in fact purchased online storage--it's just that it's only a partial solution. That might be a good thing for data protection. "If you've got stuff online, great. If you've got stuff local, that's great. I think the best case is both," Epstein said. His ideal model is a local storage unit backed up either on another physical device kept in a different location or in the cloud. Better yet, keep a primary backup on a second storage device and another copy--a backup of your backup--online.

Vendors can do more on this front--make it as easy as possible for SMBs to set up a similar storage structure. Some hardware makers are partnering with cloud vendors to offer a combination of local storage and online backup for redundancy, without requiring smaller businesses to go to multiple sources. Cisco began offering optional online backup from Mozy for its SMB storage units earlier this year, for example. Drobo partners with Oxygen Cloud to enable remote data access. In fact, vendors--particularly the online players--may be well-served if such partnerships were to become a wider trend: Recent research shows an inclination toward cloud bundles among SMBs. It's all about saving time and money. (Regarding the latter, Epstein points out that online backup can get pricey when you're dealing in terabytes.)

So, store it on-site, back it up at a different physical site, and then back it up again online. We're done here, right? Not necessarily. Analysys Mason principal analyst Steve Hilton offers a reminder that SMBs are a diverse bunch, and their storage needs are no exception. Not all SMBs need that level of sophistication and redundancy. While companies might want critical application data in-house for performance and security reasons, other categories might not require the same approach.

"All data are not created equal," Hilton said via email. "If it's simply email backup and the SMB has few compliance issues, then I say put all in the cloud.

Recommended Reading: Intel Launches Hybrid Cloud Service For SMBs Why Are SMBs Wary Of SaaS? SMB Cloud Spending To Double By 2015 CA To Offer Cloud-Based Backup, Recovery Can Open Source Solve Big Data For SMBs? D-Link Targets SMBs With Switches, Routers, Cloud Management See more by Kevin Casey

Security concerns give many companies pause as they consider migrating portions of their IT operations to cloud-based services. But you can stay safe in the cloud, as this Tech Center report explains. Download it now. (Free registration required.)

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About the Author(s)

Kevin Casey


Kevin Casey is a writer based in North Carolina who writes about technology for small and mid-size businesses.

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