IBM enters storage outsourcing arena

Posted on October 01, 2000

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By Richard R. Lee

IBM's Global Services division recently announced that it was entering the "hosted and managed storage services" game with a wide range of on-demand storage and storage management services. The program is designed for users looking to reduce the chaos associated with explosive data growth and management requirements.

IBM hopes to capture a significant piece of the storage service provider (SSP) market, which is expected to grow from about $150 million this year to more than $8 billion by 2004, according to International Data Corp. IBM plans to leverage its 175 existing data centers around the world, along with adding 65 new sites over the next 18 months. These sites will support hosted storage and web services, along with application hosting services. In addition, IBM will provide these same services on-site at customers' data centers if desired.

IBM is betting that the much-touted "IT on demand" business model will become more viable in the coming years as end-users embrace a network that delivers technology and services on an as-needed, pay-as-you-go basis, at low costs. IBM believes that its storage services are well ahead of others in the market, and is targeting customers that are moving beyond internal storage networks to a hybrid model that includes outsourced storage. All of this has been done with an eye on reducing storage management costs, which IBM predicts will grow to more than 90% of total storage costs in five years if users do not embrace a new business model.

In delivering storage services, IBM will work with its existing outsourcing partners, such as AT&T, KMPG and Qwest. IBM also plans to work with a host of startup storage and services providers.

IBM's storage services will focus on high availability, disaster recovery and business continuance, backup and archiving, etc. across heterogeneous platforms.

Referred to as Managed Storage Services, the programs have been designed to help both new and well-established companies meet their ever-changing capacity and management requirements with the latest in storage architectures, including network-attached storage (NAS) and storage area networks (SANs). Costs will generally range from $25-$75 per GB per month, depending on particular services provided.


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