State of Technology: Getting Creative With Data Protection

The demand for data-storage space is insatiable. For VARs, it seems the road to success is simply a matter of adding terabytes--in some cases, petabytes--of capacity to customer networks.

But not so fast. Even though the cost of storage per megabyte continues to fall to mere pennies, selling storage capacity doesn't always lead to revenue and profit for solution providers. In fact, adding capacity without taking management and business problems into account can actually work against resellers.

"You can't compete on price and reselling hardware," says Roy Jackson, vice president of IT consulting at CAS Severn, a Laurel, Md.-based solution provider and IBM Premier Business Partner. "Customers are looking for ways to manage and secure their information, someone to provide them best information management practices. They're looking for someone to provide them a storage vision. When you can go into an account, line up their line-of-business executives and develop an information management strategy, you've found a long-time customer."

The storage game is won and lost on a solution provider's ability to solve real business problems. Smart storage VARs are bundling management applications around storage hardware and developing integrated storage systems to address customers' chief pain points.

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The list-toppers: efficient capacity expansion, e-mail and message archiving that meets regulatory requirements, storage life-cycle management, disaster recovery/business continuity and data security.

"There's a lot of opportunity out there now for solution providers to help companies classify their data according to business and regulatory requirements, identify waste, and manage and automate the total information life cycle," says Adam Couture, principal storage research analyst at Gartner.

According to the VARBusiness quarterly State of Technology survey, 72 percent of solution providers plan to sell backup-and-recovery storage technologies during the next 12 months. And while desktop storage products reigned last year as the single-largest slice of revenue, at 29 percent, VARs expect enterprise storage technologies, such as disk arrays, tape libraries, appliance-based storage solutions and SANs, to become a larger percentage of their storage revenue this year.

Walter Hinton, CTO of Boulder, Colo.-based Incentra Solutions, a storage-services provider, says the need for off-site electronic data storage and disaster recovery services is once again on the rise. Five years ago, disaster recovery was spurred by 9/11, when many financial institutions in and around the World Trade Center lost their digital and physical records. The resurgence of disaster recovery is being fueled by last fall's Gulf Coast destruction by hurricanes Katrina and Rita, which affected businesses of all sizes.

"A lot of businesses that have their internal storage, services and infrastructure in place are looking to attain a second disaster-recovery data-storage location without having to invest in a second data center," Hinton says.

Few know the need for bundling storage management, applications and services around hardware as Incentra does. In 2000, StorageTek--now owned by Sun Microsystems--spun off the company as a managed-services provider that guarantees data storage protection.

"You have to help your customers keep their data available and clean," Hinton says. "You have to manage their life cycle and security, and become their information-management partner."