There is currently about $55B spent on storage and storage services annually. Much of this is spent on what I call the storage box – hardware and storage software that stores data of all types. Due to often inaccurate capacity planning and non-centralized storage across multiple divisions, departments, and workgroups , the current rates of utilization for these storage boxes are at a shockingly low 10-12%. Couple this with the exponential growth in data, particularly unstructured, which has put severe pressure on already strained IT budgets and staffs. Companies simply can’t keep up with the explosive data growth, let alone the costs of storage without altering their practices and finding a new more efficient model. The archaic box model of storage is now extinct.
As a result, we are seeing the emergence of a new IT inflection point in storage – the shift from the box to the Cloud. No longer will companies buy boxes and rack, stack, power and manage them. Companies will simply plug into to the Cloud and receive benefits beyond the box. These benefits will include breakthrough economics, on demand global scale, and guaranteed security and availability. As such, a minimum of 50% of the current $55 Billion annual expenditures in storage and storage services will shift to the Cloud within the next 5 to 7 years. Companies will shift from managing their explosive storage costs and growth, to managing their businesses.
There are three necessities occurring within the industry which will drive the move to the Cloud:
#1 Economics, Economics, Economics
If you look at the total cost of ownership (TCO) associated with storage, particularly the cost of buying the hardware, then managing it, growing it, and planning capacity expansion, you can quickly see how inefficient the old model is. I have seen companies that are buying, racking, stacking, powering and managing their own storage and can end up paying as much as $3 per GB/month. This price model should now be obsolete. Companies will end up saving a minimum of 50% off their total costs for storage once they make the move to the Cloud. Instead of investing in those non-core competencies that don’t add value to their business, companies should be investing in building out their business and fostering partnerships and customer relationships.
#2 On Demand Global Scale
There has been a large mass-scale growth in unstructured data and content storage. This huge growth in unstructured data presents an exponentially increasing problem. As the amount of unstructured data continues to grow there is a severe pressure on IT environments to quickly deploy and manage globally accessible scalable storage. Applications and users can no longer be locked to a single location, and in many cases must scale to meet what the Internet demands. Instead of focusing on managing storage, which doesn’t give you a competitive edge, you can focus on managing and growing your business.
#3 Guaranteed Security and Availability
Part of the resistance to Cloud storage has been around trust and reliability. Moving data into the Cloud is more secure and allows more persistent data availability than current paradigms. For example, if you look at tape archiving, where you are shipping off a tape on a truck to an external environment, in many cases Iron Mountain, what if something happens to that truck? An obvious question, but a valid concern presented when there are people processes associated with that data. Not only is it simple to put data in the Cloud, but that data is also encrypted before it ever leaves the four walls, in flight, and at rest. Additionally, with a fully redundant network, in which data is replicated to multiple nodes, data availability and security can be guaranteed at 100%.
Historically speaking, there is always a new kind of company that emerges on the other side of that IT inflection point. When the industry realizes the points of concern, and the potential benefits to remedying those concerns, there will be a major shift within the market. Some preexisting companies will undoubtedly modify their current services or pull a marketing veil over out-dated technologies. However, there will also be new, legitimate companies and services that will emerge, which will not deal with the legacy approaches or the cannibalization of existing out-dated products. These revolutionaries will build new DNA from the ground up, optimized for that new model. In the case of Cloud Storage, I am confident that Nirvanix will be that company. Built from the ground up for better economics, unlimited scalability, and 100% guaranteed security and reliability.
Through innovation and unparalleled dedication to customer support Nirvanix’s unique solution, the Storage Delivery Network™ (SDN), will lead the forefront of the Cloud Storage movement. Since launch in October 2007, we have signed major Fortune 50, large media, entertainment, and well known PC software companies that depend on us every day to store, manage, and deliver their data worldwide. We have maintained 100% uptime availability since launch while growing 10 fold in 6 months. We are uniquely positioned with our SDN and our differentiation will continue to grow as we accelerate innovation in key areas including expansion of our multipetabyte global storage network, pioneering secure and easy access methods through standard storage protocols, and delivering advanced data security and reliability policies unrivaled in the industry. The box is dead, long live the Cloud!
Patrick Harr | Founder & CEO