Friday, May 15, 2009

Clients

Assume for a moment that becoming a cloud storage provider can be done with no additional investment in software, hardware or even time and that you will be able to leverage your existing assets to offer to the potential clients.

Clients can be divided up into two categories based on how you offer the service, via a private or public cloud. In a private cloud you would allow your clients to access and share their data online but within a closed environment. The cloud is behind your firewall and to access it they must be authenticated into your network by your normal security protocols.

If you decide to go a public cloud route you are going to allow a wide range of clients to access a section of your storage, but they cannot access each other’s storage, nor of course your organization’s data.

The most common case, and a great first entry into being a cloud storage provider, is where individual departments become clients of the IT department. A private cloud is typical for this use case. In this scenario each department’s storage utilization is tracked and charged back to them. In some organizations this is a real transfer and impacts both departments’ budgets; in others it is artificial, but allows each department head to see the impact of their storage footprint.

Often this approach leads to each department being more conscientious of storage utilization and the cost of that storage. As a result storage utilization declines. Ideally this storage can be positioned to lower primary storage costs and encourage departments to "push" older data to your cloud offering.

It is interesting to note that most cloud storage providers cite groups within larger corporations as their largest customer base by far. It makes far more sense for the organization to capture this revenue for themselves, plus an internal cloud keeps the data within the organization as opposed on an unknown entity’s storage platform.  

A potential next step is to determine if you will be able to attract clients that will use the service beyond the department model. Many organizations have, in fact, captive clients that simply need to be offered the service. For example, if the organization works with agents or franchisees, there is already a relationship intact and in fact there may very well be an IT relationship in place.

Additional prospective cloud storage customers come from other organizations that either have complementary products and services or are located nearby. Real life examples are in the healthcare sector where many regional hospitals are providing services to smaller hospitals and clinics in their surrounding area. Given that medical data is confidential and life-critical, the healthcare industry sets a high bar for security, privacy, and reliability of any industry. Therefore, once a regional hospital puts its seal of approval on a cloud storage solution you can be sure the solution is rock solid. For instance, Bycast is a leading supplier of cloud storage enabling software in the healthcare sector so their solution must meet the industry’s stringent requirements for protection and availability of life-saving patient data. Due to its high standards and mission-critical environment, the healthcare industry is really a model on which all other industries should base their cloud storage strategies.

A final perspective client, especially in a larger organization, may be an employee. More than likely they already have external access to the data center and certainly they have an account. In fact they are probably already storing some personal information on the corporate network despite the 15 memos asking them not to do so. In addition they are likely already using some form of external service for backup or personal storage.

If capturing clients is harder than this, then becoming a cloud storage provider may not be right for the organization but it does not necessarily rule the option out. It depends on the IT department and how much time they want to invest in the project.

Asset Allocation

The next step is determining if there are sufficient storage resources to initially allocate to the project. Unlike a critical system rollout, this does not need to be a large upfront investment of storage resources to not only meet the demand now but projecting the future.

Cloud storage enabling software solutions, such as those available from suppliers like Bycast, are designed for near instant growth as the demand needs it and that growth can come from a mixture of storage devices. Phase I’s storage allocation can come from a different storage solution than phase II’s. For example, the initial rollout can be on some excess capacity on a NAS and then phase II could come from excess capacity on the SAN, yet the storage administrator can manage these areas from a single interface and present only a single storage area to the user.

The quality of that storage is important; clearly you don’t want to offer storage that is going to fail. In general it is safe to assume that most data centers already have enterprise grade storage, even at the SATA storage level. Additionally some cloud storage enabling software suppliers can adjust the level of protection to compensate for any data vulnerability. In fact this can be offered as a service where the user may choose to pay extra for higher levels of redundancy and locations.

In close parallel to the determination of what storage to use for the project is to determine what cloud storage enabling solution should be used for the project. The choice here is between adding a software only solution that would allow you to leverage your own excess storage as we describe or a specific cloud storage solution that integrates hardware and software.

The integrated hardware and software cloud storage enabling solution may be viable if it can be justified as part of a broader project and it may simplify some of the process by having a single point of contact for support issues. Its biggest disadvantages are related to cost. There are upfront costs because the integrated solutions often have a starting capacity of 50TB’s or more and obviously the expense has to be incurred upfront. Even after the upfront investment is made the ongoing costs are typically more significant because you can only source capacity from one vendor.

Because of these factors some of these integrated cloud storage enabling solutions are offering the initial footprint at a greatly reduced price or on attractive lease options. Some even provide the hardware at no cost and charge on a monthly use basis. Regardless of the packaging, with these hardware-based solutions free is not free if you have to buy significantly more capacity than you need. In the 50TB example, space in the data center has to be allocated, that storage has to be powered, cooled and managed, all of which can be expensive even if it is sitting mostly empty.

Organizations that deploy cloud as a service will learn the same lesson that traditional service providers had to. Free space on a storage platform means that you are spending money on an asset, and you must power and cool that asset even while it goes unused. What makes this even more painful is that the asset could have been purchased for typically half of its present day value if the acquisition had been delayed until it was actually needed.

For these reasons, cloud storage enabling software that is hardware vendor agnostic may be ideal for organizations looking to become cloud storage providers. These storage-agnostic types of solutions will allow you to provision storage that you already own and then mix and match that storage as the service grows. There is no requirement to make an upfront investment in additional storage capacity. A few of the storage agnostic providers only charge you for their solutions as the capacity is allocated to it, so even the upfront software costs are minimal.

As your cloud storage service grows, a storage agnostic solution allows for flexibility in what type of storage is added to it. The decision can be made at that point in time based on prices, reliability and of specific requirements. These solutions also allow you to select just the amount of storage needed at that time. As highlighted earlier, storage does not get more expensive with age, buying more than you need because you have to is not cost effective.

For a detailed explanation of the options available to organizations looking to offer cloud storage services please see our Cloud Storage Realities White Paper.

Deploying the Service

The final step is the actual deployment of your service. With an integrated cloud storage enabling solution  most of the setup work comes in the form of an additional charge from the manufacturer of the solution. With a cloud storage enabling software solution you need to allocate servers and storage to those servers. In many cases the cloud storage enabling software can run in a virtual machine on a virtual server infrastructure, further reducing hardware costs.

You'll also want to address any security concerns, making sure that users of your cloud storage service can in no way access any other portion of your network. The data must be safeguarded within the data center, and on its way to and from the data center, and during migrations. To address this, the cloud storage security features should include strong encryption of data at all stages of storage and transport, encryption key separation and escrow, connection authentication, per-customer security partitions, and per-transaction audit records.

With your service deployed you will need to understand how the system you select will handle tasks like creating users and tracking storage utilization for billing. These capabilities vary greatly amongst cloud storage enablers. Bycast, as an example, has audit facilities that provide detailed billing and usage information, allowing providers to design offerings with per-asset, per-transaction, and per-byte billing models.

Most cloud storage enabling software solutions are designed to require minimal administrator involvement on a day-to-day basis, and even tasks that would require a significant planning cycle on primary storage offerings are relatively quick to implement..

The most important aspect of deployment is to keep your service simple and start slow; again a storage agnostic supplier helps here. The goal is to start your service with minimal out of pocket expense to the IT department. Let the service prove itself to be profitable and then add capabilities and services as that happens. Make sure that the cloud storage enabling solution has capabilities beyond the basics but confirm the service can be deployed in a "simple" mode to get started.

By Becoming a cloud storage provider allows you to leverage an IT investment that you already have with a prospect relationship you already have. By doing so you can provide the organization in general, and the IT department in specific, with additional incremental revenue that, in tough economic times, will be highly valued.