Minding the Storage

Like death and taxes, there are some subjects that nobody wants to ponder for too long. Nonetheless, they happen whether we think about them or not. Data storage is a little like that. It's not a sexy topic, we know. But if your company wants to manage its information, it's inevitable.

Proof of the pudding is that analysts and consultants estimate that from 50 per cent to 70 per cent of most companies' capital technology budget is spent on storage. That's a lotta bread in the pudding.

Consider further that even with the tightened purse strings, those budget numbers aren't likely to shrink. As companies get evermore information-centric, they increasingly stockpile hoards of data in order to extract valuable information on things like customers, products and operational data - any titbit that will yield a competitive edge.

It stands to reason that the more information a company needs, the more it will also need places to stash it. "Most people have historically viewed storage as a boring necessity," says Naresh Lakhanpal, national practice director of the technology media and telecom practice at Deloitte and Touche (US). "Now, however, people are starting to understand that storage holds the lifeblood of many companies."

In fact, Adam Couture, an analyst at Gartner (US), reports that worldwide storage capacity will skyrocket from 283,000 terabytes in 2000 to more than 5 million terabytes by 2005. When it comes to data, one terabyte - that's a one with 12 zeros after - holds the equivalent of 50,000 trees' worth of printed material. And 5 million terabytes, well, let's just say that companies like yours will be buying an awful lot of storage. So, CXOs suppress that yawn and keep reading. You'll learn why storage needs have soared, how your CIOs can make smart purchasing decisions and the reasons behind some big changes rumbling in the storage industry. Believe us, your budget will thank you.

SPENDING, SPENDING AND MORE SPENDING

Talk about a frustrating paradox: storage hardware vendors like EMC, Hitachi and IBM have engaged in a vicious price war during the past couple of years. As a result, the prices on their big storage disk drive systems have declined at a rate of 35 per cent to 40 per cent a year, notes Phil Goodwin, the program director at Meta Group (US). So it's a shock to senior management to see that storage costs are still climbing, he says.

Bill Gearhart agrees. "When I go to senior management and need a few hundred thou for disk space, it rattles their cages a little," says Gearhart, director of IT at Florida-based Rinker Materials, a $US2.5 billion construction materials manufacturer. But Gearhart has very little choice in the matter. The reason? With corporate demand for storage capacity doubling every six to 12 months, the need for storage is outstripping the price drops.

Moreover, hardware isn't the only line item for storage costs. Software and services such as outsourcing are taking an increasingly large chunk out of the total storage expenditures at many companies, and making maintenance more expensive and unwieldy. It's even spawned a new job title: storage network manager, whose skills are so in demand that the position commands a salary in excess of $100,000.

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