Sunday, December 02, 2007

Google's Gdrive and Storage services

A few years ago when storage was a hot new thing, and the internet was still in boom times there was a company called Storagenetworks that got lots exciting press coverage.
In 2000 one well respected analyst was enthusiastic..

Business is starting to get ready for storage outsourcing, said Steve Duplessie, senior analyst at The Enterprise Storage Group Inc., a Milford, Mass.-based consultancy.

StorageNetworks pitch was that Storage could be run as a service, and at first it made some sense. However, their cost structure was too high and at the time major corporations were afraid to outsource their tier one storage and databases to a company like Storagenetworks.

Google is now trying to offer a similar model but with some Google mixed in...

Popular Mechanics
has an excellent article on some of the issues with this...

"Trusting information with a third-party client can still expose you to thorny legal challenges such as a subpoena. Unlike a search warrant for your off-line hard drive, which is far more restrictive and difficult to obtain, Google could perhaps be persuaded by law enforcement to deliver up your files—without even telling you.

“Google would be wise to offer users an option to encrypt your information,” says Nimrod Kozlovski, a professor of Internet law at Tel Aviv University. “It really needs to have really detailed explanations of what the legal expectations are for storing your info.” "

"Then there’s the trickier part: How does giving away storage translate into profits for Google? The company could potentially serve up contextualized ads to Gdrive users similar to its Gmail service and the Ad Words search model that made Google a giant in the first place. In this case, a computer might scan through all your files for relevant keywords, in a move that’s certain to spook privacy advocates, who tend to give Google a free pass compared with some of its competitors. "

There is no question in my mind that Google will get market share and it is a disruptive enough model to upset the storage oligarchs model of selling more hardware. If Google is able to pull this off it may validate the StorageNetworks model, it may also create a whole new storage services sector in the marketplace and provide companies, and just plain folks, with more choices for how they manage and maintain their storage. And this will be a good thing for everyone except those array manufacturers who maintain their box selling sales and marketing strategy.

History may not repeat itself, but it certainly is entertaining to look at old news reports like this...

StorageNetworks IPO Signals Boom For Storage Outsourcing
EMC Accuses SNI Of Misrepresenting Relationship
(URL: http://www.crn.com/storage/18816631)
By Joseph F. Kovar - CRN - Waltham, Mass.
7:58 PM EDT Fri. Jun. 30, 2000

StorageNetworks Inc. demonstrated that the IPO market is still alive and well when its shares skyrocketed 234 percent after going public today.

StorageNetworks, an early entrant in the storage service provider arena, is hoping to ride an expected wave of storage outsourcing.

SNI, based here, sold 9 million shares of common stock priced initially at $27 per share, up from its original plans to offer shares at $17 to $19. By the end of trading day Friday, shares closed at $90.25, after retreating from a day-high of $102 but still up 234 percent.

SNI is the best known of several storage service provider startups offering to manage the growing storage needs of businesses and consumers at remote data centers.

International Data Corp. projects that worldwide storage services spending will exceed $40 billion in 2003, up from about $21 billion last year. Of those services, management and outsourcing will have a compound annual growth rate of 31.8 percent during that time, IDC said.

Business is starting to get ready for storage outsourcing, said Steve Duplessie, senior analyst at The Enterprise Storage Group Inc., a Milford, Mass.-based consultancy.

As storage needs grow faster than the ability of companies to grow their storage capacity and management, outsourcing will become an important part of their strategies, Duplessie said.

It is easier for businesses to focus on core competencies and leave storage to the experts, Duplessie said. "Clearly the dot-coms were born for (storage outsourcing)," he said.

Duplessie agreed with many industry observers who predict corporations will hesitate to hand their data to outside service providers. "However, data backup is a universal headache," he said.

When it comes to disaster recovery and backup, he said companies will find outsourcing preferable to building a whole second storage infrastructure.

"I could outsource such secondary and tertiary operations, and still control all my own data," he said. "And as companies get used to working with SSPs, they will move more of their data."

All is not necessarily rosy for SNI, however.

Company officials, in a regulatory filing filed Monday, said that EMC Corp. sent SNI a letter on June 21 alleging that SNI has misrepresented that EMC is an investor in SNI even though that is not the case. EMC, in that letter, also accused SNI of recruiting EMC employees and targeting EMC customers in violation of agreements between the two.

SNI purchased over 90 percent of the disk storage arrays and related software it uses to provide its services from EMC last year, although the company now works with about 15 different suppliers, company officials said. Forty percent of SNI revenue in 1999 came from providing professional services to customers of EMC.

1 comment:

e2eiod said...

Interesting post.
A lot of "Food for Thought"

One way to compete with this trend is to join it in a selective, profitable way.

The driver is cost. The IDCs (Google, Amazon, Yahoo, Microsoft) have the advantage of "economies of scale" beyond anything any SMB and many Enterprises could only dream of. At least Google for sure and probably Amazon.

If companies knew which of their Stored Information generated 80% of their Gross Revenue they might be pleasantly surprised to learn it is a small percent of their total Storage. This is where eDiscovery and Content Management come into play.

You want to protect your "Core Assets" that generate 80% of Gross Revenue and that give competitive advantage by keeping them under tight control in-house.

If a Storage VAR could help customers identify that Information and Storage then they could sell the Units of Technology necessary to do that.

Past this point they could assist the customer, for a price, in Implementing secondary, tertiary or quaternary mirrors, or geographically dispersed active/passive sites, on external Online Storage like Google or Amazon S3. The very enterprising VAR might even "block buy" from the IDCs and lease the "Managed Online Storage" to their customer.
This is a much needed service.

StorageNetworks never had any intention of providing this service. I'm not sure any SSP, ASP or MSP could. Their cost structure is wrong.