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PARTNER’S GUIDE TO
BACKUP AND RECOVERY Parsing a spate of recent IT industry reports
shows bright spots amid the general gloom of the storage market—especially in the cloud. By Scott Bekker
SPECIAL PULLOUT SECTION
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A lmost every part of the IT industry has suffered this year, and storage solutions have been among the hardest hit segments. But it’s not like the world is generating less data that needs to be stored, backed up and
recovered. There are some encouraging signs appearing in market research reports that things are turning around for the storage sector in the IT industry. And analysts say the backup and recovery market appears to be one of the fastest-growing areas within the general industry move toward cloud computing.
Channel partners looking for growth areas over the next fi ve years will want to be positioned to help guide customers toward the backup and recovery solutions in the cloud, should customers not want them on-premises. Meanwhile, another recent study shows that small and midsize businesses (SMBs), especially, need help for backup and recovery. The trick, and the role of good channel sales eff orts, lies in showing customers how unprotected they currently are.
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A TOUGH ENVIRONMENTGartner Inc.’s worldwide forecast for IT spending in 2009 made headlines in July, when fi rm cut its estimate further. The extent of the pain for all of 2009 would be a 6 percent decline from 2008 IT spending to less than $3.2 trillion worldwide. Among that spending, hard-ware, which includes a large part of the storage market, was expected to take a 16 percent hit and remain fl at at that depressed level through 2010. Software was forecast to decline 1.6 percent in 2009, and then slowly come back in 2010 with a 3.2 percent gain.
Verily, much of that seems to have come to pass, especially on the storage side. In a pair of September reports, market researchers at IDC pored over second quarter data from storage vendors. The fi ndings showed that the storage sector came in for a special beating through the end of June.
On the hardware end, the pain was intense. Factory orders for external disk storage systems fell 18 percent in the second quarter of 2009. Total disk storage system factory revenues dropped nearly 19 percent, which IDC attributed to weak server systems sales. The market for open storage-area networks (SANs) fell nearly 24 percent, and the network-attached storage (NAS) market dropped almost 7 percent.
“The enterprise storage system market continued to feel the impact of current economic conditions, posting its third straight [quarter of] year-over-year decline[s],” Liz Conner, an IDC research analyst, said in a statement describing the bloodletting.
In storage software, which includes data protection and recovery, IDC also saw a substantial decline, but not as much of one as hardware experienced. The storage software market dropped nearly 10 percent in the second quarter, compared to the same quarter a year ago.
BRIGHT SPOTS IN STORAGEBut storage software is actually starting to look slightly better, even in Q2. “The storage software market is slowly starting to recover with positive growth over the fi rst quarter of 2009,” IDC analyst Michael Margossian said in a statement describing the results. One market on the increase, quarter-over-quarter, was replication, which increased 5 percent. Any other markets doing better sequentially? Data
protection and recovery: That sector saw 3 percent growth over the previous quarter. Device manage-ment and archiving software also saw small gains in Q2 compared to Q1.
Even within the battered storage-hardware market, there are a few sweet spots for vendors and their partners off ering the right technology at the right price. The entry-level price band of up to $15,000 was strong for both iSCSI SAN and Fibre Channel (FC) SAN, IDC found. The iSCSI SAN growth in that price range was 57 percent year over year (and was 27 percent year over year across all price bands). FC SAN grew 67 percent in the low price band. “Customers continue to demand enterprise-level network storage at a more economically friendly price point,” Conner said.
Although revenues generally declined in the storage hardware and software markets, one thing isn’t dropping on a year-to-year basis: the amount of storage that customers are using. According to IDC, total disk storage system capacity reached 2,345PB in the quarter, a 15 percent jump.
SILVER LININGSWhere the traditional storage industry has a few bright spots, which may or may not improve over the next few months, the area of cloud computing seems to be nothing but upside.
According to a recent study by analysts with Forrester Research Inc., Software as a Service (SaaS) is beginning to make serious market gains.
“SaaS applications have advanced beyond early market applications in human resources and CRM to become a game changer in the enterprise software market. SaaS adoption continues to increase, and it is now relevant for a wide array of applications,” analyst Liz Herbert said in describing a report released this year called, “TechRadar for Sourcing & Vendor Management Professionals: Software as a Service.”
In an eff ort to help end users plan for their next decade of investments, the report identifi ed technology areas that should see the widest adoption in the cloud.
The losers in the report were business intelligence, described as “unproven,” and integration, from which fi rms “should not expect any magic integra-
Any storage software markets doing better in Q2 than in Q1? Data protection and recovery. That sector saw 3 percent growth over the previous quarter.
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tion solutions.” Among the winners were the usual trio of collaboration, Web conferencing and CRM, which already have substantial markets. Three other winners in the Forrester report were Human Capital Management, IT Service Management and online backup.
Of online backup, Forrester noted, “Particularly for small and midsize businesses (SMBs), PCs and remote location, online backup has already attracted strong interest.” The fi rm did off er a caveat, which should keep traditional backup and recovery in the picture for years: “One area of concern is recovering large quantities of data in a short time frame.”
Researchers at IDC also see cloud computing taking off with storage near the forefront. At press time, the fi rm was preparing a forecast for 2009-2013 called, “Cloud Services: Global Overview.” IDC analyst Frank Gens previewed the forecast in October in a blog entry that included several charts.
IDC sees cloud services revenue hitting $17.4 billion in 2009, and projects that revenue will rise to $44.2 billion in 2013. IDC released a similar report last year. “The revised fi gures are still in the same ballpark as last year’s forecast, although they refl ect about a six-month revenue knock back from what would have been expected from last year’s forecast, due largely to the global recession and, to a lesser degree, to better market tracking and tightened defi nitions,” Gens wrote. “The fi ve-year growth outlook remains strong, with a fi ve-year annual growth rate of 26 percent-over six times the rate of traditional IT off erings.”
Cloud services will account for about 10 percent of overall IT revenues by 2013, IDC is predicting. But Gens contended that it’s dangerous for suppliers to look at the market from the perspective of percentage of revenues. “It’s a rear-view mirror view: it misses the impact that cloud services off erings will have on net new growth in the IT market,” he wrote. Of $27 billion in net new IT revenue in 2013, cloud services will account for 27 percent.
Storage is one of the main components of the cloud services future that IDC envisions. IDC is tracking fi ve main product/service types: applications, application
development/deployment, infrastructure software, storage and servers. In 2009, IDC estimates that storage will account for 9 percent of the total worldwide IT cloud services revenues pie. By 2013, the new IDC research will say that storage will account for 14 percent of the pie.
But because that overall cloud pie is growing, the storage revenue opportunity is increasing from an estimated $1.5 billion in 2009 to a forecast of $6 billion in 2013. So while the overall cloud market is expected to be 2.5 times bigger, the storage piece is expected to get four times bigger.
A RIPE MARKETIn backup and recovery, many market trends are converging on SMBs. Forrester noted that SMBs are a key audience for online backup, and IDC’s research even into the poorly performing on-premises storage hardware market found that entry-level priced systems were doing well.
A recent survey of SMBs by Applied Research on behalf of Symantec Corp. found that small compa-nies are relatively unprotected against data loss. In August and September, the fi rm surveyed about 300 North American companies. Most of the respondents were SMB companies with 10 to 499 employees, while some respondents were customers of SMBs.
Some 58 percent of survey respondents reported that they did not have a plan in place to deal with business disruptions such as virus or hacker attacks, natural disasters that cause damage to facilities or lengthy power outages.
When it came to the relatively preliminary disaster recovery step of backing up data, the survey found that the average SMB backs up only 60 percent of its company and customer data. The frequency of those backups was also alarmingly low. Only 20 percent reported backing up data on a daily basis. Nearly half (48 percent) performed backups once a month or even less frequently.
A TRICKY SALEWhile that data would suggest that selling backup and recovery solutions to SMBs should be a cinch,
“Particularly for small and midsize businesses (SMBs), PCs and remote location, online backup has already attracted strong interest.” Forrester Research Inc.
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SMB attitudes toward backup and recovery show that vendors probably need a lot of help from persuasive channel partners to get any solutions into SMB accounts, let alone the right solution. The Applied Research survey found that 81 percent were somewhat or very satisfi ed with their disaster recovery plan, even though most of those same fi rms didn’t have a plan. An almost identical 82 percent reported feeling that their computer and technology systems were either somewhat protected or very protected.
A strong majority (62 percent) was also confi dent that their customers would wait around for them to get their systems fi xed in case of a problem. In that group were 13 percent answering that they expected their customers would “wait patiently” and 49 percent saying that customers might call to get what they could but otherwise would also wait patiently for systems to come back online.
Customers of SMBs in the survey had very diff erent attitudes about downtime among their vendors’ computer or technology systems. Nearly a quarter of the customers reported that in the past, they had evaluated another vendor as a result of downtime by one of their SMB vendors. Further, they estimated the cost to their business of SMB vendor outages at $16,000 per day on average.
GRABBING AN OPPORTUNITYStorage needs continue to grow, even in a recession, at a double-digit rate, and data continues to be more valuable to every business rather than less. Partners looking to tack a strategic practice area onto their business could do worse than to add backup and recovery. With economists for the most part expecting the economy to pick up, even hardware and traditional backup and recovery software solutions are seeing some areas of positive growth.
Meanwhile, vendors looking to grab a share of IDC’s estimated $6 billion storage opportunity in the cloud by 2013 will need help from partners. Channel companies that can develop eff ective ways to show how vulnerable their SMB customers are to data disruptions and that can eff ectively advise customers of all sizes on their best option among cloud and on-premises backup and recovery solutions, will be positioned to grab a piece of that growth themselves. •
Scott Bekker is editor in chief of RCP.
SWINE FLU AND DISASTER RECOVERYThe H1N1 outbreak gives solution providers an unprecedented opportunity to help clients think through their disaster recovery needs.
By Joanna KrotzWhen it comes to data protection and recovery, major issues in the news off er teachable moments to start conversations with customers about wide-ranging disaster recovery plans that include backup and recovery as an element.
The heightened anxiety about H1N1 translates into timely risk-and-reward opportunities—as well as responsibilities—for IT providers and consul-tants. Whether or not you’ve ever broached the subject, it’s a good time to set up meetings with customers to talk about possible challenges and how they can protect business operations.
To begin, Mike Emerson, director, IT Security, Governance and Business Continuity at Citrix Systems Inc. in Ft. Lauderdale, Fla., suggests that you advise clients that such planning is mostly common sense.
“You want a business continuity plan in place that’s short and clear. It ought to have specifi c trigger points that are actionable from a team perspective,” says Emerson. “You don’t want 300 pages of fl uff that no one can remember.”
And since you can’t predict which critical operations or which essential staff will be out of commission or unavailable, focus on “redundancy” and “fl exibility.” In other words, businesses need to cross-train skills and create several backup scenarios beforehand so if one fails, the other kicks in.
Labrador-Retriever ApproachNo doubt, in this tough environment, customers will resist the idea of investing dollars, time and talent in what-if scenarios. “Frequently,” says Lew Smith, manager of virtualization solutions at Interphase Systems, a Gold Certifi ed Partner in Plymouth Meeting, Pa., “the initial reaction when an organization is looking to take precautionary steps against the impact of H1N1 is: How much is
While IDC expects the overall cloud services market to get 2.5 times bigger in fi ve years, the fi rm expects the storage piece of it to get four times bigger.
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this going to cost?” In response, he emphasizes the price of doing nothing.
“What’s the cost of losing business and staff in the long run if there’s no ability to buff er the impact?” But before recommending any services or products, Smith encourages clients to “re-evaluate systems that they have and to think about utilizing them in diff erent ways.”
Likewise, when marketing your services for pandemic preparedness, or, indeed, for disaster planning generally, the “Labrador-Retriever approach is better than the Bulldog one,” suggests Nick Cavalancia, vice president of Windows Management for ScriptLogic Corp., a Gold Certifi ed Partner based in Boca Raton, Fla. “Deliver some upfront value and practical help that will keep customers productive rather than shoving solutions, money and costs down their throats.”
The idea is to help customers under-stand what’s needed and then to craft scenarios that will shore up support whenever it becomes necessary. For instance, says Cavalancia, you could arrange a plan to lease pre-confi gured laptops to staff who may or may not need to work from home. Then you can structure your fees around ongoing costs and services rather than a single-solution project.
Identifying Critical AreasThere are several critical areas to investi-gate in order for businesses to remain up and running during a pandemic outbreak. Of course, each area depends on the other to be eff ective overall.
Identify key employees and vital functions. “For every key employee, most of what they do is not critical and can be delayed. So you must fi ne-tune the job and determine exactly what they do that makes them critical,” says Michael Miora,
a CISSPI-ISSMP certifi ed advisor and president of ContingenZ Corp. in Los Angeles. “Then, plan for how you will work around the loss or inability if one or more key staff can’t come to the offi ce.”
Communicate early and often. In contrast to one-time catastrophic events, say, a tornado or power blackout, a fl u outbreak will likely have rolling and extended impact. Employees may be in and out over several months. Some may become fatally ill. Early communication will reduce anxiety and head off rumors. “The fi rst step is to make sure the company actually has up-to-date contact info for all employees and outside contributors as well as an integrated system and protocols for reaching everyone,” advises Vicki Wheaton, employee communications manager at Varolii, an on-demand communications software provider in Seattle.
Work in advance to create guidelines that inform staff about preventive measures to avoid contagion, HR policies for leave or absences and company expecta-tions for job performance. “Off er ongoing targeted communications that enable people to know what the situation is, what they need to do, when they need to work from an alternate site, like home, who needs to perform which tasks and how long the situation will persist,” says Anyck Turgeon, chief of market strategy and security at Crossroads Systems Inc., a data-security provider in Austin, Texas. Remember to include outside team members, such as accountants and contractors, publicists and investors or crucial vendors.
Stay alert to compliance and regulatory needs. For instance, says Turgeon, “multi-mode communications are critical in case of emergencies, yet privacy standards must be met. So personalized messaging and communications may need to be created.” Plus, fi rms will need to be able to address
various constituencies in specifi c ways—board members will have diff erent concerns than customers. Businesses also will need redundant channels, including toll-free phone numbers, microsites or intranets, e-mail distribution, call-list protocols and the like.
Staying on the Right TrackEvery shop has diff erent priorities and procedures, but the goal remains straight-forward: Keep everyone in the loop and on the right track.
Evaluate and reinforce IT security and remote-work capabilities. Given how numerous, customized, secure and aff ordable telework and remote-access solutions have become, IT recommenda-tions may be the easiest part of any preparedness plan.
Which solutions you deploy or beef up will obviously be dictated by a customer’s remote-work needs, budget and sophistication, whether VPN ports, Webcam videoconferencing, VoIP, Microsoft SharePoint, Citrix terminals and its GoToMeeting, Salesforce.com or other virtual or real-time applications or proprietary products, as well as data protection and restore solutions. Providers put the average cost to a small business for a preparedness plan anywhere from $5,000 to $20,000, depending on what’s in place and what’s requested.
In any case, fourth quarter 2009 off ers unprecedented openings to talk to clients not only about preparing for the pandemic but also about business continuity and disaster recovery going forward.
Joanna Krotz is a freelance technology writer based in New York.
