SMS Is Hot, And The Demand Keeps Growing

Storage management software (SMS) is one of the hottest and fastest growing areas of the storage market. VARs that are becoming involved with SMS, storage resource management (SRM) products in particular, are garnering some good business opportunities with very attractive margins. We spoke with four storage software developers to find out what the hottest trends are in the SRM market.

Storage Assessments And Business Continuity Are On Customers' Minds
"Storage assessment and planning is one area of SRM where we have seen a lot of interest from VARs," said Stephen Donovan, president and CEO of TrelliSoft (Glen Ellyn, IL). "VARs are helping customers plan for the deployment of more storage, and at the same time helping them to make better use of the storage they already have. Storage assessment has been a hot topic over the last 6 to 12 months as end user budgets have become more constrained."

Another area of SRM that has been attracting a lot of attention over the last six months is business continuity and disaster recovery. Customers are looking for software solutions that will insure their environments are recoverable and their companies are prepared for disaster. VARs will play a large role in that planning. "With SRM products, a VAR can scan an enterprise infrastructure, which might have thousands of distributed servers located around the world, and determine what data could not be recovered in the event of a disaster," said Donovan.

Todd Deveney, VP of U.S. operations for QStar Technologies (Fort Walton Beach, FL), has also seen growing demand for SMS solutions since September 11. "Companies are clamoring for some type of backup or disaster recovery solution, particularly one that involves mirroring," he said. "The large enterprises have been mirroring their data for some time, but now we are seeing a lot of smaller organizations asking for it as well. They are not huge companies with millions of dollars to spend, but they still have to satisfy the requirement for a backup solution to protect their data."

Mirroring involves taking online storage and replicating it to another system. In high-end installations, the data is typically replicated to another location. The mirroring can be done from one computer room to another computer room in the same building, in a different building in the same complex, or to another building in another state.

Another topic of concern for customers is storage utilization. SRM products allow a VAR to go into a customer environment and determine how much storage capacity the customer has and how much is being used. "VARs will typically find that customers are wasting about 40% of the storage they have," said Donovan. "Customers are spending millions of dollars on storage hardware when half of the capacity they have is going unused. There is a growing business right now for VARs who can go on-site and help clients get a handle on their storage."

Allow Customers To Set The Rules
The final hot growth area in SMS is something called automated policy-based management. This refers to software that allows customers to manage their storage more efficiently. "SMS gives enterprise customers more choices and options in terms of planning their future storage needs and the technologies that allow them to address those needs," said William Caple, EVP for OTG Software (Rockville, MD). "This is in stark contrast to the old school of thought that involved throwing more disk at problems instead of having policy-based management associated with it."

Automated policy-based management simply allows customers to set the rules for the migration of their company's data. More specifically, the customer sets the policies that determine where data lives and when it should be moved from one type of storage (like RAID [redundant array of independent disks]) to a less expensive but more latent type of storage (like a library or jukebox). After the policy is set, the data is automatically migrated.

Policies can be based on how frequently the data is used or accessed. The user can also set thresholds for usage of memory, and thereby migrate data depending on how much disk space is available. "Automating the process eliminates the need for extra IT administrators," said Caple. "The solution pays for itself both in terms of unneeded hardware and administrators."

One use for this type of data migration would be a NAS (network attached storage) environment. VARs can expand a NAS appliance by adding an optical jukebox to it. By installing SMS on the NAS device, VARs can increase the capacity of the device and give it offline-tracking capabilities as well.

Start Your Own Services Business
Mark Milford, SVP and GM for the storage business unit at Computer Associates (Islandia, NY), believes VARs should consider building a whole business practice out of using SMS to provide services to end users. Milford gave one example of a service VARs can provide. A VAR might go into a customer environment where the client wants to move their storage into a SAN (storage area network) architecture. Typically customers need help accomplishing that task. "The VAR can load the software on the customer's system and discover all of their storage assets," he said. "The VAR can also determine the customer's storage utilization, redundancy, and the characteristics of their storage devices. Finally, the VAR will make recommendations on how the customer can more efficiently use the storage they have and design a new SAN infrastructure for them."

The aforementioned service is typically referred to as a storage assessment, and Milford believes it is a tremendous value-added service for VARs. "VARs can do the assessment and then take customers to the next step of being able to build an architecture for their future. There is a whole service wraparound involved with the assessment, and VARs can build a business practice around it."

Milford noted the profit margins on SMS software and the added services are 35% to 40%. The typical cost for a storage assessment ranges from $35,000 up to several hundred thousand dollars, depending on the size of the enterprise. Add in the architecture design, the planning behind it, and the actual implementation, and the revenue can add up quickly.

Deveney added that selling SMS is easy for VARs, considering that a lot of customers need the products and are not sitting back waiting for their VAR to make the sales pitch. "I have talked to many VARs that are getting calls from existing customers," he said. "Customers trust the VAR that they have been working with for years and will turn to them when they need this type of solution."