Selling The Right Automated Storage Software

In the late 1980s and early 1990s, storage hardware prices were high and the cost of storing data was expensive. In an effort to cut this cost, many companies installed specific software to more effectively manage their data. This HSM (hierarchical storage management) software migrates infrequently-used files from an expensive storage media (hard disk) to a more cost-effective media (optical tape). Even though storage costs have plummeted since the early 1990s, there are still opportunities for VARs selling HSM software.

Decrease Total Cost Of Ownership
The cost of storage per megabyte is not as big a concern as it was a decade ago, says Robert Weiner, vice president of product marketing at OTG Software (Bethesda, MD). His company has 100 employees and manufactures mass storage, COLD (computer output to laser disk) and imaging software. According to Weiner, VARs should be selling HSM software as a method for companies to reduce their total cost of ownership of a system. "In most companies, files are stored on a server and are not deleted with any regularity. The files build to a point where the company has to invest in more hard disk space," says Weiner. "Some companies have policies in place to encourage their employees to delete infrequently-used files, but these policies are seldom followed." He says the cost of more hard disks and manually managing data increases the total cost of ownership of a system. HSM software reduces the cost of ownership, because it automates the storage management process.

HSM Software - Only For High-End End Users?
The increased storage capacity of some hardware devices has reduced the need for traditional HSM software, contends Kevin Drumm, vice president of marketing at Kofax Image Products (Irvine, CA). Kofax develops and supplies application software and programming tools for the document management market. The company has 150 employees and posted $30 million in gross sales in 1997. He says the traditional definition of HSM software includes the migration of data from hard disk to optical disk to tape. "Companies used to use a three-tiered storage method, but I am not seeing much of that today," states Drumm.

"An end user can buy a jukebox with a terabyte of storage capacity for a reasonable price. A jukebox with that amount of storage is sufficient for most companies. The only reason to use HSM software is if a company has storage requirements significantly greater than a terabyte," explains Drumm. "And that is a very small percentage of end users."

An Alternative To HSM Software
According to Drumm, VARs selling HSM software to manage imaging applications, should consider selling storage management software. "Storage management software migrates files from hard disk to an optical jukebox located on a network. The jukebox looks like a drive letter to the user," explains Drumm. HSM software also allows storage devices to appear as a drive letter for users. However, HSM software stores data on three different media as opposed to two.

In addition to migrating files, Kofax's storage management software also allows users to increase the performance of their jukebox. "For imaging applications, storage management software not only migrates infrequently-used files, like HSM software. Unlike HSM software, users can also migrate files from one media to another based on information contained within the files," states Drumm. For example, a company could migrate all invoice files.

Automation Saves Money
Despite the increased capacity and reduced cost of storage devices, Weiner says HSM software is still important to end users with large storage requirements. "Large organizations have capacity planning groups to manage stored data. These organizations are trying to automate their storage management to reduce costs," states Weiner. He says VARs should determine how much an organization is spending to manage storage and compare that cost to the price of integrating HSM software. "The difference between the two costs is usually substantial," adds Weiner. "HSM software is an easy concept to pitch to large companies. Also, the margins on the software range from 30% to 50% depending on the relationship between a VAR and software manufacturer."