Riding The On-Premises-as-a-Service Wave

By Kevin Liebl, Zadara Storage

Six ways service providers can better align their business model with today’s most in-demand data storage option.

It’s happening, just as futurists said it would. IT is being delivered with untold variations on the as-a-Service offering, much like water or electricity. Amazon Web Services may have been the first “Compute-as-a-Service” provider, but it didn’t take long for Microsoft Azure and Google Cloud Platform to follow, creating a $246 billion global public cloud-computing sector in the process. Likewise, networking, security, and data storage innovators have changed their sectors with as-a-Service offerings in a pay-as-you-consume business model enterprise IT buyers have shown they prefer over traditional CapEx purchases.

Most service providers view as-a-Service solutions as cloud solutions — as in the opposite of an on-premises offerings — since they are public cloud or external provider cloud-delivered resources. They are, or course, although private, hybrid, and multi-cloud options are plentiful as well. Yet there’s a renaissance in On-Premises-as-a-Service (OPaaS) options with appeal for both to the enterprise buyer and service provider itself.

Let’s clarify first off what On-Premises-as-a-Service is not. It’s not just Hardware-as-a-Service, though there is hardware. It’s not the provision of the full value chain for a flat monthly fee, such as Trains-as-a-Service or Home-Security as-a-Service, where it’s just modern term for lease or monthly contracted fee.

On-Premises-as-a-Service (OPaaS) offerings are OpEx based delivery of IT assets on a pay as you consume basis delivered in a true and simplified utility cost model with pay-as-you-grow pricing. They are an exceptional fit for today’s business environment for several reasons.

• CapEx purchases are dying. Industry analyst firm IT Brand Pulse predicts by 2020, 50 percent of storage purchases will be OpEx-based and three years later it will be as much as 80 percent.
• Agility, scalability, and elasticity are imperatives for business today.
• Reduced IT complexity is important since IT staffs are lean, deployed across an increasing number of systems, and relying on automation to handle the mundane so they can focus on business-impactful systems.
• Clouds are not one-size fits all. For some sectors, any form of asset off their premises is a non-starter.
• Data sovereignty laws as have emerged when enterprise operations offshore dictate the specific location of the asset to be accessed globally.

Why On-Premises-as-a-Service For Storage, And Why Now
The OPaaS concept has taken off, especially in data storage where the traditional storage purchasing cycle has grown particularly wearisome to enterprise IT managers who can’t plan their capacity needs for next six months, let alone in three- or five-year increments and whose CFOs are saying no more to CapEx purchases. Since September 2016, seven major storage vendors have debuted On-Premises-as-a-Service offerings, following upon a pioneering offering in mid-2014 that proved successful.

OPaaS installs physical storage onsite in customer data centers — just like traditional storage — but delivers enterprise Storage-as-a Service (STaaS) that eliminates up-front costs. It allows service providers to sell to those accounts for whom cloud is a scary word, and where rigorous compliance or data sovereignty demands make on-premises solutions a more practical choice.

Special Benefits For Service Providers
What’s often ignored are six key business benefits OPaaS provides to service providers who use the same storage as the foundation of their own product offerings, meeting customers’ demand for smarter, more agile storage too.

1. A cost model that reflects your business: Service providers can finally align the cost of their services to incoming payments. If the MSP gets a customer at 8 a.m., the MSP can provision the storage at 8:30 a.m. without any sunk costs sitting around idly just waiting to be used. It is able to move in agile way with the variations of winning customers and changing what is served to them as customers’ need change. No more overprovisioning of resources.
    
2. Enterprise-grade capabilities both that service providers use themselves, and that they deliver in the form of services to their customers: Enterprise customer expectations are rising and they know it’s possible to obtain quality of service (QoS) guarantees from cloud-delivered services just as they always have with on-premises deployments. The new generation of OPaaS offerings that are purpose-built for cloud environments can support strong QoS as well as enabling true multi-tenancy such that “noisy neighbors” don’t impact other service partners’ customers — advanced features can open doors to sizable accounts. Users should never give up enterprise features when moving to an as-a-service model.
    
3. Customer data privacy: By obtaining dedicated, isolated resources per user, the service provider’s customer gains control of where data resides, even in off-premises deployments. Offerings that enable data-at-rest and in-flight encryption (with user controlled-keys) can help assure customers their data remains secure and private.
    
4. Scalability suitable for a service provider: Solutions based on elastic, scale-out architectures enable service providers to easily right size initial deployment and seamlessly scale based on customer demand. Embedded, detailed metering and billing tools report on customers’ usage activity. With cloud storage scalability ranked as the number one wish list item of IT managers in 2017, the ready scalability of the OPaaS platform also allows service providers to meet this in-demand capability.
    
5. Simplified management for the service provider: since OPaaS solutions come as a complete managed service with monitoring, pro-active support, and hardware and software maintenance, including a clearly defined availability.
6. Lower cost, often dramatically so: Netrepid, a Harrisburg PA-based provider of colocation, infrastructure, and application hosting services, avoided a hefty CapEx purchase and downtime needed to upgrade its Dell EqualLogic storage array with an OPaaS solution that ended up reducing its hardware footprint by 81 percent, introducing significant power and cooling savings, and delivered 80 percent better performance. More importantly, the OPaaS deployment also dramatically improved the service provider’s agility in responding to clients since spinning up storage nodes now took minutes versus a week.

On-Premises as-a-service options allow the service provider to make a leap-change in efficiency with impact to the bottom line. For an increasing number of service providers, they are the cornerstone of a forward-looking business infrastructure.

Kevin Liebl is vice president of marketing for Zadara Storage, an enterprise storage-as-a-service (STaaS) provider.