Every company, big or small, has a growing storage problem -- the problem of growing storage. Hosted storage services, which take the problem away from the customer and put it in the hands of the solution provider, have become an increasingly popular option for many customers and solution providers alike.
By submitting your personal information, you agree that TechTarget and its partners may contact you regarding relevant content, products and special offers.
The worldwide market for managed services will more than double, from $44.4 billion in 2007, to $94.9 billion in 2011, according to reporting from Insight Research.
The market for storage software -- which paces the growth of storage services -- has grown every quarter for more than three-and-a-half years, including 8.3% growth to $9.8B in 2006 alone, according to IDC.
But channel companies bent on trying to satisfy that demand face more than the technical challenge of building a storage network that's cost-efficient, easily configurable, and available 24x7/365.
They have to find the right customers, the right services and, most important, the right pitch. "We have had to retrain our sales force," said John Maxwell, vice president of marketing for MTI Technology, a storage service and solution provider in Irvine, Calif. "It's not like going out and taking orders -- you have to focus on the consultative selling process."
Pitching the right customer
Unlike products or solutions, selling services means asking customers to take an unfamiliar approach to an old problem, and to trust someone else with data on which they may feel their business depends.
That means picking the right kinds of organizations to pitch, and the right person or people within the organization.
"We most frequently approach the IT decision maker," according to Bryan Doerr, chief technology officer at SAVVIS, a managed service provider in St. Louis. "There are other decision makers though. The CFO is getting more aware of, concerned about and confident about probing more deeply around the cost of the IT solutions to the business."
Small and mid-sized companies tend to be good candidates for storage services because they often have only two or three people in IT who are responsible for everything, rather than having one group solely responsible for storage, according to Brian Reagan, executive vice president and chief marketing officer for Arsenal Digital Solutions, a provider of storage management services in Cary, N.C.
"[Managed storage] is more cost effective than lots and lots of storage disk frames, is easier to manage and, due to ways we can protect it, is secure," said Lynn Granger, senior manager at VeriCenter, a Houston, Texas-based company that provides centralized storage and backup services. "The main benefit is that, especially when you get into something more than SAN-based storage, there is a lot more complexity involved than many in-house IT departments have. That's where we add expertise."
A small staff of generalists will also be far more interested in managed services than a specialized group just looking for ways to save money on storage, according to Alice Quinn, vice president of sales and marketing at IPR International, a vendor of backup, recovery and archiving solutions in Conshohocken, Pa.
"The midsize enterprises have the rules and regulations of the enterprise but don't have deep pockets so they are more likely to outsource and let go of the problems," Quinn said.
Even larger IT groups may be willing to sign up a service provider that can make it easier to support remote offices that don't have their own IT people, or a workforce whose storage needs and location are unpredictable, Reagan said
"We've seen a real uptick [in storage-services deals] in the last year to 18 months, a growing recognition of the problem of supporting remote sites, not just from location standpoint but also as in mobile workers," said Reagan.
Transparency builds good relationships
Even customers of long standing will have new concerns about reliability and control when they consider a new service, however, not to mention worries about cost -- concerns that have to be addressed in the first phase of the sales cycle.
"Many [clients] believe they can do it in-house for a lower cost," according to Paul Fried, vice president of storage and data services at IBM in Poughkeepsie, N.Y. They worry about a loss of control especially when it comes to storage and data. And naturally they will worry about whether the proposed solution will meet their business needs."
Security often tops the list of customer concerns that solution providers must address. "First and foremost, customers want to know how their data is going to be protected," Doerr said. "They want to know, if they are going to be on a shared device, what kind of air gap exists logically between them and the other clients in the storage environment."
"They ask 'Can I get info when I need it? Can I control when it is protected, backed up or replicated? Do I have quality measures and reports? Can I show my management team that I've made a good decision?'," according to Matt Wight, senior vice president of business development at Incentra Solutions. "It used to be about functions but know it's about how well you are doing it and the metrics."
Customers also want to know that outsourcing their storage will provide measurable improvements that they can demonstrate to upper management, Wight said.
The only way to address those concerns is to give the client as clear a view as possible of the provider's operation, Doerr said. Clients want to know how data is being backed up and what kind of reporting is available so they can make sure everything is happening in a timely way, he said.
"There's a level of trust necessary to get in the door and once you are performing well, you build trust every day," Wight said.
In managed-storage services, "the relationships aren't transaction based," Wight said. "The model that storage service providers offer really is about relationship and set of complex ongoing solutions."
Solution providers "have to handle a multi-year experience, a very long-term relationship, Fried said. "Over five to 10 years, that client is going to entrust their business and data center over to [the solution provider.]"
Click here to read part two of this story: One good deal nets another.