Service Providers: How Storage Infrastructure Can Help You Differentiate and Add Value to Your Cloud Storage Services

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1 Service Providers: How Storage Infrastructure Can Help You Differentiate and Add Value to Your Cloud Storage Services A Product Brief Sponsored by IBM May 2014

2 Storage Infrastructure Helps Differentiate and Adds Value to Cloud Storage Services INTRODUCTION Cloud storage is one of the broadest and fastest growing categories of cloud services. In response to customer needs, many cloud service providers have launched Storage as a Service offers that provide customers with storage capacity on demand, to support both premises-based and cloud applications. In addition, providers are beefing up the storage options associated with their other cloud services, such as Compute as a Service, Platform as a Service, and Software as a Service. Cloud-based backup and recovery represents yet another storage-related opportunity for providers to bring in new customers, and retain and grow existing customers. However, launching cloud storage services that deliver both value to the customer and profitability to the provider requires more than a vision. If your storage infrastructure is not engineered to handle the high volume and rigid availability requirements of your clients, your storage service will not be successful. Furthermore, because your clients will need to integrate your storage services with their own compute and storage environments, your storage infrastructure must interoperate with leading cloud and virtualization platforms. Finally, in an increasingly crowded cloud service market, the right infrastructure can provide the added value that can help you differentiate your storage services from competitors. In this paper, we examine customer expectations regarding cloud storage, and how your choice of infrastructure impacts your ability to deliver on those expectations. We show how the infrastructure can help you differentiate your service and create value for your clients. We provide tips on selecting the right storage infrastructure one that will help you address your clients evolving and demanding needs for storing, protecting, and accessing their data. Finally, we take a look at how IBM XIV Storage can address the needs of service providers, and how it has proved to be the right infrastructure choice for a successful service provider. STORAGE GROWTH BRINGS OPPORTUNITY FOR SERVICE PROVIDERS Just a few years ago, most businesses considered storage to be a non-strategic (though necessary) investment. Today, thanks to ongoing technology innovations in areas such as big data analytics, social media, and e- commerce, data storage and its management have become critically important to businesses of every size. Furthermore, heightened customer expectations about data access, and increasingly stringent and changing regulations concerning proper data storage have increased the cost, complexity, and the headaches associated with traditional on-premises storage for many businesses. Such trends have raised the profile of storage, as well as the pressures on IT. Not surprisingly, in a 2013 Frost & Sullivan survey of IT decision-makers, concerns about data storage growth ranked as a top data center challenge, cited by 31 percent of respondents. 31% of IT decision makers cite data storage growth as a top data center challenge. For many of these IT decision-makers, the answer to this challenge lies in the cloud, and they have high expectations regarding the benefits the model will deliver. As shown in Figure 1, criteria driving the cloud 2

3 Stratecast Frost & Sullivan decision include expectations of operational efficiencies (lower costs, reduced maintenance burden) as well as enhanced responsiveness (greater agility, scalability). In essence, businesses turn to cloud both to reduce the strain IT is feeling today, in budget and resource allocation, and to prepare IT to meet business goals related to speed-to-market and agility. Figure 1: Businesses expect cloud solutions to make IT more efficient and responsive Percent of IT decision makers rating drivers as "very important" to the cloud decision Reduce costs Improve disaster recovery plan Reduce maintenance burden Improve IT flexibility/agility Improve scalability of infrastructure 60% 56% 53% 52% 46% Shift from capital to operating budget 32% 0% 10% 20% 30% 40% 50% 60% 70% Source: Frost & Sullivan For service providers, customer challenges represent opportunity. In the next two years, the number of businesses that will implement a cloud solution for Tier 1 storage will increase by 33 percent. Through 2017, U.S. cloud storage revenues will increase by 66 percent compound annual growth rate, according to Frost & Sullivan research a rate that exceeds cloud computing growth. In the next two years, the number of businesses that will implement a cloud solution for Tier 1 storage will increase by 33 %. With such high growth predicted for the cloud storage market, service providers can easily be tempted to jump into the game with little forethought, hoping to capture some quick revenue. They may build their storage infrastructure from whatever components are already in the data center, or that can be acquired cheaply; overlay a generic management platform; produce a brochure; and roll out a cloud storage service. 3

4 Storage Infrastructure Helps Differentiate and Adds Value to Cloud Storage Services However, in the nascent cloud market, not all providers will succeed, even as the overall market grows. Business customers have proven to be cautious in their approach to cloud storage services, trying out multiple providers with just a handful of workloads or databases. Only when they find a provider that earns their trust will they stop dabbling and incorporate the cloud storage as a meaningful component of their storage strategy. The cloud storage providers that meet their customers needs will enjoy continued revenue growth. The remaining providers will have to improve the perceived value of their services if they want to attract more than a couple of test workloads. U.S. cloud storage revenues will increase by 66% CAGR through 2017, exceeding the growth rate of cloud computing. In truth, customers are continually weighing your storage services against your competitors, as well as against their own expectations. The most common places where cloud storage providers fall short are in areas related to security, compliance, reliability and performance. Figure 2: Businesses are concerned about security, compliance, and performance of cloud storage services Percent of IT decision makers rating criteria as important to the decision not to use cloud for one or more workloads Concerns about security 82% Inability to meet compliance requirements 77% Unreliability of cloud centers Poor/inconsistent performance Loss of control over my applications Concerns about provider lock in 74% 73% 72% 70% 60% 65% 70% 75% 80% 85% Source: Frost & Sullivan In essence, customers are presenting a clear mandate to cloud storage providers: If you do not meet our expectations, we will go elsewhere or we will stick with traditional storage models. The good news for cloud storage providers is that most enterprise concerns can be addressed, at least in part, by selecting the right storage infrastructure. By implementing a powerful, resilient infrastructure, the provider can position itself to meet customer expectations, not only today but as storage needs grow and intensify in the 4

5 Stratecast Frost & Sullivan future. The right infrastructure can help the provider differentiate itself from competitors. For example, when the infrastructure can be trusted to deliver consistent performance, the provider can develop industry-leading service level agreements. When the infrastructure can be trusted to handle data securely, the provider can pursue compliance certifications. Furthermore, the right infrastructure will also minimize costs, thus enabling the provider to build and sustain a healthy, growing, and profitable cloud storage business. CHOOSING THE RIGHT CLOUD STORAGE INFRASTRUCTURE A cloud storage environment must operate optimally, supporting efficient capacity utilization, and simplified operations and management for the provider; as well as highly available and secure access to and protection of data for customers. But cloud storage environments do not stand alone; every client needs the cloud storage environment to interoperate with applications or backup and recovery solutions that may be built and hosted in other virtualized or cloud environments. As a result, the cloud storage environment must also offer streamlined integration with leading cloud and virtualization platforms, such as VMware, KVM, Microsoft Hyper-V, and OpenStack. Building any data center infrastructure is capital-intense, and therefore, providers must carefully invest in a way that will deliver maximum returns. To provide services that are resilient, robust, and cost-effective, providers should look for storage systems that meet five primary criteria: predictability, resiliency, simplicity, costeffectiveness, and integration with other cloud environments. Predictability When enterprise customers entrust their storage workloads to you, they expect consistent performance regardless of the number of customers, volume, and types of workloads sharing the cloud infrastructure. To reduce the chance of unpleasant surprises, choose storage infrastructure that can accommodate variable and growing workloads without a degradation of I/O performance. Sophisticated functionality such as auto-scaling, self-tuning (or better yet, no need for tuning), and load balancing will help ensure consistency while reducing manual labor costs. With a strong infrastructure that delivers predictable performance, you may choose to differentiate your services by offering attractive service level agreements for elements such as performance and availability. Resiliency and Security Your customers rely on data to run their business. Critical business applications may require continual access to databases from multiple sources. Compliance with industry best practices and data privacy requirements may require strict handling. For such critical workloads, your customers will accept no excuses, nor storage or network downtime, even for routine maintenance. They also require assurances that their data is secure in your hardware and networks a particular concern in a multi-tenant environment. In building your cloud storage service, you need to ensure that your infrastructure supports the levels of security and uptime your customers require, and that logically isolates customers workloads from one another. The storage configuration should be resilient enough to allow customers to choose the appropriate availability levels, self-healing to allow for continued operations should any component fail, and scalable to allow seamless capacity expansion without retuning or manual intervention. 5

6 Storage Infrastructure Helps Differentiate and Adds Value to Cloud Storage Services Simplicity For overworked, under-resourced IT departments, driving complexity out of operations is a key objective. For thin-margin cloud storage providers, it is essential. Therefore, it is imperative to implement a cloud storage infrastructure that leverages automation, standardization, and open standards to simplify operations. For customers, who are already managing legacy storage environments, this means allowing them to continue to use the tools and platforms they are familiar with, by ensuring that your infrastructure management platform supports open standards. For end-users, who may range from storage professionals to line-of-business users, this means allowing them to configure and deploy their own workloads via an intuitive and powerful user interface, thus providing them with the control they want. Simplicity also benefits the service provider. An infrastructure platform that automates deployment and scaling reduces operational costs and time-to-deploy. Management and maintenance tasks can be streamlined with a powerful platform that provides visibility into as many aspects of your cloud environment as possible: for example, customer accounts, infrastructure utilization, component-based trouble-shooting, facilities management, financial and billing operations. Look for an easy-to-use system that supports high levels of granularity into your storage cloud s operations, including analytics based on real-time data. Cost-Effectiveness In the volatile and new cloud market, many cloud service providers have yet to see a return on the significant capital investment they made in building out data centers. Furthermore, low market-driven prices restrict what many providers feel they can charge for their storage services. With potentially thin margins (especially as you are growing your business), it is extremely important to build a cloud storage environment that is as cost-effective as possible. Here are some things to consider in evaluating the cost-effectiveness of storage systems: Pay-as-you-grow Select a modular or easily expanded storage system that will allow you to start with an affordable solution, and quickly expand capacity as needed. This will allow you to align capital costs with revenue. System efficiency Look for a system that maximizes usable capacity, while minimizing energy consumption. This increases revenue and decreases operating costs per system. Minimal technical resource requirements Look for an integrated platform that reduces deployment time, and minimizes maintenance requirements. This will allow you flexibility in aligning your technical staff with business-critical projects. Integration with Cloud Environments Today, nearly every business supports a heterogeneous IT environment, comprising a combination of onpremises and remote, customer-managed and hosted, dedicated and shared, public, private, and hybrid cloud resources. While many of these environments are managed separately today, businesses expect to reduce that complexity in the future, and enable seamless interoperation across multiple environments. Their expectation is not only that data can move seamlessly across environments, but also that common management tools will provide visibility across the various models. For providers, the right infrastructure can help meet that expectation. The storage infrastructure should be engineered to work optimally with the leading cloud and virtualization platforms, thus ensuring highest performance levels, while also minimizing time- and labor-intensive testing and tweaking each time the software or hardware is refreshed. 6

7 Stratecast Frost & Sullivan WHY CONSIDER IBM XIV STORAGE SYSTEM FOR YOUR CLOUD STORAGE INFRASTRUCTURE As a leader in the cloud industry, providing a full portfolio of services, software, and products, IBM is uniquely positioned to offer cloud storage solutions that can help service providers succeed. In selecting storage infrastructure, cloud storage providers would do well to consider the IBM XIV Storage System, which delivers high levels of value across the key criteria. Predictability The IBM XIV assures consistent performance by scaling seamlessly as capacity expands. The modular grid structure allows you to add storage as needed, without disruption. Furthermore, XIV storage is engineered so that it is always optimally tuned, which means that customers experience highest levels of application performance. XIV s architecture enables storage performance to scale linearly with capacity growth. As the workloads are added, performance remains predictably high. This is not the case with many traditional systems, which are based on older architectures that are not aligned with the cloud model. As a result, with XIV you can confidently offer attractive service level agreements to your customers. Resiliency and Security IBM XIV is architected to provide five-nines ( percent) availability. Key system components, including disks, modules, switches, host connectivity, and power systems, are fully redundant, ensuring continued operation even in the event of a component failure. Furthermore, the system provides proactive self-healing to reduce downtime and system interruptions. XIV multi-tenancy brings flexibility and simplicity to management of tenant data and storage resources across multiple XIV systems, providing secure division and isolation of storage resources among numerous customers. The XIV also offers flexible data encryption solutions to product customer data. Simplicity With IBM XIV, a simple management interface gives you access and visibility into powerful functionality. Storage can quickly be provisioned and de-provisioned, allowing you to optimize hardware utilization. When you deploy the easy to use IBM Cloud Storage Access self-servicing portal, developers can quickly provision their own storage (such as for testing a new application), and administrators can easily monitor and report storage usage for chargeback purposes. Cost-effective The IBM XIV system helps service providers maximize their capital investment by offering energy efficiency, high density, and optimal capacity utilization per system (above 95 percent). In addition, the system helps providers reduce labor costs by staying optimally tuned allowing for simple scaling, fast deployment, and low management and maintenance costs. With XIV storage, petabytes of data and tens of XIV frames can be managed by a single employee. Furthermore, IBM offers attractive pricing and payment systems for service providers, including the Advanced System Placement program, with flexible terms that allow providers to pay for the system only after they reach a certain capacity. This allows service providers to align capital expenses with their revenue, allowing them to build their cloud storage business without a burdensome upfront investment. Additionally, the IBM Global Financing is also an option for those service providers that are interested in predictable payments and want to control their cash-in and cash-out positions. Integration IBM XIV can help your cloud storage service to fit seamlessly into your customers own cloud strategies. The system integrates with the most common hypervisors, including VMware vsphere, Microsoft Hyper-V, Citrix XenServer, as well as KVM, thus enabling automation and elasticity for customer applications running in those environments. In addition, XIV s grid architecture, and ever-balanced autonomic data placement deliver consistently high performance that other storage infrastructure solutions may struggle to deliver in a variable-workload cloud environment. XIV s support for the IBM Cloud Storage Access portal also fits into your 7

8 Storage Infrastructure Helps Differentiate and Adds Value to Cloud Storage Services customers cloud environments, enabling authorized users to provision and manage their storage through a fully automated self-service portal. IBM XIV storage implements application programming interfaces (APIs) for integration with VMware tools, including vstorage, vsphere Web Client, and VMware Site Recovery Manager. This provides customers with the flexibility to further integrate XIV into their existing virtualized or cloud environment. The integration of XIV and VMware is particularly important to note because of VMware s prevalence in enterprise and service provider data centers. XIV's exceptional architecture, as well as its deep integration with VMware products, benefits service providers and their customers with consistently high performance, ease of use, and a low total cost of ownership. AN IBM XIV CASE STUDY: ENFO Finnish-based ENFO, a leading provider of IT services in the Nordic region, knows how important storage infrastructure is. With a data center service portfolio that ranges from co-location to cloud to full outsourcing, the company hosts 4000 servers, and supports over 40,000 end users. For many of its customers, especially in the mid-markets, ENFO serves as the virtual CIO, recommending, configuring, and managing the right combination of services and performance levels to meet the customer s business needs and budget. To support them, ENFO has built a modular service catalogue with over 100 different service elements that can be integrated, delivered, and managed on a customized basis without the high price tags associated with customized services. So what kind of infrastructure does it take to deliver cloud storage services successfully? For ENFO, the answer is the IBM XIV Storage System. In considering infrastructure options, the company focused on resiliency as a top criterion, reasoning that a storage failure could immediately impact all its customers. With redundancy of key components engineered into the system, IBM XIV is able to self-heal from component-level failures, without service disruption without requiring ENFO to store spare parts on premises. With each customer solution comprising multiple service components, ENFO requires predictability in service delivery. Predictable performance ensures that customer commitments and service level agreements are met, regardless of overall capacity utilization. IBM XIV supports predictable I/O and application delivery through automated scaling and auto-tuning. In addition, ENFO requires a powerful yet simple management platform. To maintain quality and efficiency in service delivery, the company monitors storage performance, utilization, and costs on a per-component basis, as well as solution-wide. Flexible IBM management tools offer the needed visibility into the entire environment. With IBM XIV as the foundation, ENFO is able to deliver cost-effective, reliable cloud storage services that its customers can depend on a sure recipe for success. For more information about IBM XIV Storage System, click here. 8

9 Silicon Valley 331 E. Evelyn Ave., Suite 100 Mountain View, CA Tel Fax San Antonio 7550 West Interstate 10, Suite 400 San Antonio, Texas Tel Fax London 4, Grosvenor Gardens, London SWIW ODH,UK Tel 44(0) Fax 44(0) GoFrost ABOUT STRATECAST Stratecast collaborates with our clients to reach smart business decisions in the rapidly evolving and hypercompetitive Information and Communications Technology markets. Leveraging a mix of action-oriented subscription research and customized consulting engagements, Stratecast delivers knowledge and perspective that is only attainable through years of real-world experience in an industry where customers are collaborators; today s partners are tomorrow s competitors; and agility and innovation are essential elements for success. Contact your Stratecast Account Executive to engage our experience to assist you in attaining your growth objectives. ABOUT FROST & SULLIVAN Frost & Sullivan, the Growth Partnership Company, works in collaboration with clients to leverage visionary innovation that addresses the global challenges and related growth opportunities that will make or break today s market participants. For more than 50 years, we have been developing growth strategies for the Global 1000, emerging businesses, the public sector and the investment community. Is your organization prepared for the next profound wave of industry convergence, disruptive technologies, increasing competitive intensity, Mega Trends, breakthrough best practices, changing customer dynamics and emerging economies? Contact Us: Start the Discussion For information regarding permission, write: Frost & Sullivan 331 E. Evelyn Ave. Suite 100 Mountain View, CA Auckland Dubai Moscow Silicon Valley Bahrain Frankfurt Mumbai Singapore Bangkok Iskander Malaysia/Johor Bahru Oxford Sophia Antipolis Beijing Istanbul Paris Sydney Bengaluru Jakarta Rockville Centre Taipei Buenos Aires Kolkata San Antonio Tel Aviv Cape Town Kuala Lumpur São Paulo Tokyo Chennai London Sarasota Toronto Colombo Manhattan Seoul Warsaw Delhi / NCR Miami Shanghai Washington, DC Detroit Milan Shenzhen

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