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Liz McMillan

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ParaScale Forecasts Cloud Storage Opportunities

Cloud applications, computing, and storage are just emerging on the scene, yet there is a rapid heightening of interest

Cloud applications, computing, and storage are just emerging on the scene, yet there is a rapid heightening of interest in all things cloud. Google and Amazon popularized the concept, now businesses of all sizes and types are interested in its potential. With the availability of cloud storage-enabling solutions, many service providers and hosting companies are investigating new cloud storage service offerings.

“Tier1 quantifies the cloud service market to be $300M in 2009 and growing at a compound annual growth rate of 100% over the next three years,” said Analyst Antonio Piraino. “I estimate the cloud storage services opportunity to be 40-60% of this market, and consider it the low-hanging fruit amongst cloud services and the quickest for MSPs to deploy.”

Sajai Krishnan, CEO of ParaScale, a start-up company developing cloud storage software, believes the impact of cloud technologies will be transformational and cloud will be a major way by which IT is consumed in the future. For service providers, this presents tremendous opportunity, as well as challenges.

Krishnan asserts that the public cloud storage service provider market is beginning to segment. Segment one includes the mass-market cloud service providers like Amazon S3, Google, Rackspace, and a few others. Segment two consists of the sophisticated enterprise cloud service providers who are rapidly creating new services that are combining virtualization, multi-tenant storage cloud and compute cloud service and private hosted clouds. Segment three is comprised of the giant telcos such as AT&T, Verizon Business, and Deutsche Telecom.

“Most manage hosters and service providers will need to determine their strategy for winning business in the second segment of contenders,” said Krishnan. “While the cloud services market is going to provide upside for many years, service providers must have a well thought-out entry strategy to succeed. Surprisingly, a number of mid-sized new entrants are considering a “build and they will come” approach and launching into segment one. This is a recipe for a “build and you will get run-over” scenario, as the goliaths of segment one already have first mover advantage and tremendous economies of scale.”

Business Questions To Ponder As Service Providers Consider Offering Cloud Storage Services
Krishnan identifies several considerations for service providers and managed hosting companies as they develop their cloud storage services offering. These include:

  • Evaluate your customers and their data needs.
  • What amount of data do you intend to store for your customers?
  • What sustainable differentiator should you base your business on?
  • What cloud services are already available and how will you compete?
  • If you succeed, is the business and architecture going to scale?

Cloud Storage Technology Factors To Consider
Regardless of how the service provider answers the above business questions, the systematic approach to evaluate cloud storage technologies remains the same:

  • A cloud storage solution has three key parts. Research the options to ensure a full storage cloud solution.
  • Choose a cloud solution that can start small with a few TBs and scale up.
  • Avoid proprietary interfaces and APIs.
  • Determine if your preferred cloud storage solution can offer data access via familiar enterprise protocols.
  • Do you have an opportunity to offer differentiated cloud storage integrated application services? Can your cloud storage platform help you deliver this high value service?
  • Cloud is about scale. Ensure that your cloud data access protocol can scale as your business grows.
  • Always perform a proof of concept within your own environment.

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