February 5, 2001
(Computerworld)
While technology service providers have long been talking about data storage as a utility that should be sold in the open marketplace like electricity or natural gas, little has been done to pool market resources to hawk surplus disk-array capacity.
But that's exactly what a subsidiary of Houston-based Enron Corp. is doing by launching a business-to-business exchange that it said will seek to match spare capacity owned by storage service providers (SSP) with corporate users who want to be able to quickly scale up and down the amount of storage they have available.
Enron Broadband Services last week announced that it has already signed a deal with Waltham, Mass.-based StorageNetworks Inc. and is negotiating similar agreements with at least six other SSPs. If successful, Enron's business proposition could go far toward generating a set of operating standards for the emerging SSP business, analysts said.
Opportunity for Vendors
John Clavin, executive vice president of marketing at StorageNetworks, said SSPs likely bear the cost of hooking up customers to data centers in order to rent out their excess storage. On the other hand, storage vendors, he said, will likely see Enron's proposition as an opportunity to sell off additional boxes to SSPs to supply the expanded market.
"It's a market with a mix of small and large players and companies that define their roles differently," said Ken Weilerstein, an analyst at Gartner Group Inc. in Stamford, Conn. Enron's plan could also help enterprise-level users get additional benefits with the storage capacity they're renting, such as security and disaster recovery support, he added.
Ravi Thuraisingham, director of global bandwidth risk management at Enron Broadband, said the new offering won't include additional security features.
But Enron does plan to standardize on a set of SSP services and bundle them with disaster recovery and bandwidth capabilities, he said.
Initially, Enron expects to charge users monthly fees of $25 to $55 per gigabyte of managed storage, depending on market conditions and the length of time a company expects to need the capacity.
"We're there to try to discover a market-clearing price," said Thuraisingham, adding that the service is tentatively due to go online in the third quarter.
Enron said it has already signed Eden Prairie, Minn.-based Best Buy Co., one of the leading retailers of consumer electronics, computers and software in the U.S., to buy the storage capacity it needs to support a customer relationship management application through StorageNetworks.
Connecting users such as Best Buy to available storage could take from three days to three months, said Thuraisingham.
Under Enron's plan, storage capacity owned by participating SSPs will be connected to an existing network of switching hubs set up to pool bandwidth resources.
Enron said it has 18 switching centers, or "pooling points," in the U.S., and another seven overseas that can be used to monitor storage transactions between buyers and sellers.
 |
|||
Enron Services
|
Enron, a $101 billion Houston-based energy corporation, last year introduced the concept of trading bandwidth capacity.