Outsourcing Anxieties

Tony Merolle, a senior data center manager at Symbol Technologies Inc., a $1 billion bar-code system manufacturer, says he doesn't worry that the HP 3000 legacy system in his company's Bethpage, N.Y., data center will have a major meltdown. Hewlett-Packard Co.'s Recovery Support Services' trauma team has rehearsed the disaster recovery drill - bring the backup tapes from Arcus Data Security Inc.'s vault in Boston to the hot site in Valley Forge, Pa., and begin restoring about 110GB of data on an identical HP system. HP's dry runs have restored the production system in less than seven hours. But Merolle says Symbol expects to enhance some of its current storage applications through outsourcing arrangements. And though he says he doesn't worry about disasters, Merolle acknowledges worrying about the accessibility of the data. One option calls for backing up the data center servers online to similar servers at a remote hot site - either owned by Symbol or maintained by a third party.

Pay-as-you-go storage also appeals to Symbol as a way to complement an 8-terabyte (TB) EMC Corp. Symmetrix system.


Look Before You Outsource Storage

Some CIOs and chief technology officers may hesitate about outsourcing storage, but they don't mind giving advice about how to select a storage outsourcer. Here are some of their tips.

John Brighton, CIO, Aetna Inc., Hartford, Conn.:

• Precisely define the systems' requirements for availability, reliability and services.

• Place your environment with a company that stands with you, has both solid technical and financial strengths and can change with your needs.

Hugh Hale, director of technical services, Blue Cross/Blue Shield of Tennessee in Chattanooga:

• Don't just meet the service's staff. Get their resumes and review their qualifications.

• Service-level agreements should focus on application reliability and response time.

Jonathan Harper, CTO, FundsXpress Financial Network Inc., Austin, Texas:

• Get all schedules for administrative tasks, such as backups, written into your contract.

• For storage on demand, forecast your capacity needs by time periods. Give the schedule to the service so it can plan its space allocation.

• Determine how much it's going to cost your staff to oversee the service.

"We're talking to vendors such as HP, Dell and EMC about storage systems configured for the disk space we need at a particular time. We'd just pay for what we use," says Merolle.

However, outsourcing for an SAP AG application didn't show much promise. Merolle says some of the information technology executives looked at Qwest Communications International Inc. in Denver. "We require a response time of no more than 1.5 seconds per SAP transaction. I want to get it below a second," he says. Qwest offered a 6-second-per-transaction guarantee.

IT professionals at Fortune 2,000 organizations are taking a hard look at storage outsourcing services, ranging from on-demand, on-site virtual utilities to remotely managed, pay-per-gigabyte services. But many of those IT staffers are kicking these services' tires and then walking away - at least for now. Many of them say they can do a better job managing storage for bread-and-butter applications than a third party can. And they say they don't want to give up the control and security of on-site storage. Meanwhile, some storage outsourcers and systems integrators are quietly making inroads into many organizations' on-site storage operations.

Glenn Jacobsen, a senior partner at the Trilliant Group, a Cincinnati-based firm that assesses storage technologies, says, "We haven't seen any movement or desire from our Fortune 500 clients to outsource any storage operations to an [outsourcer]. Our clients don't want to give up total control of their data to a third-party wire miles away."

Outsourcing may provide IT executives with an option when they face the need to mold an unruly band of disparate servers into a well-managed, scalable storage infrastructure.

Like a lot of insurance companies, Sun Life Financial Services of Canada Inc. has given business units the go-ahead to buy the most cost-effective storage, says Laurence McKenzie, Sun Life's vice president of worldwide technology and strategy, who works out of the Canadian firm's Wellesley, Mass., office. The result for Sun Life, which manages $225 billion in assets, consists of a 7TB collection of about 100 Windows NT and NetWare file and print servers, and about 150 development servers. Distributed storage growth runs about 30% per year. In contrast, mainframe storage on an older EMC Symmetrix remains stable with less than 1TB.

Working with the CIO at Sun Life's home office in Toronto, McKenzie has begun to consolidate the distributed servers into a scalable storage infrastructure managed by a central entity.

"We need better data protection for backups and disaster recovery, as well as to cut the windows for these functions," he says. While McKenzie won't go into detail about Sun Life's plans, he says some of his research has focused on storage outsourcing.

"StorageNetworks, which offers on-demand storage, did a nice consulting job of helping us to understand our key problems. However, we aren't ready to put any storage off-site," he says.

McKenzie has also looked at Storability Inc.'s on-site service. For a service-per-gigabyte charge, the Southboro, Mass.-based start-up will configure and lease the on-site storage and manage it remotely using off-the-shelf tools. Storability has no access to corporate data.

"These folks say they can leverage part of my installed base with a new storage offering. This mix would make my mature storage more reliable," says McKenzie, who adds that although he's intrigued by this offering, he prefers to keep his outsourcing options open.

Where the data resides in relation to applications can be critical to the IT infrastructure, so keeping the storage systems with their Sybase Inc. and IBM DB2 servers will remain the norm for Blue Cross/Blue Shield of Tennessee in Chattanooga. Hugh Hale, director of technical services at the health insurer, may help IBM evaluate its new products and services, but he says he won't consider an outsourcing arrangement with IBM. "We have the staff to manage our database applications and storage better than anyone else. Outsource if you can't get the resources to do it yourself," he says.

Storage outsourcing may offer more firepower than even a Fortune 1,000 firm needs, or it just may not mix well with the way it does business.

Wendy's International Inc., a $5 billion fast-food chain, serves millions of burgers each year, but its corporate data center manages a lean 550GB of storage, and 300GB of that is mainframe storage. "We don't have enough storage growth to warrant outsourcing any of it," says Ed Ohanian, director of enterprise technologies at Wendy's in Dublin, Ohio. "I haven't bought any mainframe disks in 18 months."

R. R. Donnelley & Sons Co., a Fortune 1,000 commercial printing firm in Chicago, maintains a close relationship with its clients, including Harvard Business School Press, publisher of the Harvard Business Review. Each step of the prepress process at an R. R. Donnelley plant consists of having data readily available from on-site, high-performance storage repositories.

"When we go to put ink on paper, time is of the essence. Taking the storage outside of a plant's control would put us in a bad position. How would we meet a publisher's requirement if something goes wrong? We'd be dead in the water," says Kirk Brauch, the prepress technology consultant at R. R. Donnelley, who creates policies for the firm's IT purchasing decisions.

The reluctance of large companies to embrace storage outsourcing hasn't deterred storage system integrators, like Integrated Archive Systems Inc. in Palo Alto, Calif., from expanding beyond delivering and installing equipment. For the past six years, Integrated Archives has done work for a mix of Fortune 1,000 companies, such as Sybase, and dot-coms, like Yahoo Inc. Integrated Archive President Amy Rao says that later this year, the company plans to manage storage-area networks built by customers. "We'll be offering both hands-on services and remote monitoring services from data servers, where we'll collocate our servers," she says.

Although it's a very conservative first step, storage outsourcing for remote desktop backups or a Web site relieves an IT staff of some administrative tasks. For example, mobile and telecommuting employees at Kemper Insurance Co. can back up their PCs and laptops over the Web to servers at Connected Corp. in Natick, Mass., according to Glenn Gaudet, Connected's product marketing director.

What should you do if you have excess capacity in your data center?

"Outsource," says Jerry Lynch, director of operations at Online Computer Library Center Inc. (OCLC) in Dublin, Ohio. This nonprofit organization provides online referencing services to about 30,000 libraries in 65 countries. Its data center has 20TB scattered across three IBM S/39s, an IBM RS/ 6000, a Tandem Computers Inc. machine with an S70000 processor, and several Sun Microsystems Inc. servers, including an E10000 and an E4500. OCLC's storage needs are growing 30% per year, Lynch says.

"We're looking to lease 15,000 square feet of our data center to a start-up," he says. "We're also looking at making storage space available to libraries."

Ferrarini is a freelance writer in Arlington, Mass.

Copyright © 2000 IDG Communications, Inc.

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