Online Storage Wars – What’s in it for Service Providers?

Last weekend I signed up for an account at MEGA. This is @KimDotCom‘s new venture attempting to send a big F-U to the regulatory forces that are accusing him of copyright infringement and extradition to the US (for more info, head to the Wikipedia page) …off the bat you get a free 50GB account to basically so whatever you want with. This Cloud Service is hosted out of NZ and they have very aggressive Pro Plans for those game enough to use a service that is in BETA. 2TB for $19 Euro’s and 4TB for $29 Euro’s.

This is where I took a step back and wondered how the hell to traditional service providers even attempt to compete with massive quota’s driven by the public cloud. Data Sovereignty aside, it’s human nature to get most bang for the buck, so when someone see’s 4TB for $29 (that’s about .007 cents per GB) vs a more traditional Australian Service Provider price of roughly 20c per GB you can start to get a sense of the uphill struggle SP’s face to offer a competitive service.

Now, it’s debatable as to the level of redundancy, resiliency, security and… most importantly backup cloud storage providers like MEGA or DropBox offer and build into their offerings and we all know the the issues DropBox has had over the past year with data loss and security. I did recently learn that Amazon Web Services S3 Storage Platform is rated at 11 9’s of availability! That’s 99.999999999 which is madness! But the reality is AWS can build those platforms at such large scales…that it blows away anything Service Providers can deliver from an availability perspective.

The reality is that Service Providers can’t simply be so misplaced/arrogant to assume that potential clients are not well informed of the relative pro’s and cons anymore. Up until the last 6 or so months…I freely put my hand up and acknowledge that I was of that belief.

So, how do we evolve and use these services for our advantage?

Hybrid Solutions = Value Added Differential

Just as enterprise and SMB’s are heading into a world of Hybrid cloud solutions, so can Service Providers look at offering Hybrid services utilizing the investment made into their own platforms. By designing more robust platforms that extend to public storage providers SP’s can start to add value to already strong services and differentiate between other providers.

As a quick example: Veeam are about to release a Cloud Edition of their very robust and reliable Backup and Replication Product. The addition of the ability to add public (or local) cloud storage to a backup job means that SP’s can offer VCaaS type offerings where clients get the best of both local, service provider and then public cloud storage and archive for their backup sets. The benefit here is that because it costs less to store data in the public cloud, you could use the public storage for long term or extreme DR scenarios while keeping the more pertinent offsite storage on the service providers end for closer/faster access to recovery points.

For the Service Providers, the idea is to generate a source of recurring income via the volume clients send to the public cloud and, also look at building in consultancy services to compliment specific design/builds for clients that require a not so out of the box solution…

In this SP’s need to be able to adapt and use the public providers to enhance their own solutions…it’s the only way the war can be won!