RSM Resources

Many midsized companies have been overwhelmed by the exponential growth in the need to store data, which is being driven, in part, by new laws that require business owners to store more information.

From the Sarbanes-Oxley Act of 2002 to the Health Insurance Portability and Accountability Act, businesses must store information longer and in a more secure fashion.

In addition, digital graphics files, Web pages, marketing material, software, PDFs and providing employees with round-the-clock e-mail access require much more storage space than was needed only a few years ago.

"The demand for data storage is growing in almost every direction," says Randall Palm, chief technology and information services director for CompTIA (Computing Technology Industry Association). "If you look at existing data growth patterns, it’s been roughly doubling every two years. Going forward, it’s likely to double every 18 months or less. Clearly, small- and medium-sized businesses have to respond."

With technology changing so quickly, how can you devise an effective long-term strategy for storing important company data? IT professionals suggest you apply the following four principles to devise a viable solution:

• Establish a long-term data storage and retention policy.
• Assess the capabilities of your IT staff, and, if necessary, provide them the training they need.
• Estimate your data storage needs for the next four to five years.
• Identify the hardware and software solutions that fit your needs.

Worldwide, IT storage costs for small and midsized businesses were $10.5 billion in 2004, up from $9.6 billion in 2003. The fact that expenditures only grew about 10 percent while data storage demands grew at least five times as fast can be attributed to recent product developments and innovations that have driven prices sharply downward.

"The cost per megabyte of storage is as little as one-tenth of what it was just three to four years ago," Palm says.

The good news is the storage industry has been busy developing better hardware and software that are finally affordable for the midsized market. Managing these options and various data storage strategies, however, may not be an easy task.

Industry professionals say taking a few straightforward steps can make the process more manageable.

Establish a data storage and retention policy. Create a policy that will work for your company. If you don’t set the parameters for what kind of information to save, for how long, and with what kind of accessibility, you’re going to be hit by what Palm calls the garage-shelf syndrome — no matter how many shelves you put up in your garage, they’re going to end up full. The hottest trend in this arena is called Information Lifecycle Management, or ILM. The basic concept behind ILM, according to the editors of Computerworld, is "to set up a process for managing access to data that reflects the value of that data to an organization. The more valuable data is, the more accessible it should be."

Assess the capabilities of your IT staff. You may not be the only one who has trouble keeping up with the changing landscape in data storage. Your IT professionals — or professional — may be having a tough time too. If your IT people aren’t up to speed yet and you need to make decisions quickly, you may want to hire a third-party consultant to get the process started. But the sooner you develop these capabilities — whether on staff or through a consultant — the easier it will be to keep up with changes. Give your employees the training they need, if necessary.

Estimate your future data storage needs. Calculating how much data storage capacity you’ll need four or five years from now can be tricky, but for starters, you can assume that average data storage demands are going to at least continue along recent lines. That means you will need at least eight to 10 times your current capacity four years from now. At the same time, you need to factor in the projected growth of your business. If you plan to add five employees in the next three years and expand the scope of your customer service activities, for example, you need to factor that into your data storage needs.

Choose hardware and software solutions that fit your needs. Selecting the right hardware and software is complicated, but a good consultant can identify the right solution for your company. Concerning hardware, storage area networks (or SANs) have become the preferred solution due to their increasing affordability. Less than five years ago, SANs cost in the neighborhood of $250,000, pricing them out of reach for the midsized market. Today, however, so-called SAN-in-a-box solutions can be had for as little as $10,000.

Furthermore, SANs offer easier backup, and they have built-in redundancy. For critical functions such as e-mail, where you want to have a redundant server to ensure uninterrupted operations, you don’t have to replicate the storage. Overall, SANs now offer one of the lowest per-megabyte costs when you consider total cost of operation. They deliver cost savings through improved disk utilization, centralized management and a need for fewer tape drives. As a result, sales of SANs are expected to grow by 40 percent this year. They are projected to comprise 72 percent of all external storage purchases for the year.

Improving your bottom line

When it comes to selecting data storage management software tools, many options are available. Vendors can serve as a good source of information about the various products that are best suited for your company.

No matter which storage option you choose, IT professionals say don’t approach the issue as having too much data and too little storage space. Instead, look at the issue as a way to improve your bottom line.

"Having up-to-date data storage and management capabilities is very important to any business’s viability," Palm says. "It directly impacts the effectiveness of each of your employees."

One simple, yet powerful example is providing e-mail access to your employees 24 hours a day, seven days a week. It increases your data storage and management load — but it can pay big dividends.

"When I’m in the office on weekends working on our systems, I often see employees accessing their e-mail — essentially working at home, for free, because they can," Palm says.

Case studies have shown that improved storage systems can yield annual returns on investment ranging from about 125 percent to more than 500 percent. With that kind of an ROI, you can pay back your upgrade costs in less than a year and begin growing your profits.