IBM To Rent Out On-Demand Data Storage

October 6, 2000

NEWS BRIEFS

San Diego, CALIF. — Melanie Austria Farmer reports that as part of its strategy to offer customers information-technology services on demand, IBM Global Services said it will begin offering data storage on a pay-as-you-go basis.

“We’re seeing a situation where customers want technology delivered as a service,” said Nancy Kaplan, a spokeswoman for IBM. “The technology is very complex and changing quickly…You’re seeing companies that want to focus on what they’re doing for a living rather than worrying about the technology” to run their business, she added.

IBM, which already provides Web hosting, application hosting and other services, said its new offering lets customers buy storage capacity and management as needed, paying for it as they use it. Companies can choose to have IBM manage the services remotely at the customer premise or at one of Big Blue’s 175 data centers.

Regardless of where the data is housed, IBM said it will offer consulting, planning and installation services to meet each client’s data storage and availability needs.

IBM is not the first to rent data-storage services to businesses. Start-up StorageNetworks, which enjoyed a successful public offering earlier this year, rents access to its own storage systems at more than 20 data centers in several cities.

Earlier this year, Hewlett-Packard unveiled a new hosting service called Infrastructure-on-Tap. Under the pay-as-you-go plan, HP provides the technology necessary to start and manage a Web site, including data storage, hardware, network security, maintenance, network connections and other IT support.

Data storage is an increasingly hot market, as Internet-driven companies seek to manage and secure huge databases. The popularity of the Net has created a tidal wave of data, which in turn has expanded the scope and complexity of keeping tabs on invoices, email, communications and other information.

According to market researcher International Data Corp., the market for hosted services including Web hosting, storage management, e-markets and application service providers (ASPs), will reach approximately $45 billion by 2003. The storage segment will account for as much as $8 billion of that market.

In addition to selling its managed storage services directly to customers, IBM said it will offer the services through Internet service providers, ASPs and other storage business partners.

IBM intends to open 65 additional data centers soon. The company also said it is developing a hosted service for the wireless market.

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