Intelligent archiving drives STK ILM strategy: will ILM be its day in the Sun?

June was a significant month for Storage Technology Corp. In addition to company's announced acquisition by Sun Microsystems, StorageTek also launched a major effort to enhance its presence in the Information Lifecycle Management market with the introduction of its IntelliStore archive product. IntelliStore archive combines disk and tape in an integrated solution that STK calls intelligent archiving.

To explore the importance of ILM to StorageTek, the strategic significance of IntelliStore and why the acquisition by Sun makes sense, CTR sat down with Brenda Zawatski, vice president and general manager of Storage Technology's Information Lifecycle Management Solutions Division for this month's CTR Interview.

Q: What is the strategic importance of ILM to StorageTek and how does IntelliStore archive fulfill that mission?

A: ILM really has a number of aspects to it. Being more front and center, we have a tremendously strong technology background in our company in terms of intellectual property, in terms of great technologists. ILMS gives us two flavors to bring to market. One is obviously for growth and we've been known as a tape company for a long time and we do excellent in talking about the technology and the technologists. They've been superior in tape technology. We're the industry leaders in a lot of areas, VT and things like that. Now we're taking it to the next step with Information Lifecycle Management--we actually coined the phrase--and it's time to start delivering on that and by delivering on that it's two fold: delivering on the products and also delivering topline growth for the company.

Q: So in a way you're leveraging the existing technology base to move into ILM?

A: Exactly. We're leveraging the infrastructure as ILM--to quote a cliche, the right data at the right place at the right time--and a lot of times that's going to mean tape, sometimes it's going to mean disk. It's not always one or the other; it's a combination of both. And it's very specific on the application, the data and the customer needs to make some decisions based on their specific environment. Some things are very common across the board. E-mail will stay active for two weeks or 30 days but after that the decision's been made, whatever crisis has happened is past, but if you haven't read your e-mail for a month and you go back everything's happened.

IntelliStore gives you the flexibility to say keep it on disk for the first 30 days or the first 15 days as in our company. We have triggers on size and on age and then they'll actually start archiving it off out of your in box and move it to a cheaper storage medium.

In that case you're probably never going to move it back. I may actually click on it and notice that it takes a little bit longer--it may take 8 to 10 seconds to actually get it back versus the instantaneous.

However, there are other applications where you're going to move it back. Part of ILMS is data at the right place at the right time. I always use the example of financial data because most people can understand that one. Within a given quarter you're watching the expenses come in every day and watching he revenue click up every day and then consolidate it all a month after closing and you show it to Wall Street and you stockholder and say here's what we've done here's our performance and here's why.

Next quarter comes and that data is pretty stale. You're not doing quarter-to-quarter comparison you're doing year-to-year comparison. So you can move that current quarter data with the exception of that consolidated version. You can move that off to tape. For a while and at year end or you can leave it on tape. Really you're only looking at the quarterly version once a year. Right now I'm looking at second quarter of last year vs. second quarter of 2005. And that's when I need the rapid access of that information.

And again, I go to Wall Street and off it goes to tape because you're probably not going to use it again. If you are, it's probably for some special analysis that lets me see how cyclical my revenue was in a given quarter. Did 40 percent of it come in the last quarter, or break it up by channel. Did my channel give me a constant revenue stream or did it also spike up at the end of the quarter like my direct channel did? So you can look at trends and things of that nature. But the ability to move back and forth is the key and it's not the only way. You can do that manually. It's the idea of moving it back and forth and all the associated people expenses.

So from StorageTek's perspective it's critical componentry and it's leveraging customer investments. For us it's an adjacent space to where we are in tape. So the next logical thing is how do I leverage what I've already invested in, or my customers have invested in and be able to use that in a broader scheme. It's all about two things: taking risk out their business and giving them a better ROI on their IT, because nobody's got a growing budget.

Q: How does STK define ILM?

A: Managing the data from inception to deletion through its entire life cycle. Putting it on the right piece of media at the right time commensurate with its value. If it's very valuable and I'm going to access it a lot, I need to put it on disk. If it's very valuable and I'm not going to access it a lot I'm going to put it on tape. If it's because I have to keep it forever, I'm going to put it on tape.

There's different amounts of storage you're going to keep on disk and tape and it will vary a lot by what you're budget is, what business you're in, what regulations are driving your business so all of these factors are going to play a key role in actually making those decisions. So each customer is going to have a somewhat customized solution based on what he wants to do and what he can afford to do.

Q: You're calling the IntelliStore platform the third generation of archiving. Explain that concept.

A: When you think about archiving, 50 years ago it was all about tape. Put it on tape, take it off site, that's your DR plan, that's your archive should you need it. Three to four year ago people said I want to use that data for something. Then accessibility is more important so let's move it all to disk. They found that the management of disk becomes very, very expensive; the longevity of disk isn't there. So you're keeping it about three years. Then once you upgrade your disk subsystem it's not backward compatible so now you've got to rewrite all your data to a new disk subsystem. It was creating a lot of problems from a management perspective and creating cost problems. Although disk storage is coming down 40 percent per year it's still more expensive than tape. So that was generation two and it only took about three years to figure out that generation two wasn't the right answer either. So now we're at generation three or intelligent archiving, saying don't swing the pendulum left or right, swing it where you need to be. You have the capabilities of using both. That's the beauty of the IntelliStore solution, being able to use both disk and tape, being able to use multiplr applications in one archive. Put your e-mail in there, put your PeopleSoft, put your databases, put your instant messaging and now you're buying one archive. You have less people to manage and when you have to search you have one place to go to actually search it and look for it. When you start looking at those capabilities is when you start saying third generation archiving, disk and tape, doing the archive against multiple applications and when you bring in those two premises you bring in scalability and performance because you're making massively large archives.

Q: IntelliStore archive is based on a common platform that can be used for multiple storage applications. Why did you choose archiving and compliance as the first applications for IntelliStore archive?

A: Those are at the top of mind for customers. When you look at what they get out of it. Customers are looking for two things: ROI and risk reduction. There's a lot of compliance regulations with coming deadlines so there's a time to value for the customer that they need to have something today, particularly in the compliance and government areas. Also, with the upturn on the economic side and the data still growing they have this huge budget imbalance with the data growing at 90 percent and flat budgets. That math doesn't quite work for our customers.

So we saw the biggest customer value in those two areas up front when we asked them what are their number 1 and 2 issues, they're the ones that people bring up. Insurmountable data growth they don't know how to handle and then the compliance issue and backup is right up there as well.

Q: Moving beyond archiving and compliance, where else can you take this platform?

A: The common platform moves into a couple of key areas. What you put in there is a lot of the common infrastructure that you need for any software or appliance type solution. Things like logging device drivers. So if you write that once and just keep re-using that, the value is time to market. By the way this is not a framework. People say, "Is that like the Tivoli framework?" It's not. It comes as part of the package. You don't even know it's in there. It's just a way for us to get a value to our customers much more quickly.

Look for us in the future to bring out continuous data protection, so now you have no downtime, no backup windows. Virtual tape for the open systems environment will come out on that platform as well and utilize all of the benefits. You'll see those things coming to market certainly within the next 12 months, but probably a lot sooner than that.

Q: A unique feature of IntelliStore archive is the technology refresh capability. How does it work and what's the value to the customer?

A: This is huge. In HIPAA medical imaging, for example, you're talking very long term storage. So how do you do that? There's one part of it if you put it on tape you get some backward compatibility features; LTO-3 can read LTO-2 and LTO-1. That gives a lot better longevity than in three years my disk subsystem lease is up and the new one is a different format and you have to rewrite data.

But also IntelliStore is intelligent enough to know it's time to refresh the technology and it will automatically write that into new technology for you. You don't have to worry about "I wrote that tape 15 years ago now what?" Based on your policies, it will automatically take that tape and rewrite it to a new format for you so you're constantly maintaining something that is readable in your IntelliStore archive, both disk and tape.

When you sit down and think about the concept say how long does technology last--it's especially important when you're talking about compliance, SOX or SEC 17 a4--and when you sit down and say how do I make this a long term investment for the customers when they're going to continue to invest and I'm going to grow with them, actually thinking about some of these regulations with 30 years retention, well how do you do that? No technology is around for 30 years. The PC hasn't even been around for 30 years yet. So how do you make that happen? It was a critical component going forward. How do you take the pain out of this process? If you have people doing this, you're not adding value to the bottom line. They're not making your stock price go up. You're not adding anything to the top line of your business. You're spending man hours or man months just rewriting data you already have. Take the people out of it and use those people to gain a competitive advantage and drive your competitive positioning. Use IT as a leverage point, not as a cost center.

Q: Another key piece of the IntelliStore archive solution is the professional services aspect, particularly in the area of compliance. Explain that value and does that minimize the potential for IntelliStore archive being sold through the channel?

A: We offer professional services, not everyone needs them. But we do offer them to help with compliance and non-compliance issues, such as how to get started. It's a big undertaking if you haven't looked at this as a company. Taking off the pieces that are the most pain for you and then looking at it. Take e-mail archiving for example. How do you get started? How many software packages do you have in there? How long do you want to keep it? Where do you want to keep it? Going through that process with you. We can help with your professional services we also contract with other outside experts in 17a4 for example, to make sure that we're meeting all the specifications in your industry and also make sure you're using best practices. So you want to make sure that if you're in the automotive industry you're able to leverage the experiences of professional services types of folks.

It doesn't preclude you from using the channel and a lot of our value added resellers actually have some tremendous services offerings. A lot of them specialize in particular industries, such as health care and they understand the applications, they understand what the regulations are and they can help those customers along the way. So I think it's a way for our VARs to bring more value to the end customers.

Q: Are you starting to see more VARs developing compliance expertise as their added value?

A: In ILMS, because of the way we source the offerings, we haven't been the most channel friendly. On the tape side, 40 percent of our revenue comes from non-direct. On the ILMS side, this is a big push on my part to get this into the channel as soon as possible, both the IntelliStore and Flexline 600, to enable them to resell and bring value to customers. It's not the channel too, it's direct and indirect together.

Q: The IntelliStore archive pricing is pretty aggressive. Is part of that strategy to make this product more suitable to SMB and SME customers as well as enterprises?

A: The pricing is pretty aggressive so when we talked about the pricing at 4 TB at $75,000 it's pretty compelling compared to a competitive offering at 2.2 TB at $85,000. So you're getting twice the capacity at around the same price. That's one aspect about working with SMEs, but it's got to be easy to use. You can't expect them to spend millions of dollars in professional services to get his thing up and running or wait six months so they can see value. It comes with some policies that you can easily turn on. We've had a number of our beta customers actually get this thing in and up and running in about three hours. They really get the time to value very, very quickly so ease of use is paramount to medium sized customers.

Q: Are you finding that SMEs have the same storage problems as larger customers?

A: Exactly. They have the same storage problems. They just have fewer resources with which to solve them. So whatever we can do to make it easier for them and broaden our reach with our indirect sales force, all the better for the customers.

Q: Regarding Sun's deal to acquire Storage Tek: this deal gives Sun a greatly enhanced presence in the storage market. What's the upside of the deal for StorageTek?

A: I was thrilled with the announcement. This is two giants coming together. Sun brings a tremendous amount of intellectual property and expertise in operating systems and server environments among other things. We bring expertise in the storage environment, in terms of intellectual property in the in the ILMS arena, in terms of 1000 plus SEs and sales reps that know how to sell storage, several thousand service people with a great reputation. One of the reasons I came to Storage Tek was the customer loyalty. They like the products, they like the service and you basically could not jar them away. I was at IBM and competed against StorageTek for years and it was very difficult to get a StorageTek customer to leave.

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When you add the two together now you've got end-to-end solutions: storage, servers, software and networking that we can both bring to the table.

Sun's got a tremendous installed base that we can leverage. They don't have a real high attach rate in terms of storage to servers, so it gives us a tremendous amount of leads right off the bat to talk about what types of solutions we bring to the customers. And there's very little overlap in the product between ours and theirs, so I think at the end of the day the customers are going to win on this one. The question will be getting it closed quickly, get through that and move on with business as soon as possible, get your strategies stated, get everybody selling and understanding and move forward.