Having it both ways – bringing the cloud to on-premises data storage

Like everything in the IT world, enterprise data storage is constantly evolving. One of the biggest changes it has seen in recent years has been the development of services where suppliers of conventional on-premises storage systems deploy and manage their products on customers’ premises. These storage-as-a-service, or StaaS, offerings are now becoming increasingly popular in business IT environments.

A3 Communications has assembled a panel of experts to discuss the pros and cons of the StaaS approach, to help enterprises assess whether it’s the right storage model for them. Continue reading to hear the opinions of IT leaders from across the data storage industry, what they see as the future of StaaS, and how this architecture can solve business data storage problems.

The Rise of Storage-as-a-Service (StaaS) 

As with many other aspects of business IT, the driving force behind the creation of these services has been the rise of public cloud computing and its major influence on the enterprise over the last two decades. The way the cloud has shaped enterprise IT operations has ranged all the way from technical practices such as application containerisation, through to high-level IT strategies. 

Before the cloud, the concept of handing infrastructure management to a third party was familiar to only a relatively limited number of companies that signed IT outsourcing deals. Now, businesses of all sizes, across all vertical sectors, are fully accustomed to relying on infrastructure managed by third-party public cloud operators. 

The cloud has also been widely credited for changing the way that most enterprises want to pay for the IT products they use on their own premises. Over the last few years that preference has swung away from capital expenditure (capex) and outright purchases of hardware products, to cloud-style operational expense (opex) and consumption-based payment schemes. 

These changes have prompted vendors of traditional on-premises products to develop on-premises StaaS offerings linked to opex-style payment models.

“StaaS is an increasingly popular choice for organisations, with demand only likely to grow soon. The simple reason for this is two-fold: it provides both convenience and simplicity,” said Anthony Cusimano, Director of Technical Marketing at Object First, a supplier of immutable backup storage appliances. 

There is more than one flavour of on-premises StaaS, as was pointed out by A3 Communications panel member Camberley Bates, Chief Technology Advisor at IT research and advisory firm The Futurum Group. Bates pointed out that the two general categories of on-premises StaaS service are Managed and Non-Managed StaaS.  

Managed StaaS sees vendors handling the whole storage stack, by both implementing and then fully managing storage systems on customers’ premises. However, Bates said enterprises are more attracted to Non-Managed StaaS.

In this model, StaaS vendors install and maintain storage systems on customers’ premises, but those enterprises then put the systems to work by handling higher-level activities. This includes provisioning storage capacity to applications or configuring data protection and disaster recovery mechanisms. 

“Non-managed StaaS has become surprisingly of interest in the market. This is because enterprises buy it ‘once’ and do not have to go back for a capex request over and over again. Rather, it becomes a monthly bill that they can true-up over time. We have found the fully managed offering of less interest, with enterprises opting to use their own resources to handle the storage management,” continued Bates.

Other members of our panel also highlighted the importance of the predictable opex-style payments for on-premise StaaS services. This contrasts with the alternative ‘lumpy’ capex, incurred once every few years when implementing or refreshing conventionally purchased on-premises storage.

But although opex-style payments were the mostly commonly cited reason for the growing appeal of on-premises StaaS, they were not the only one cited by our panel. According to Steven Umbehocker, CEO and founder at OSNexus, a supplier of scale-out software-defined storage systems, on-premises StaaS not only looks more like a public cloud service to the IT organisations that buy the service, but also helps those organisations look more like a public cloud service to their end-users. 

Organisations are operating on-prem more and more like cloud service providers. These on-prem private clouds need the ability to provide storage-as-a-service to their customers within the organisation and be able to charge them for what they use. This enables organisations to effectively use and implement a hybrid public/private cloud model to maximise the benefits of both,” he said.

Other StaaS virtues cited by these experts included the ability to increase or decrease capacity or performance far more easily and quickly than for conventional on-premises storage. As a result, there is far less need for on-premises StaaS to be over-provisioned or to provide growth headroom for expected future increases in demand for storage capacity or performance. Eliminating the need for such over-provisioning helps reduce costs. 

Another advantage of on-premises StaaS compared to conventional storage is that it eases the burden on enterprise IT teams that have long been suffering from perpetually increasing workloads and an IT skills gap.

But a comparison between on-premises StaaS and conventional on-premises storage is only half the story. Because the huge majority of enterprises have adopted hybrid cloud computing strategies, our panel also identified the advantages of on-premises StaaS compared to data storage in public clouds. 

Alongside significantly lower costs, a major benefit of on-premises StaaS over public cloud StaaS is about where data is physically located. This was the view of Paul Speciale, chief marketing officer at Scality, a vendor of distributed file and object storage systems.

“A key advantage of on-premises StaaS is that organisations can control geographic placement of data to adhere to specific data sovereignty regulations. While the major public cloud StaaS services now offer an increasing number of data centre locations in key regions, users still see their own data centres as offering the most assurances, due to less abstraction on data placement,” he said.

Potentially better security is also a benefit of on-premises StaaS. “Customers can also control security parameters with on-premises StaaS. Although public cloud StaaS has made significant security improvements in recent years, for mission-critical application data many enterprises still find it to be a tangible advantage in managing their own security infrastructures,” continued Speciale. 

Our experts also suggested another reason for the adoption of on-premises StaaS was the ability for enterprises to repatriate applications from public clouds to their own datacentres. Some said this is happening because of unhappiness with growing public cloud bills. 

This was highlighted by Roy Illsley, Chief Analyst at Omdia, who said, “On-premises is seen as an alternative to increasing spend in the cloud, where possible.”

Another benefit of on-premises StaaS compared to public cloud storage is the absence of the performance-sapping latency suffered when servers in customers’ datacentres access data that is being stored in cloud datacentres on the other side of long-distance networks. 

“Avoiding that latency is a priceless benefit for applications requiring real-time data processing or high-performance computing,” said Luc d’Urso, CEO at Atempo, a provider of data management and protection software. 

However, the consensus of the panel was that on-premises StaaS is not appropriate for every enterprise, dataset, or application. “For many organisations it may make sense to do a combination of StaaS with dedicated storage systems. Going with StaaS for everything may not make sense as compromises are made to meet the needs of multiple use cases and multiple internal customers and their different security requirements,” said Umbehocker at OSNexus.

Our contributors suggested that StaaS makes it easier to change either data capacity or storage performance much faster than is possible with conventional on-premises storage. However, such changes will take longer to implement than they would for public cloud storage. Put another way, on-premises StaaS is more scalable than conventional storage, but not as scalable as public cloud StaaS.     

A reverse hierarchy generally applies to the cost of the three storage models. While panel members said that on-premises StaaS is significantly less costly than public cloud storage, some were adamant that it can be significantly more expensive than conventional on-premises storage. 

Indeed, they warned that on-premises StaaS can be prohibitively expensive for smaller businesses or enterprises that are storing relatively limited amounts of data, or for organisations storing data distributed across multiple locations.

That was the view of Bruce Kornfeld, Chief Marketing and Product Officer at StorMagic, a supplier of hyperconverged storage used in edge locations. “The biggest pitfalls of on-prem StaaS lies with customers that have small storage needs, therefore the cost is prohibitive. When customers look at the cost of storage sets that are 10TB or less at small sites, the premium you pay for StaaS can outweigh its benefits,” he said. 

Commenting more broadly on the cost of on-premises StaaS, Bates at the Futurum Group said, “We have looked at the cost implications of StaaS, and for the most part, capex has been less costly.” 

Dr. Kai Wawrzinek, CEO and founder at Impossible Cloud, a supplier of decentralised cloud-based storage services, repeated Bates’ view when he said, “While on-prem StaaS shifts costs from capex to opex, ongoing subscription fees, support costs, and potential add-on services can add up over time, potentially resulting in higher long-term expenses compared to owning storage infrastructure.”

For OSNexus, Umbehocker made the starkest comment about on-premises StaaS costs. “I’d expect a traditional storage system to have a much lower cost/TB versus a StaaS system. Organisations will need to do the math on that. StaaS might be cheaper in years one and two, but over a seven-year term you might be paying twice as much,” he said.

Our experts also warned that enterprises should not overlook the initial expense of implementing on-premises StaaS. “Do not underestimate that implementing an on-premises Storage as a Service  solution is an infrastructure evolution project that requires adequate preparation and the right tools,” said d’Urso at Atempo. The tools that he was referring to are software products dedicated to data management, analytics, and migration.

Despite these warnings about cost, our contributors said that even if a specific implementation of on-premises StaaS costs more than conventional storage, its advantages can justify its expense. 

Umbehocker was not the only one who said that for enterprises to determine whether this will prove true for them, they must have a clear view of both the costs and operational advantages of the two competing models in their own datacentres. “Comprehensive financial modelling is a key, and the first pillar to start with. This will reveal advantages/disadvantages and provide an unobstructed picture,” said Alexander Ragel, CEO at Leil Storage, a provider of long-term, high-capacity storage systems.

There was much agreement that achieving such an unobstructed view is not easy. 

Andy Tomlin, CEO at consultancy and managed services provider QiStor, said that one reason for the difficulty is that the costs of existing on-premises storage operations are difficult to assess. ”It’s hard to fully compare the two models. The support costs of traditional on-prem solutions are unlikely to be fully understood,” he said. 

The A3 Communications panel members also agreed strongly that comparisons should not be restricted to simple cost metrics but must also involve an understanding of the impact of on-premises StaaS on IT operations and capabilities.

Meghan McClelland, vice president at mass storage systems supplier Versity Software, said, “At Versity, we understand that comparing the costs of on-prem StaaS to traditional storage can be complex, as traditional thinking often overlooks the strategic advantages of the StaaS model.”

This point was also made by Fred Lherault, Field CTO for EMEA and Emerging Markets at Pure Storage, a major vendor of all-flash storage systems that can be implemented in multiple ways, including on-premises StaaS as well as conventional capex purchase. He said, “A typical mistake many organisations make when comparing approaches is to focus on the price of usable capacity per TB”  

“Many organisations tend to purchase more capacity than they need, especially in the initial years. When comparing the actual total cost of ownership based on real capacity usage and taking into account management, technology refreshes, data migration, operations and data centre costs, StaaS can often be better value than outright purchases of storage systems,” he continued.

McClelland and Lherault’s views were closely echoed by d’Urso, who said, “Steer clear from any over-simplistic benchmark such as a price per terabyte. Instead, focus on the long-term benefits of scalability, flexibility, latency, security, data confidentiality, and compliance with internal or local regulations.”

David Norfolk, practice leader for Development and Governance at analyst firm Bloor Research, advised, “Define the scope of the comparison very carefully and make this scope public, so that people affected can provide feedback on omissions.” 

He warned, “Don't get an interested vendor to set up the comparison; take control yourself, but use an external consultancy if you don't have in-house expertise - making sure that your external guru isn't in hock to one of your vendors.”

On a broader front, there are lessons to be learned from history when implementing on-premises StaaS. More than one member of the panel said that the service is simply a new version of the long-established practice of IT outsourcing. “Old-fashioned outsourcing and today’s StaaS are identical models with different branding. Users are simply cutting a check for a third party to manage their infrastructures just like they were doing two decades ago,” said Kornfeld at StorMagic.

Lherault at Pure Storage said, “If ‘traditional’ outsourcing has taught us anything, it’s that SLAs are a prime differentiator. IT teams are beginning to recognise that many StaaS offerings only give the illusion of being a service without any obligation and are nothing more than dressed up leases. Organisations need to look for vendors who can provide guarantees on their outcomes, enable greater agility and scale, and are willing to partner with them. “ 

QiStor’s Tomlin shared this view when he said, “Having clear contracts between vendor and customer with SLAs and explicit expectations is critical.” He said vendors and customers should ensure they have agreed escalation paths to be used when issues occur and should establish regular joint reviews of the service. He also reminded enterprises to ensure that StaaS vendors have established relationships with the relevant database suppliers.

Looking to the future, the majority of our experts expected on-premises StaaS to become an established and widely used feature of the storage landscape. 

“We foresee a significant shift in the storage landscape, with on-premises StaaS poised to replace a substantial portion of traditional on-premises storage,” said McClelland at Versity. 

“Looking ahead, we expect the integration of advanced technologies such as artificial intelligence and machine learning to further enhance StaaS offerings, enabling more efficient data management and analysis. These advancements will drive market expansion,” she added.