Lots of great stuff in the EMC portfolio for service providers -- almost too much to talk about today, with more goodness coming along every day!
In this post, I'd like to stretch out a bit, and share how EMC's DPA -- Data Protection Advisor -- is creating an interesting cluster of new opportunities for a wide swath of service providers.
Regardless of your SP model, there's probably something here that's worth a moment of your attention.
If you're offering any flavor of IT as a service, you'll probably need to deal with data protection, commonly called backup. Fail to pay attention to this topic, and it's only a matter of time before you'll have a really bad day -- or, more precisely, your clients will.
There's no need to belabor the point -- losing a bunch of valuable data and not being able to recover it quickly is about as bad as it gets in the IT world.
The real question -- is backup just another irritant to deal with -- or, in fact, is it a wonderful opportunity for SPs to differentiate themselves and create valuable new revenue streams?
Not surprisingly, I would strongly argue the latter case:
- The amount of data that need to be protected is growing substantially year-over-year -- so the "market opportunity" is automatically and predictably getting larger just with the passage of time.
- For most enterprises, doing backup using internal resources doesn't really create any strategic value for the IT function, it's a "hygiene" function that simply has to be done and done well -- hence attractive to hand over to an SP professional.
- The general state of affairs regarding backup is usually quite poor in most enterprise IT environments -- it's not hard to be better than what they're doing today.
- Backup technology is undergoing a radical shift from tape to disk-based deduplication, meaning that IT customers will need to either invest big in refreshing their backup approach before long, or -- preferably -- contract with a service provider who has already done so.
- The costs associated with backup in an enterprise IT environment are usually pretty easy to get to, making it easy to present an economic case that's quite compelling.
- And -- let's be honest -- it ain't the sexiest thing going on in the IT world these days -- although a very nice business.
Billions and billions of dollars of backup technology are sold each and every year -- it's a wonderfully growing business for EMC and our partners. More on that here.
What You Need To Know About Backup
It's actually quite simple.
First, people need continual assurance that their data is protected, and can be recovered per agreement when needed. "Protected" in this sense also means that it remains secure, compliant, etc.
Second, you need to be able to deliver that service at a competitive cost: capex and opex. Both are undergoing dramatic year-over-year drops due to better technology and better management software. Again, this creates an opportunity for an SP to profit from steadily declining costs-to-serve.
DPA absolutely nails the first requirement, and helps to accelerate the second one. It's that simple.
A Focus On Reporting
You don't get credit for what you can't prove.
That was true back when I was a student, and it's certainly true today in the business world.
DPA is the data protection management software that "proves" data is protected, whether directly accessed by your clients, or used to run your internal SP operations.
There's strong evidence starting to accumulate that SPs are increasingly measured on their ability to report back on what they're doing.
Consider this survey from our friends at ESG.
Lots to consider here -- it's worth a close stare -- but notice the #1 priority on management and reporting.
Backup Is A Major Pain For Most Enterprises
You don't know how truly nasty enterprise-scale backup can be until you've had to run it yourself.
Thankfully, I haven't had to do that, but I meet plenty of people who do.
Rarely, if ever, are these environments architected. Instead, they tend to grow up willy-nilly as different applications, products and technologies come wandering into the data center.
Applications change in importance, get combined with other applications in new ways, and -- sooner or later -- it becomes impossible to answer the core questions: am I adequately protected, and can I prove it?
EMC has a major business diving into these environments, untangling the spaghetti, making recommendations, and basically setting everything right. In the process of doing so, we've continually been struck by the growing interest in using external service providers to help out in some way.
EMC Data Protection Advisor
The DPA pitch is really very simple: there's all this "stuff" that's involved in data protection -- servers, applications, backup software and services, replication, various storage devices, all sorts of networks -- backup touches just about everything.
DPA creates a management abstraction that (a) assures you that your stuff is adequately being protected, and (b) tells you what has to be changed if for some reason that's not the case.
It does this for a breathtakingly wide range of technologies: EMC and non-EMC. And it's a proven and mature technology that's been continually enhanced for many years now. Not much in the way of head-to-head competition that we've seen so far.
Why Should SPs Care?
Two reasons: save money and make money.
The "save money" case is rather predictable -- as an SP, you'll probably have to provide some flavor of data protection behind your own services, and you'll want to do so as reliably and cost-effectively as possible. Basically, the same pitch we make to enterprise IT organizations.
The "make money" case is far more interesting.
Take backup-as-a-service, for example. The service provider has a natural advantage -- they're based in a remote facility -- hence separated by distance. That's appealing, and very costly for an IT organization to do themselves, especially if they're a smaller one.
The more sophisticated flavor is replication-as-a-service. Rather than periodic backups and potentially lengthy restores, the customer is looking for lightweight DR so they can run in your data center if they end up having a really bad day. Once again, VMware has made providing this sort of service far more attractive than the old days.
Finally, there's an interesting opportunity to provide solely the monitoring services for data protection activities being done by the enterprise IT group -- one that's growingly popular.
Here's The Big Idea
Our SP partners have found that -- using DPA -- they can put their tenants directly in control. Customers can see exactly what's being done, and how protected they are.
That means that SPs can either choose to differentiate vs. all the other folks offering similar data protection services (but limited visibility or control), or charge more for the service.
One very enterprising SP told me a story about how they used DPA to price their data protection services at a premium. The customer then asked "how much will you charge me to have someone watch the reports for me?". I loved it!
Here's the other angle to consider: with one investment in technology and associated operational processes, you basically have FOUR distinct business models to pursue if you choose:
- Offer normal hosting-type services, but with a customer-visible control plane for data protection
- Offer remote backup as a service to enterprise IT applications, again with a tenant-in-control upsell option
- Offer remote replication as a service to enterprise IT applications, again with a tenant-in-control upsell options
- Offer remote monitoring of existing backup and/or replication environments.
In particular, that last use case -- monitoring customers' environments on their behalf -- shows every sign of explosive growth going forward, so let's dive into that.
Overcoming Fear Of SPs
If you've ever tried to sell various flavors of IT as a service, you've realized that very often your competition isn't other SPs, it's the internal IT function itself.
You're essentially proposing a change in their roles and responsibilities. Some will see this as a positive thing; many will not.
Let's face it -- data protection is one of those "core functions" that IT people are trained to own and love and protect. They won't give it up easily unless there is a compelling reason to do so.
More than a few SPs have discovered that proposing remote monitoring services is a practical "baby step" in a larger play: the backup assets and processes remain firmly under control of the enterprise IT organization -- it's only the monitoring and reporting aspects that are externalized to the SP.
Needless to say, the SP has access to all the same reports that the enterprise customer is seeing, and notices that things aren't getting done well, assets are poorly utilized, there's poor compliance, etc. -- essentially gathering evidence for the next offer in the sequence.
Now that we've explored this unique aspect of DPA, let's get into the product itself for a moment.
Digging Into The Details
Lots to talk about "how it works", but let's start with what customers see: the reports and displays.
Not only are there a wealth of standardized reports and screens, but everything is very customizable.
There's an interesting quirk in human nature here that's exploitable -- any time you put data in front of someone, the first thing they usually ask for is "more data".
Indeed, many SPs targeting larger enterprise IT organizations have done a nice bit of business extensively customizing outputs (with more data!) for different organizational requirements.
Of course, there's support for chargeback models -- but also more advanced compliance reports, hardware and software utilization reports -- just about anything you'd be interested in. Or not -- as the case might be.
Pushing Assets Harder
Many enterprise IT organizations can afford to have extra capacity and bandwidth lying around for those big surprises or peak workloads.
Well, most SPs have to run far more efficiently -- they can't afford to have a bunch of underutilized capacity sitting around and not earning its keep.
The harder you push assets, the more you need to understand how they're being used, and -- more importantly -- quickly identify areas where you might have pushed things a bit too much and need to back off a bit.
In addition to the usual "is the service level being met?" sort of stuff, administrators can drill down and figure out network utilization, backup server utilization, storage device utilization -- all the infrastructure components that go into delivering the data protection service.
Having this visibility + quick ability to spot problems = higher asset utilization rates.
Scale? We Got Scale!
Since DPA isn't really doing any of the data protection work -- but simply reporting on effectiveness, utilization, etc. -- it scales quite nicely and doesn't require much of an infrastructure footprint.
A modest instance of DPA running in a VM can support tens of thousands of data protection clients and hundreds of administrative users -- a very large environment indeed.
Scaling beyond that simply means more instances of DPA. It's not unusually resource intensive -- CPU, memory, storage, network, etc. It sort of does what it does without taxing the infrastructure.
And, of course, everything is inherently and flexibly multi-tenant. Customers see what they want to, and nothing more.
Partnership Opportunities?
Sure, we can simply sell you the software in a traditional sense, and be done with it.
And, indeed, we've got a fair number of SPs who've found the existing offer enticing, and are in the market today with various flavors of these services.
But we think there's more we can do.
We're trying to figure out various variable consumption models where EMC gets paid when the SP gets paid. Not 100% worked out yet, so we'd appreciate your input on these issues if you're interested.
The second thing we're working on is how best to help generate demand for SPs who are offering these services. We talk to an awful lot of IT users and resellers about data protection topics, and many of them are very interested in consuming this stuff as a service vs. doing it the traditional way. Again, we'd welcome your thoughts on this.
Bottom Line?
Data protection -- backup, replication, etc. -- is a growing headache for IT, and it's not going away any time soon. As we talk with enterprise IT users, they're becoming more and more interested in using an external service provider vs. doing it themselves, and for all the right reasons.
As such, we remain convinced that more and more enterprising SPs will make the required strategic investment before long, and start offering data protection as a service to organizations large and small.
We'd like to help them do that :-)
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