Insider Assesses Compliance Impact

Companies will spend billions this year to comply with new laws and regulations designed to clean up corporate accounting. And the latest report from Byte and Switch Insider, this publication's paid subscription research service, outlines how the storage industry will change as a result.

The report, "Compliance: Do No Evil," says compliance has first of all put data growth back where it was a couple of years ago -- in the range of 80 percent to 100 percent annually, according to analysts, and perhaps higher. That heralds more storage sales right off the bat.

Leading storage vendors also have revamped their products to add the compliance spin. The report outlines how EMC Corp. (NYSE: EMC), IBM Corp. (NYSE: IBM), Hewlett-Packard Co. (NYSE: HPQ), and Network Appliance Inc. (Nasdaq: NTAP) are taking advantage of compliance to offer new products, upgrades, and services. It also names specific customers that have adopted each vendor's approach.

EMC, for instance, sees compliance as a way to peddle sales of a broader range of its products to its current customers, and to enlist the aid of integrator partners like Accenture and Cohasset Associates Inc. in offering lucrative new services to customers in data-intensive fields such as financial services, healthcare, life sciences, and government.

All this will be a boon to vendors. But compliance is also boosting a new product segment: email archiving. This category includes not only software and turnkey systems, but outsourced services offerings as well. Email archiving is driving a lot of the immediate spending for compliance, the report states, and it has helped fuel a rising tide of startups, including some among the 59 vendors the report lists as having compliance-specific products and services.Another thing compliance is bringing to the industry is a whole new wave of partnerships. Many alliances initiated by the storage vendors are already in place, and the pace has quickened over recent months. For example, in a multi-partner announcement in May, IBM unveiled agreements with 14 vendors, including EMC's Legato and HP, as well as a number of startups.

Many of these alliances have brought storage vendors together in odd combinations, or with IT suppliers they wouldn't otherwise mix with -- and the report tabulates these. In this vein, Veritas Software Corp. (Nasdaq: VRTS), for instance, has linked up with IMlogic Inc., which makes instant messaging management and security packages, and with Pegasus Disk Technologies Inc., which makes storage management software.

CommVault Systems Inc. and Xiotech Corp. have hooked up for compliance offerings. And the tape division of Sony Corp. (NYSE: SNE) has turned promiscuous in its pairings with software, storage, and IT vendors.

All this vendor activity points to new business in the storage market. But the report also cautions against taking the vendor angle that compliance represents a new Golden Age for storage. It questions whether compliance will cause the big boost to IT and storage sales that all the hype of recent months has suggested.

Mary Jander, Site Editor, Byte and Switch

More information about the current Byte and Switch Insider report, "Compliance: Do No Evil," is available here0