Storage Counts on Gov't Spending

When it comes to managing records, does anybody have more important storage needs than government agencies? Tax records, driverss licenses, social security information, voter registration, and other data reside on federal and local government storage systems. The armed forces and federal agencies such as NASA, the Library of Congress, National Weather Service, and Homeland Security also have tremendous storage needs.

All of that helps storage companies grab their share of federal government IT spending, which the Office of Management and Budget pegs at $59.8 billion in 2005, according to Input, a consultancy specializing in the federal market (see Report: Fed Spending Slows).

Input says the Army, Navy, and Air Force have each requested $5 billion in IT spending for 2005. It’s unclear how much of those budgets will go towards storage, but government agencies ranging from NASA to the Italian government made major storage buys in the past year.

NASA is like a mini-vertical storage market by itself. Since the start of 2003, Advanced Digital Information Corp. (Nasdaq: ADIC), BakBone Software Inc. (Toronto: BKB), BlueArc Corp., DataDirect Networks Inc., Dell Computer Corp. (Nasdaq: DELL), EMC Corp. (NYSE: EMC), and Spectra Logic Corp.announced storage contracts with the space agency. (See EMC Makes Startup Drop Name, NASA Picks BakBone for Mars Mission, BlueArc Wallows in $47M Haul, NCSA Puts in DataDirect's Storage, Star Warriors Install Dell/EMC SAN, and Spectra Logic Backs Up Mars Mission.)

EMC is embedded in the military, thanks to a $40 million deal with the Pentagon and contracts with the Air Force Mobility Command and Army National Guard (see EMC Wins $40M Pentagon Contract). EMC also lists the U.S. Patent & Trademark Office (USPTO) among the 500 customers under its Federal Division (see EMC Trots Out Symmetrix Customers).EMC doesn’t have the military market to itself. The Office of Naval Intelligence (ONI) uses Network Appliance Inc.’s (Nasdaq: NTAP) FAS unified NAS-SAN system. The Pentagon also uses a Hitachi Data Systems (HDS) Lightning SAN branded by Hewlett-Packard Co. (NYSE: HPQ). McData Corp. (Nasdaq: MCDTA) SAN switches are installed in the Pentagon and U.S. Army gear, and the Air Force Combat Climatology Center uses Topspin Communications Inc. InfiniBand switches. (See Pentagon Deploys Hitachi, Pentagon Puts in 4,500 McData Ports, US Army, and Air Force Unit Picks Topspin.)

Local governments, which lack huge budgets and IT staff, often turn to local vendors for storage. Boulder, Colo.-based LeftHand Networks Inc. IP SANs are used by the city of Denver and the Colorado counties of Eagle, La Plata, and Summit (see Eagle Flies With IP SAN and LeftHand Tallies Government Wins). Waltham, Mass.-based services provider AmeriVault Corp. provides online data backup and recovery for the states of Massachusetts, New Hampshire, Rhode Island, and Vermont (see AmeriVault Wins Multi-State Contracts).

Security is a major concern for government agencies, so it’s no surprise that startup Decru Inc.’sfirst customer was the Italian government (see Italy Makes SANs Sicuro). Italy uses Decru's security appliance to encrypt citizens' personal data on a new nationwide e-commerce network. In another international installation, the Mexican Department of Labor uses a SAN from Dot Hill Systems Corp. (Nasdaq: HILL)as part of its disaster recovery system (see Dot Hill Goes Down Mexico Way).

— Dave Raffo, Senior Editor, Byte and Switch