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CSPs spend a lot on storage to enable the cloud

Nearly one third of cloud service providers spend more than 10% of their revenue on storage while 46% of them spend five to 10 percent of their revenue on storage, according to a survey conducted by Tintri.

Twenty-three percent of the CSPs surveyed held their storage spending to less than five percent.

“Storage can make or break a CSP’s business,” according to the report. “It represents an area of significant investment, both money and time. The highly virtualized environments that CSPs operate depend on storage to serve as an enabler rather than a bottleneck.”

Tintri, which sells storage systems for virtualized and cloud environments, surveyed 78 CSPs in December 2015. Forty percent of those participants were from companies with more than 1,000 employees and 38 percent were from organizations with less than 100 employees.

The CSPs identified performance as the top priority when evaluating storage. Eighty-six percent of the respondents considered it the most important criterion, while 69% sited reliability, availability and serviceability as the top considerations for storage. Fifty-eight percent said cost was the top factor while 41% stated manageability and 38% cited scalability.

“The fourth criterion, manageability, has a huge impact on performance and reliability that CSPs may underestimate,” the report stated. “In an open-ended question, we asked respondents to describe their problems with existing storage.”

The survey found that respondents frequently cited performance, scalability, management, monitoring, reporting and troubleshooting as problems.

“Which point to manageability as a pain-point sitting right below the surface of more obvious performance pains,” according to the report.

The survey also found that smaller CSPs provide a more diverse set of services to customers generally because they are competing in a much more crowded market. Eighty four percent provide infrastructure as a service (IaaS), while 67% provide private cloud hosting and 48% provide traditional managed services.

“More granular data show that larger CSPs have a much stronger holding in managed services while smaller CSPs have marched into disaster recovery as a service (DRaaS),” according to the survey. “Larger CSPs likely went through a journey from VAR to MSP to CSP while smaller CSPs entered the cloud market offering newer, differentiated services.”

Larger CSPs don’t come close to matching Amazon’s billions of dollars in annual revenue from its cloud business. The survey found that 21% of the respondents that are from companies with more than 1,000 employees have over $500 million in annual revenue.

“In contrast, 56 percent of respondents’ companies have annual revenue under $50 million,” the report stated. “This percentage is greater than the 38 percent of respondents coming from small companies that are fewer than 100 employees.”

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