"It was becoming a major investment to build out our back-end storage and that wasn't what we wanted to be doing," says Witz. "That's not our core business. We're an eight-person company and we would have had to add another set of people to handle storage."

Expect the SaaS expansion to continue in coming months. EMC execs say they intend to eventually offer SaaS and prepackaged versions of their software with full-feature parity. Symantec didn't get its Symantec Protection Network SaaS platform launched as promised in 2007, so look for it to play catch-up. An online backup service built around Symantec's Windows-based Backup Exec software is expected to be the first plank of the company's SaaS platform. And a lot of storage professionals are watching Google to see how it does with its GDrive online backup service for consumers, and if any success there might lead it to expand into an online service for businesses.

But storage vendors are also happy to supply smaller service providers. In December, CommVault formalized its program of selling its backup services to service providers. By formalize, CommVault means it will aggressively market technology it's been selling to providers for years. That model isn't unique; Asigra built a solid business supplying service providers with backup software.

Although they've been around a long time, storage services have made great headway over the past year or so. A few years ago, businesses were reluctant to use services because it meant trusting their company's business-critical data to others. Storage SaaS providers are counting on their expertise winning companies' trust.

"It's a valid concern," says Witz of trusting service providers. "But all they do is storage. The reality is they do a much better job than we would ever do. Our customers' data is safer on Nirvanix than anything we could build ourselves."

--Dave Raffo