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On-premises STaaS shifts storage buying to Opex model

Storage as a service enables organizations to access on-premises storage in various ways, such as pay as you go, subscription buying and metered payments. Learn the pros and cons.

Deploying and managing enterprise storage is a costly and complex process. IT departments must plan, purchase, install, configure, maintain, update, retire and dispose of equipment -- all the steps that constitute storage lifecycle management. To simplify operations and avoid high upfront costs, many organizations turn to public cloud platforms to meet some or most of their storage needs.

Storage as a service (STaaS) eliminates Capex, simplifies management and offers extensive flexibility. Unfortunately, STaaS delivered through a public cloud platform has its issues, particularly around security, control and performance. Even so, organizations like the concept of storage delivered as a managed service because of the ease of use afforded by cloud services.

To get the best of both worlds, IT teams have been looking for ways to bring cloud-like functionality to their on-premises data centers, often implementing private or hybrid clouds that duplicate many of the advantages of public services. Deploying infrastructure in-house, however, brings with it many of the same challenges that drove organizations to the cloud in the first place. But, now, IT teams have another option -- on-premises STaaS -- a consumption-based services model in which vendors deliver, deploy and manage on-premises storage solutions.

With on-premises STaaS, a vendor still owns the storage components but installs them at a customer's selected location. The customer essentially leases the on-premises capacity from the vendor rather than buying the system outright. This is not a typical leasing program in which the customer pays a fixed monthly rental charge no matter how they use the platform. Instead, the vendor offers the storage offering as a consumption-based service in which the customer pays according to usage.

The vendor also provides partial or full management services. This leads to an even greater cloud-like experience.

What is on-premises STaaS?

On-premises STaaS provides organizations with a way to get cloud-like services in their own data centers, remote offices, colocation facilities or other sites, while avoiding the complexities and large upfront costs that come with traditional storage. Storage managers can scale storage up and down as needed, without having to overprovision systems or pay for unused storage. On-premises STaaS bridges the gap between traditional leasing programs and cloud-based services to provide users with the type of control, security and performance that comes with traditional storage, but also with the type of pay-as-you-go flexibility that comes with the cloud.

Vendors that support on-premises STaaS programs typically offer a wide range of block, file and object storage options in multiple configurations. The programs might also include storage-related software or other value-added services, such as premium support or data protection. In addition, STaaS vendors typically provide service-level agreements (SLAs) or other guarantees to ensure customer requirements are met. In exchange, users agree to a monthly fee based on actual usage.

The exact metrics used to determine usage depend on the STaaS program and the selected package, but the basic concept is the same: customers get the storage resources they need when they need them, while having a predictable mechanism for tracking expenses. They might be required to make minimum capacity or time commitments, but these are usually reasonable amounts.

Self-managed vs. fully managed method

Most STaaS vendors offer at least two basic support options. In the self-managed option, the vendor helps plan and design the storage offering, delivers and installs it to the customer's location of choice and then provides ongoing support. It is up to the customer's IT team to handle day-to-day operations. In the fully managed option, the vendor performs all these tasks, but also takes on the everyday system administration, providing a fully managed storage service that closely approximates the public cloud experience.

On-premises STaaS provides organizations with a way to get cloud-like services while avoiding the complexities and large upfront costs that come with traditional storage.

Most STaaS vendors offer on-premises storage services based on a pay-as-you-go model, also referred to as pay-for-use or usage-based. With this approach, customers pay only for the capacity they use, based on a predictable cost structure tied to the amount and type of storage. Many vendors also employ some type of metering technology to ensure customers pay for only what they use.

Integral to many usage-based programs like storage as a service is the concept of reserved or flex capacity. In this model, a vendor delivers storage with extra capacity to accommodate fluctuating workloads. A customer can use the reserved storage when needed, without having to deploy additional hardware. The vendor charges only for actual usage, not for any capacity sitting in reserve. The metering technology built into on-premises STaaS helps ensure proper tracking.

Some vendors provide other subscription options, such as a program in which a customer makes predictable payments over an agreed-upon time, with growth built into the calculations. In addition, vendors often offer value-added services, most of which are related to different levels of support and management, such as additional monitoring or AI-driven insights.

Pros and cons of STaaS

It's no surprise that on-premises STaaS is grabbing so much attention right now. It promises many benefits that can help address the challenges that come with traditional on-premises systems and public cloud services.

One of the biggest benefits is the technology's usage-based payment structure. As with the cloud, customers move from a Capex to an Opex spending model, paying only for the services they use. They get a predictable rate structure, while reducing the IT overhead associated with planning and deploying on-premises storage. In this way, vendors and customers share in the storage investment risks.

The metering that comes with many of these services also ensures customers pay only for what they use and provides visibility into a workload's actual costs. Customers can tie storage expenditures to specific applications or business units, resulting in more accurate budgeting and costs analysis.

For STaaS offerings that include reserved capacity, customers can quickly and easily scale storage as needed, while paying only for the resources they use. Reserved capacity also eliminates the need to predict future storage requirements and the overprovisioning that often goes with it -- which is typically the case when purchasing a system outright. At the same time, customers avoid the risk of running out of capacity should workload patterns suddenly shift.

On-premises STaaS also simplifies IT operations by making it easier to procure, deploy and manage storage. Administrators can more easily implement storage, scale capacity, monitor usage and get the support they need when they need it. STaaS vendors might also incorporate AI-based analytics into their support models, which simplifies troubleshooting and enables proactive storage maintenance. Some subscription plans include full-time management, freeing up IT professionals for other efforts.

In addition, IT teams have more control over their storage environments than they would if using the public cloud, making it easier to ensure data security and compliance with applicable privacy regulations. Teams can also configure their storage systems to accommodate specific workloads and performance requirements, something they cannot do in the cloud.

Clearly, storage as a service offers important benefits, but it also comes with several challenges. For example, if an organization goes with a fully managed offering, the vendor must have remote access to its storage systems, which brings into question security and privacy concerns. IT teams need to carefully assess each plan to determine the level of access a vendor requires to manage or support its storage systems.

In addition, as good as consumption-based pricing and managed services sound, organizations cannot always assume that STaaS will save them money over the long-term. They must consider issues such as ongoing subscription fees, add-on services costs and operating expenses. Plus, they will have no equipment to sell at the end of the leasing period.

Certainly, for some, STaaS will be the right option, especially when considering hardware refresh cycles. But organizations can't be certain without a careful cost analysis.

On-premises STaaS vs. cloud STaaS

Organizations can now choose between cloud-based STaaS or on-premises STaaS, both of which come with advantages and disadvantages.

With cloud-based STaaS, customers get a fully managed storage service that turns data administration into a series of simple and streamlined operations. Customers choose how much capacity and performance they need, and with a few point-and-click operations, they're ready to go. The vendor handles all infrastructure management and allocation, freeing up IT resources for other tasks.

Cloud-based STaaS comes with challenges, however. Despite the data protections that providers implement, the cloud is still perceived as a risky place for highly sensitive data. Cloud storage substantially increases the data's attack surface area, raising concerns about security and compliance. Customers also have less control over that data and its infrastructure. The vendor makes all decisions about how security protections are implemented, how systems are optimized and how management operations are carried out.

Cloud services can also be pricey if you include long-term subscription fees and other costs, such as ingress and egress charges. In addition, a cloud platform can be unsuitable for latency-sensitive applications, especially those relying on internet connectivity. A platform might also experience outages that bring an organization's operations to a halt. Plus, cloud storage assumes the provider will stay in business long enough to sustain data-related operations into the foreseeable future.

On-premises STaaS addresses many of these concerns, especially in the areas of security and control. Customers determine how data is protected, how systems are configured, and how the infrastructure is maintained -- unless they opt for a fully managed offering. Even then, users still have more control than with a cloud-based service. That said, on-premises STaaS has its own challenges.

Although on-premises STaaS avoids ingress and egress charges, it's still subject to long-term subscription fees and support costs that can certainly add up. In addition, there will always be administrative tasks to perform, even if only to ensure the solution's physical security and ongoing operations. IT must also provide a space to house the physical STaaS storage, along with the power and cooling necessary to keep the equipment running. Plus, the vendor might require remote access to the storage systems to support, monitor and maintain them.

If an organization is committed to the STaaS model, decision-makers should carefully vet both on-premises and cloud STaaS. The choice between the two will depend on an organization's size, budget, workloads, security requirements and many other factors.

Five features to look for in on-premises STaaS

Despite the challenges, consumption-based storage still offers many benefits, particularly for those who don't have the budget for large, upfront costs. At the same time, there's no real standard when it comes to STaaS delivery, making it difficult to compare subscription packages from one vendor to the next. As a starting point, buyers should look for the following features in a storage-as-a-service offering before making a decision.

Pay-as-you-go, consumption-based pricing with metered services. One of the main reasons to consider on-premises STaaS is its usage-based pricing, which ensures you pay only for what is used. To be effective, the offering should include metering capabilities that verify consumption and provide access to usage-related data. For example, Dell Technologies On Demand, Hewlett Packard Enterprise (HPE) GreenLake and Quantum all offer pay-per-use storage services backed by granular metering capabilities.

Flexible capacity with reserved storage based on pay-for-use pricing. Reserved capacity goes hand-in-hand with metered services and is one of the key features that differentiates storage as a service from simple leasing programs. Reserved storage, along with usage-based pricing, also makes STaaS more cloud-like. Customers can easily scale storage up and down, leading to more responsive application delivery without overprovisioning resources. A number of STaaS programs support this feature, such as Dell On Demand, HPE GreenLake and Pure as-a-Service offerings (formerly Evergreen Storage Service).

Simplified procurement, deployment and maintenance operations. Like public cloud platforms, on-premises STaaS adheres to a service-based delivery model that simplifies IT operations. However, the degree to which a program helps IT depends on the vendor and selected package. For example, NetApp Keystone performs regular storage health checks, automatically validates whether NetApp is meeting its guarantees, and provides prescriptive and detailed reporting covering usage trends. IBM Managed Private Cloud IaaS manages, monitors and troubleshoots problems 24/7. And Hitachi Vantara STaaS includes a range of reporting and analytics capabilities, while providing ongoing monitoring and architectural governance.

Pricing and service options that support business requirements. When choosing storage as a service, decision-makers must ensure a vendor can deliver the necessary services, starting with the storage systems themselves. For example, vendors such as Hitachi Vantara and Zadara offer file, block and object storage systems in multiple configurations. Many STaaS programs also offer different types of value-added services. A good example of this is Quantum STaaS, which provides several service options, such as installation and integration, cloud-based analytics, proactive monitoring and management, tech refreshes and data migration. Dell Technologies, on the other hand, offers value-added services that focus on deployment, support and management.

Vendor SLAs and guarantees to meet customer expectations. As with other aspects of storage as a service, SLAs and guarantees vary significantly from platform to platform, so decision-makers should pay close attention to exactly what a vendor is promising. Zadara, for example, offers a 100% uptime guarantee, while NetApp guarantees 100% availability and proper sizing for the customer's performance needs. At the same time, decision-makers should consider the program's commitment requirements. For instance, Pure Storage requires a customer commitment of at least 12 months and 100 TB of reserve capacity.

In addition to these five features, organizations will no doubt come up with plenty of other capabilities a STaaS product should include to support their specific workloads. The challenge is to determine which one will best fit your needs. For that, you'll need to do a fair amount of homework.

features of on-premise STaaS

The on-premises STaaS promise

On-premises STaaS is a growing field, with new vendors regularly jumping into the market. Those leading the way -- such as Dell Technologies, HPE, Hitachi Vantara, IBM, NetApp, Pure Storage, Quantum and Zadara -- offer a wide range of storage configurations and services, making it possible to support just about any workload. Organizations have more options than ever when it comes to storage as a service, and those numbers are only likely to grow.

On-premises STaaS might not be for everyone, but those that can benefit from this approach have never been in a better position. The only question is whether this is a sustainable business model. On-premises STaaS is a market in its infancy, and it has a long way to go to prove itself.

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