The sputtering economic recovery cast a shadow over this year's storage salaries and bonuses -- they're higher than 2003, but not by much. While salaries and bonuses inched upward, hiring remained flat and, according to respondents to Storage magazine's second annual storage industry salary survey, 2005 is expected to be a better year for compensation than 2004.
In an effort to create the industry's only picture of hiring and salary trends for storage professionals, Storage has once again surveyed its readership about their salary and employment. In addition to the survey's more than 220 respondents, we interviewed a number of storage employees, IT managers and industry observers to get further insights into the storage hiring situation. To review average salary data, click here. To review salary increases data, click here.
Overall, respondents like working in storage. "I love it here. It's an opportunity to expand my horizons," says a senior systems engineer at a major Colorado defense contractor. The company just reorganized storage into its own department and may even hire more storage people next year.
This year, salaries grew approximately 5% ($78,097 on average) over what this year's survey respondents reported for 2003. Still, the economy continues to be problematic for IT professionals. "Overall, IT has seen a bit of an expansion in hiring, but it has been more like two steps forward and one step back," says Terry Phillips, branch manager at Robert Half Technology, a national recruiting firm in Columbus, Ohio. Phillips' advice to storage professionals: Approach the market with caution.
But pockets of the storage community are experiencing an upturn. "We're seeing the need for storage steadily increasing," says Charlie Westling, president and CEO at Datalink Corp., Chanhassen, Minn. The storage consulting vendor hired approximately a dozen storage professionals this past year and expects to hire another dozen in 2005.
The $78,097 salary noted earlier represents an average among all respondents and across all regions. However, salaries vary significantly by region. You're mistaken if you think a storage job in a dedicated storage group at a major New York City financial services company will pay top dollar. At $79,674, financial services salaries trailed utilities, health care/pharmaceuticals, transportation/travel and hospitality, and IT services, which all paid $80,000 or more (see Question 2). And while the Mid-Atlantic region is one of the most expensive places to live in the United States, it was in a virtual fourth-place tie (at more than $78,000) with the Midwest among highest paying regions.
Storage professionals in the Pacific and New England regions, other areas with a high cost of living, had the highest salaries, $88,167 and $85,500, respectively, followed by the Southwest at $80,217. At the bottom of the salary list are storage professionals in the Southeast ($69,168) and the Northwest ($64,857).
In terms of industry salaries, no segment stood out except education, which was the lowest paying with an average salary of $60,444. Even the government/nonprofit sector did better, averaging $74,625. Utilities, health care/pharmaceuticals, transportation/travel and hospitality, and IT services all paid in the low $80,000 range.
As expected, if you manage a lot of storage, you're paid more. Those who managed more than 500 terabyte (TB) pulled in an average of $87,231, while those managing less than 1 TB earned on average $62,313. Similarly, managing many people also leads to higher pay. Those who managed more than 50 people averaged $97,000 compared to $76,607 for those who managed one to five people.
Being certified also pays off, at least enough to cover the cost of earning the certification. Those reporting three certifications and those reporting five or more certifications averaged $81,200, while those with no certifications averaged $78,975. However, many working in the storage industry don't find certification necessary. "Certification is a plus, but it isn't necessary to us at the stage we're in," says Bob Collins Jr., chief technology officer at Outcome Sciences Inc., a biotech company based in Cambridge, Mass.
"Certifications at this stage in the storage industry aren't as important as experience with specific vendors and types of storage," says Robert Half Technology's Phillips. But they can signal vendor experience and competence. "I plan to get an EMC certification," says the senior systems engineer at the Colorado defense contractor. The engineer already has extensive EMC experience; certification will prove it.
Surprisingly, being part of a dedicated storage group doesn't appear to equate to a larger salary -- $78,907 on average compared to $79,012 as part of a systems group. Another surprise: Being part of a multibillion dollar company doesn't necessarily lead to a higher salary. The highest salaries, $83,593 on average, went to those working at midsized companies with $501 million to $1 billion in revenue. Those working at the largest companies, with more than $10 billion in revenue, earned an average of $81,095.
Bonuses and raises
In addition to salary, some storage professionals receive bonuses as part of their total compensation package. Almost half of the survey's respondents say they expect to receive an average bonus of $5,000 in 2004, almost $900 more than the 2003 survey respondents. Approximately half of the respondents reported no bonus at all in 2003 and 2004. This year's respondents estimate their bonuses will increase by almost 10% next year to $5,445.
By industry, the financial services area experienced the largest bonuses -- almost $9,000 on average -- followed by utilities at $6,650 and IT services with almost $6,000. By region, New England did the best, averaging a bonus of $10,468, versus the Mid-Atlantic's $7,750.
Stock options are another form of compensation; 17.5% of respondents report stock options as part of their compensation package, about the same as last year.
"We're seeing variable compensation becoming a more important part of the storage package," says Datalink's Westling; his company offers a bonus tied to the success of the business.
Many respondents reported receiving raises this year. "People here usually get between 2.5% and 5% for annual raises. I got 5% last year and 5% this year," says the senior systems engineer at an aerospace defense contractor. He received his raise because he possesses some highly sought-after SAN and EMC skills.
"I did not get a raise, but all my people got raises, about 5% on average," reports Outcome Sciences' Collins. This year's raises were the first in several years, he adds. The company also offers stock options and pays a small annual bonus, which didn't change much from prior years. The company's compensation, Collins believes, is typical for the biotech industry.
Chuck McQuade, storage specialist and a member of the CIRT Architecture team at the University of New Mexico (UNM) in Albuquerque, didn't get a raise either. "Raises really depend on the state legislature. We get one about every five years," he estimates.
Overall, the money is starting to flow. "We got a raise this year, but we hadn't gotten any for a few years before," says a storage architect at a Fortune 100 company based in Pennsylvania.
Compared to 2003, the government/nonprofit and IT services sectors gained the most in 2004 in terms of raises, an almost 6% increase. By region, the Southwest, Rocky Mountains and Southeast had the largest year-to-year raises, averaging more than 6%, followed by New England and the Pacific.
The WAN/LAN administrator, who also has responsibility for storage at a large government contractor in New Hampshire, didn't get a raise this year. "Whether we get one next year depends on the election, and if our contracts get renewed," he says. Hiring has also been frozen, except to replace people who have retired, he reports. He's looking to get out.
Several people interviewed for this article say storage gets little respect as a professional discipline. Those versed in storage are often lumped with systems, network and database administrators. The latest survey suggests this may be changing.
Although respondents, on average, spend almost half their time (48%) on storage -- more than double the time spent on servers, applications, networks or databases -- many companies fail to look at storage as a discipline in its own right. Among respondents, approximately 40% work in dedicated storage groups, second only to those working as part of systems administration groups (42%). Last year, 34% worked in a dedicated storage group compared to 48% in a systems group. The change is a positive sign that storage is gaining recognition as an IT discipline, although there appears to be no salary advantage to working in a dedicated storage group.
Part of the respect problem results from the gap between top management's perception of storage and the reality. "With such a high percentage of the IT budget allocated to storage, the importance of storage is increasing and the perception gap is closing," says Datalink's Westling.
Among the survey respondents who knew their employers' IT budgets, 66% reported storage as accounting for 25% or less of the IT budget. Only 3% reported it as more than 25% of the IT budget.
"How storage is treated and organized is a function of the size of the company and the role storage plays in the business," says Robert Half Technology's Phillips.
The University of New Mexico just formed a dedicated storage team in 2004, following the implementation of an enterprise resource planning system that drove storage growth to 400% a year for several years. Although that growth is expected to slow in future years, the university organized five people from systems and network disciplines into a dedicated storage team. "It is a dedicated team, but each person still has responsibilities in other areas. Even the team leader only works on storage 50% of his time," says UNM's McQuade. McQuade may have the most storage experience, but his focus is strategic planning. Still, he manages to involve himself in leading-edge storage initiatives at the university, such as a continuous data protection implementation of Revivio and a SAN virtualization effort using IBM Corp.'s SAN Virtualization Controller.
The city of Norfolk, Va., also experienced a centralized storage growth spurt, jumping from 100 GB three years ago to 6 TB today. A team of four database administrators manages the storage as part of the networking group. "I wanted to hire a dedicated storage person, but the position didn't get funded," says Hap Cluff, Norfolk's director of IT. He managed to get small raises, approximately 2.5%, for his IT staff. He'll try again to bring a dedicated storage administrator on board for the next budget cycle.
If storage isn't a place where people will get rich quick, it does provide decent pay. And with the demand for storage showing no signs of slowing, the need for storage professionals will only increase.
About the author: Alan Radding is a regular contributor to Storage magazine
The data used in this report was gathered through an e-mail survey in October 2004. The survey was sent to Storage magazine subscribers. More than 220 people responded. Telephone interviews were also conducted with selected survey respondents and others who manage storage.