Wednesday, February 27, 2013

Is Cloud Data Storage right for you?

Many companies carry several Tera Bytes of archive data. Data that is no longer active and almost never used, but must be saved and stored for legal or regulatory purpose or just in the hope that some information may be needed in future. Archive data keeps growing by exponentially as number of employees and number of interactions increase. The growth in data volumes can overwhelm the IT staff in small or medium size companies - leading to runaway costs and management efforts.

With ever increasing costs and complexity of archiving huge amounts of data - IT departments are continuously looking for ways to simplify data archival and storage - both in terms of managing complexity and costs.

Enter the Cloud

Cloud storage offers a new opportunity to bring storage costs and management challenges under control. By archiving data to the cloud, organizations can reduce not only the amount of storage capacity that they need to purchase, but also the operational overhead involved in managing it. In addition, the cloud enables storage capacity to be increased on demand, while charging only for the amount of storage that is actually utilized.

There are very compelling reasons to store archival data in the cloud while giving management capability Cloud storage offers some unique benefits which include: The same capabilities that are required to integrate cloud storage into existing environments can also offer benefits in traditional environments. These benefits include:

  1. Reduced storage costs. 
  2. Optimized backup infrastructure. 
  3. Increased operational flexibility with lower overhead. 
  4. Flexibility to easily integrate cloud and other new technologies when  and where appropriate.

Cloud Storage will provide unlimited, scalable, reliable and secure data storage  These scenarios share a few common factors:

  1. Large size storage 
  2. Storage size keeps growing but needs to be accessed relatively infrequently
  3. Data Storage must be secure and reliable.

A cloud-enabled infrastructure can help your organization maximize the capital and operational cost savings from cloud storage. In addition, it enables the flexibility to seamlessly integrate the cloud when ready.

Typical Use Cases for Online Data Archival

  1. The government rules or Industry norms require companies to store all data  for a long period of time. This data may never be accessed or viewed, unless there is a planned audit or verification need.
  2. Companies have a huge mail archive, which is required for reference only. The entire email archive can run into several Tera bytes and it is a huge in-house storage cost for your organization because you have to back it up, and ensure its availability and data security.
  3. Companies have a huge stack of documents and they are required only once a year for reference. Documents of former (retired/resigned) employees. These documents are for internal HR system references. They might be used only when an employee is rehired or when a reference check is required.
  4. Companies have a big Supply chain management or ERP system, which has millions of transactions. The ERP or transaction systems are generating thousands of POs, SOWs and other documents every day and this needs to be archived and stored for auditing at the end of each month.

This type of data can run into several tera bytes and it is required to be stored for business and legal purposes. And if this data is not frequently used, then it is best to be archived with a cloud service provider.

Factors to be considered

There are three factors that needs to be considered before opting for a cloud data storage:

1. Cost & Data Security

One good reason for customers to migrate to cloud storage is costs. Cloud storage service providers can leverage economics of scale and better data compression, data deduplication and data security technologies - which can lead to lower costs when compared to in-house data storage. For example, cutting edge data deduplication can give 50-to-1 reduction in data volume that needs to be archived. But such data deduplication technology is expensive and requires a high level of in-house technical expertise

Data security is another major concern for companies. When Chinese army hacking networks  to steal industrial secrets, small and midsize companies cannot afford to fight alone in the ever escalating cyberwar. So it is best to align with the big & best cloud service providers who can afford to deploy the best cyber security systems.

Also see:
1. Security group suspects Chinese military is behind hacking attacks
2. Chinese Hack Attacks Grow More Professional, Persistent

Amazon Glacier service is priced at $0.01 per GB! This price is lower than the total costs incurred by a midsize enterprise. Also since the archived data is deduplicated, encrypted and stored off-line, Amazon can offer a higher level of security than most mid-sized enterprises. Only the top fortune-100 companies can afford in-house data storage that can match Amazon's costs and security.

Please note that Cloud storage costs involves network bandwidth costs and other costs. So watch out for other hidden costs: data access costs, data migration fees and both internal/external support costs.

2. Technical viability - Time to data store and retrieval

Online data storage requires heavy network bandwidth and it takes time to store data. Companies must have technical capability to centralize and manage online data storage. The cloud based data storage system must be able to scale - both in terms of data volumes and network bandwidth to match the growth of data volumes begin sent for storage. Companies must have the ability to store huge volumes of data and retrieve it quickly when needed. This calls for certain capabilities at the customer IT skills and network bandwidths. Data deduplication at source can reduce the total volume of data transferred to the cloud.

Data retrieval is another major challenge - since archival data is stored off-line, it takes time to restore from the remote back up and it involves higher costs. Cloud service provides typically charge a much higher fee for data retrieval. So in case of disaster recovery, online cloud storage will take longer time to restore normal operations.

3. Legal & contractual aspects

Cloud data storage has its benefits in terms of lower costs and greater reliability & flexibility. But storing data in the cloud has several disadvantages and risks. Apart from the obvious risk of unintended breach of security and loss of sensitive data to hackers, (see the case of Sony and Honda) leading to severe losses on privacy and intellectual property.

When the cloud service provider is hacked and your company's precious data is lost, then your company is at legal risks from law suits from customers and vendors.

Cloud computing will also increase legal risks as well. All data stored in US location or stored with an American firm - such as Google, Amazon, Microsoft, RackSpace, SAP, Oracle,, HP, IBM, etc., is subject to American laws, thus US government can access your data - and you can do nothing about it and watch as a  mere spectator.

According to Gordon Frazer, the managing director of Microsoft UK, he could not guarantee that data stored on Microsoft servers, wherever located, would not end up in the hands of the US government, because Microsoft, a company based in the United States, is subject to US laws, including the Patriot Act. (Source: )

US government can demand access to your company's data under Patriot Act or other acts, and the cloud service provider is bound to provide that data without your consent! According to the current rules: An entity that is subject to US jurisdiction and is served with a valid subpoena must produce any documents within its "possession, custody, or control."

That means that an entity that is subject to US jurisdiction must produce not only materials located within the United States, but any data or materials it maintains in its branches or offices anywhere in the world. The entity even may be required to produce data stored at a non-US subsidiary. This also implies that, all companies that have a branch office in the US are subjected under US Patriot Act - thus US government can get access to your data even if the data is hosted outside US and by a non-US company - if that company has a branch office in the USA.

This provisions in the US law is a big risk. US Government has the means and ways to decrypt your data and then pursue legal actions or even covertly pass that data to other US competitors.

Risk increases further when you realize the fact that other countries can also pass similar laws in future.

Storing data in the cloud has several legal risks. The best solution is not to store sensitive or valuable data in the cloud.

Also See:  Big Legal Risks with Cloud Computing

Closing Thoughts

Cloud storage to archive data is a cost saving option for mid sized organization. Cloud storage offers lower costs and greater flexibility while reducing technical complexity - but it also increases risks of data loss and legal issues that can result by other accessing your precious data.

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