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Data overload: Where do we keep it all?

Growing amounts of data are fitting into sleeker storage units, and some bay area companies are driving the miniaturization.

By Madhusmita Bora, Times Staff Writer
Published April 23, 2007

ADVERTISEMENT [Times photo: Joseph Garnett Jr.] Clearwater-based Tech Data is growing an infrastruture solutions department. There, Ramon Auders programs a server for some of the company's clients.

With its tentacles spreading across the globe, Largo-based ConMed Linvatec was sprinting ahead of its data center that stores, processes and manages critical company information.

The surgical-device manufacturer needed sleeker machines that jibed with the latest software in the industry. It needed devices that could handle enormous amounts of data, process complicated information at a super-fast rate and integrate multiple operations.

ConMed Linvatec was willing to shell out more than $1 million for the upgrades. And it did.

The company replaced two server and storage systems the size of 10 refrigerators with one the size of a mini bar.

"The difference is very noticeable," said Mark Knipp, management informations systems manager. "The new machines are extremely fast and very powerful."

ConMed Linvatec joins a wave of businesses bidding adieu to old, clunky, sprawling equipment and investing in newer, smaller integrated and more efficient storage and server units. Some of the newer machines can store data equivalent to the Library of Congress and they can process information faster than ever before.

Nudged by a new generation of products, worldwide server market revenues exceeded $52-billion in the fourth quarter of 2006, according to IDC, a technology market research firm. A Robert W. Baird study released last month predicts an even rosier future. Computer product resellers surveyed in the study predicted an average growth of 87 percent this year for the more-sophisticated server market.

The story is similar in the storage sector, where regulations such as Sarbanes Oxley - a post-Enron law - that requires companies to retain larger amounts of corporate information, triggered a business boom.

"It is clear that both large and small organizations across the world are investing aggressively to simplify ... their IT infrastructures," Matthew Eastwood, program vice president of IDC's Worldwide Server Group, said in a release.

The trend has at least two area giants - Tech Data and Jabil Circuit - grinning.

Clearwater-based Tech Data created a division to cash in on the phenomenon. The advanced infrastructure solutions department with its 50 employees is aggressively recruiting customers and striking partnerships with technology vendors in the storage and server industries.

"This is the first major investment by Tech Data to have a specialized division," said Pete Peterson, senior vice president and general manager for the division. "The charter is to build a business model to support what we are seeing as phenomenal growth opportunities."

The company plans to add 25 to 30 employees over the next year to meet the market's demands.

Concentrating on the new segment is a smart strategy, said Brian Alexander, an analyst with Raymond James.

"It's a better growth area than their core business and has higher margins," Alexander said. "It's not going to be anything that draws the attention of Wall Street in the short run, but it's an important strategic change representing the aggressive nature of the new CEO in going after a new market."

Tech Data said plans for the division were in motion before CEO Bob Dutkowsky joined the company in fall 2006. But it gelled with his idea of having the company pursue higher growth markets.

"There is a sea change in the way customers are using information technology to better their business," Dutkowsky said. But Tech Data isn't alone in eyeing profits from the emerging segments.

At St. Petersburg's Jabil Circuit, the computing and storage sector grew to 11 customers ringing in more than $1.2-billion this year from seven customers generating $700-million in 2003.

"People don't throw away their stuff anymore," said Tim Main, president and CEO of Jabil Circuit. "There's a huge explosion ... and it's of great value for Tech Data and a great segment for Jabil Circuit."

The increasing market demand is challenging manufacturers like Hewlett-Packard to dole out better and more efficient products at a faster pace.

But it's almost like racing against time.

"Customers have an insatiable appetite to consume," said Paul Miller, an HP vice president.

"Each time we increase computing and storage capacity, they find a way to consume and use it all up."

Madhusmita Bora can be reached at mbora@sptimes.com

The boom to process and store data

Why such a demand?

Companies are growing more data-intensive with the spread of technology and increasing corporate size. And laws such as Sarbanes-Oxley require companies to retain more information for regulatory purposes.

What's so new?

Size and capacity. Storage units once the bulk of industrial refrigerators are now the size of mini bars. And increasingly cheaper.

Where's the biggest growth?

Storage systems and servers catering to small and midsized companies with 250 to 5,000 employees.

Projected average growth for this sector?

87 percent this year and 81 percent in 2008, according to a Robert W. Baird study. "Each time we increase computing and storage capacity, customers find a way to consume and use it all up," said Paul Miller, a vice president at Hewlett-Packard, a prominent maker of servers.

Server anatomy

A single unit can house multiple servers for different applications ranging from processing e-mails to running an accounts payable database. Ten years ago, servers came with single processors. Now they can have up to eight.

New storage capacity

Can contain petabytes of storage. One petabyte is equal to one quadrillion (a 1 with 15 zeros) bytes and can hold the Library of Congress.

A decade ago, a typical storage unit could accommodate up to 10 gigabytes, that's one-third the capacity of some iPods.

[Last modified April 20, 2007, 22:21:39]