The much-touted storage service provider (SSP) model has been dealt a blow with revelations that Storability closed its Asia-Pacific headquarters in Brisbane last week and retrenched all of its staff.
The US-based company established its Asia-Pacific base in Australia last year, riding on momentum that the SSP model was set to take off. However, in six months of operations the company had yet to sign a single corporate customer, one source told ARN.
The provision of managed storage for a monthly fee is a model that has been heavily backed by analysts and industry pundits, but the collapse of Storability's Asia-Pacific operations has some people cooling their heels on the model's viability.
The SSP market was anticipated to boom in 2000, with Gartner DataQuest figures predicting the market would grow from $US89 million last year to $7.5 billion by 2003.
"What this [closure] says about the [SSP] market is that the model is taking a little while to develop in Australia and New Zealand," claims Graham Penn, research director of Asia/Pacific storage for IDC.
Penn argues that Storability offered onsite storage management, in which the company did not have to invest in its own infrastructure, as opposed to the standard SSP model, where the provider purchases and manages the infrastructure from its own central location.
According to Penn, the company grew with venture capitalists in the US, but had been adversely affected when the dot-com bubble burst midway through last year.
Storability was also a relative newcomer to the Australian market, and many believe this to be part of the reason for customers' reluctance to hand over the management of their mission-critical data.
Simon Bills, Quantum ATL general manager A/NZ, who was looking to use Storability as a new route to market for Quantum's tape libraries, claims the SSP's Asia-Pacific closure comes as "a bit of a shock".
He claims that while corporates want managed storage, they are unwilling to place blind faith in a relatively new business model.
"People are crying out for it, certainly the guys who are managing storage, but at the end of the day it's whether someone is willing to pay for it - the people who hold the purse strings," Bills said.
"It costs five times as much to manage storage as it does to buy it, and in the US I've heard the SSP model is working quite well," he said. "But maybe the Australian market is so small it is going to take one or two big customers to take up this option to validate the model."
"The jury is still out for the SSP model," he added.
A Storability spokesperson confirmed the closure of the Asia-Pacific headquarters, but refused to comment further.Photograph: Simon Bills