Telstra launches into storage services

Telstra has officially lifted the lid on its plans to plough resources into becoming a Storage Service Provider (SSP), after inking a deal with storage vendor EMC.

As of mid-July Telstra will begin offering customers access to storage infrastructure on a pay-as-you-go basis, but is not yet in a position to make the pricing details public.

The telco is throwing increasing emphasis on managed services, already offering applications and security services over its network on a rental model. According to Barry Grisdale, chief of enterprise services at Telstra Retail, its existing portfolio of managed services is already grossing around $440 million in revenues per year. He also said 81 per cent of Telstra's largest 100 customers are using one or more of its managed services, up from 21 per cent in 1998.

Telstra has now indicated it wants to own the burgeoning storage services market. "We are adopting a position that takes us ahead of the pack," said Grisdale. "Telstra will be a leading player."

A spokesman for Telstra said a new data centre is currently being built in Sydney, housing hardware and software from EMC as well as the necessary networking equipment Telstra already uses. Grisdale said the telco will take the process of building up infrastructure cautiously, not wanting to build too much on the hope customers would come knocking.

Grisdale does not believe however, that the SSP model is hard to sell because customers are generally keen to manage their own data. "Given that Australia is fairly advanced in the outsourcing market, I don't see it as an issue," he said. "Australian businesses have grasped and embraced the concept of outsourcing already."

EMC and Telstra are sharing both the risk (making an investment) and the rewards (revenues) from the partnership. The services will be sold through both Telstra and EMC salespeople, but EMC Australia managing director Paul Frith does not believe it will clash with EMC resellers or even its own direct sales force.

Grisdale said Telstra has not considered offering these services to its reseller base (such as ISPs) but would not rule out the possibility of offering a wholesale model when attacking the SME market at a latter date.

"At the end of the day, this is something Telstra wishes to do," he said. "Because right now, the focus is at the top end."