Overview

As we consider 2010 and the expected (albeit small) increase in IT spending,[1] reducing risk and costs still reign supreme.  However, continued focus on improving business processes will trigger the introduction of new business systems, upgraded applications, virtualization, and IT service delivery improvements.  The impact on data protection?  Change—and lots of it.  Organizations will, therefore, have to optimize their data protection infrastructures to support the changing IT landscape as well as contend with unabated growth—all while minimizing the risk of downtime, non-compliance, and security threats.

Top Trends in 2010

Some of the issues that will matter most in 2010 to the data protection market include:

1. The shift from tape to disk: the modernization of backup continues. Ranked as the #3 overall 2010 IT priority by ESG’s IT Spending Intentions survey respondents, “improving data backup and recovery” takes priority over a number of other IT initiatives.  In 2010, disk-assisted data protection will continue to dominate backup and recovery improvement projects.  While tape-based strategies are often required and even desired for long-term retention, the introduction of disk to improve the speed and reliability of backup and, importantly, recovery is a top consideration for companies of all sizes—especially as deduplication changes the economics of the investment.
2. Dealing with data growth: integrated archiving for storage optimization. While the focus of much industry discussion over the last few years has been on the compliance and records retention benefits of archiving, its storage optimization advantages are not being ignored—by customers or vendors.  Policy-based archiving processes integrated in data protection platforms are being combined with data deduplication by IBM, Atempo, CommVault, and Symantec to manage storage growth on primary and secondary storage systems.  With nearly half of ESG survey respondents citing cost reduction as the top business initiative influencing IT spending decisions in 2010, archiving could emerge as compelling a technology as deduplication.
3. Deduplication: it’s a feature, not a market. Deduplication took center stage in the data protection world fueled largely by new entrants, patent infringements, and a two billion dollar battle for Data Domain.  Adoption is taking hold due to the economic benefits it affords those using disk-based backup and recovery.  While hardware-based solutions from EMC/Data Domain, Exagrid, FalconStor, HP, IBM, NEC, Quantum, and SEPATON garnered early mindshare, adoption is still relatively low.  Following the early leads of EMC Avamar, Symantec PureDisk, and Asigra, which delivered deduplication as a feature of backup software, nearly all of the major players in the backup realm introduced data deduplication as a feature of their solutions, including Acronis, Atempo, BakBone, CA, CommVault, and IBM.  This trend will continue in 2010, providing more choices to end-users looking to reduce the burden of capacity glut on their backup infrastructure.
4. Protecting virtual servers: complacency acquiescing to optimization? Server virtualization is often an incremental journey or iterative approach where greater cost optimization and process efficiency improvements accompany virtualization maturity.  Organizations in the early stages of server virtualization deployment (less than 20% of the server environment is virtualized) are crossing the threshold and moving from “most familiar” to “most optimized” when it comes to data protection.  Specifically, IT is taking advantage of techniques and tools available in hypervisor platforms and/or backup applications to optimally protect workloads.  IT’s ranking of virtualization implementation and backup/recovery improvement as high-priority initiatives in 2010 should guarantee optimization all around.
5. Replacing backup: are snapshot and replication just good enough? As server and storage environments are re-architected as part of data center consolidation projects, so too are data protection processes.  An alternative to traditional backup approaches is the combination of snapshots (consistent point-in-time copies of changing data) and file- or block-level replication across a communications pipe synchronously or asynchronously—an approach advocated by storage leader NetApp and other vendors such as FalconStor.  Incremental copies and deduplication features alleviate storage consumption—and costs—making the approach an interesting proposition for data protection.
6. DR for the everyman: enabled with virtualization and cloud. Respondents to ESG’s IT Spending Intentions research ranked virtualization and business continuity/disaster recovery (BC/DR) among the top 10 IT priorities for 2010. While improved business continuance and lower operating costs are driving server virtualization adoption, reduced cost and complexity for DR and DR testing is perhaps an even more compelling proposition—extending DR to workloads where it didn’t exist before.  Host- and network-based replication from CA, Double-Take, EMC, FalconStor, and InMage are well positioned to take advantage of this trend. While cloud computing may be less of a reality for many organizations, leveraging cloud services for DR—especially for organizations without a second site—is likely to become more pervasive, although not at the speed that the market hype might lead one to believe.
7. Virtualization’s changing roles: where is the backup administrator in backup? Early adoption of server virtualization has been focused on the 15-20% of servers under IT’s control in the data center.  Consequently, data protection decisions often reside with the server administrator or IT resource responsible for the virtualization initiative.  Two trends are emerging: 1) net-new backup solutions, especially from virtual server-only vendors such as PHD Virtual, Veeam, and Vizioncore, are being deployed in newly virtualized environments in lieu of tenured backup solutions and 2) roles and responsibilities have shifted within IT organizations, changing the “powerscape” in favor of the “virtual server guy.”
8. Commercial-grade cloud-based backup: are the economics there yet? Lower bandwidth costs coupled with virtualization and WAN and storage optimization technologies have been a boon for service providers as they enable cloud-based backup models.  While “hybrid” on-/off-premises models from Asigra, Axcient, Barracuda, i365, IBM, Iron Mountain, SunGard, Symantec, and VaultLogix dominated in 2009 by creating better feasibility to back up and recover larger data sets, there are still more speed bumps to overcome.  Specifically, the economic model is still not in place to make backup Software as a Service (SaaS) and/or cloud-based backup storage commonplace.  To accelerate adoption, service providers will need further optimization to lower the total cost of ownership for cloud-based backup models vs. incumbent on-premises offerings.
9. Desktops/laptops: changes in attitudes? While there is inherent risk to information in endpoint devices—especially mobile ones—data protection for laptops and desktops has been of little concern for IT organizations.  2009 saw the introduction of several data protection solutions for PCs and Macs, including consumer- and commercial-grade backup SaaS (IBM FastProtect), continuous data protection for files (HP Notebook Extension), image-level backup/recovery (Acronis Backup and Recovery), and backup agents integrated with server-based backup products (EMC Avamar).  As IT organizations get more serious about desktop virtualization and upgrades to Windows 7, backup and recovery initiatives for endpoints may in turn get a more serious review than in years past.
10. Compliance: where does the buck stop? Avoiding or reducing risk to business activities is a top concern for IT; meeting compliance mandates will continue to rank highly in 2010. Stringent privacy and data protection laws from the state and federal levels are inevitable. The federal stimulus bill calls for digitizing health records in five years as well as strict privacy and security controls to protect this online data. The big impact could be on cloud storage and backup SaaS providers as regulations shift more responsibility for privacy and availability to third-party providers.  There’s an opportunity for data protection reporting solutions, such as Aptare, Bocada, EMC, and Tek-Tools to report results that prove compliance with policy.

The Bigger Truth

2010’s IT and business priorities will initiate change in the IT infrastructure that win in turn power business.  Data protection people, processes, and technologies will not only need to keep pace with these transformations, but ultimately become optimized for them.  Unrelenting forces such as data growth and new regulatory compliance requirements will compound the task, compelling IT organizations to enforce policies that better manage their information assets and supporting infrastructure—and better meet internal and external requirements.  Of course, the implications of these trends have to be reconciled with the budgetary realities of 2010.

The result?  The inevitable transformation of data protection environments.  Some organizations may embrace wholesale change—which typically accompanies re-architected server and storage environments—while others may opt for incremental, evolutionary enhancements.  Either way, there will be no shortage of opportunity for data protection vendors in the coming months.  Those best prepared to capitalize on changing industry trends and customers’ high-priority initiatives will be well positioned for success in 2010.

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52% of organizations surveyed say they will increase IT spending in 2010.  Among those increasing spending, the average year-over-year increase will be 5.3%.  For the market as a whole, the average year-over-year IT budget change will be 1.7%. (Source: ESG Research Report, 2010 IT Spending Intentions Survey.  Data collected December 2009.  Final report to be published January 2010).