AT&T introduced an email archiving service, joining other telecommunications companies that are trying to persuade corporate users to add outsourced and managed storage services to their voice and data contracts.
AT&T says it will use EMC's Centera disk array with message-archiving software developed by KVS to run the new service. The archiving capabilities are aimed at users who want to offload the e-mail retention, documentation and retrieval work mandated by regulations such as the Sarbanes-Oxley Act and SEC Rule 17a-4.
Rivals such as Verizon Communications, MCI and Qwest Communications International also are trying to leverage their copper and fibre-optic lines to transport data to managed storage facilities or to help companies extend their storage-area networks (SAN) to off-site disaster recovery data centres.
But at the Storage Networking World conference in Phoenix, several IT managers said they're wary of outsourced storage services after a group of storage service providers quickly foundered and died over the past few years.
Outsourcing functions such as data archiving and SAN management aren't attractive to many large companies because they already have sufficient internal resources to do the work, says Mark Detert, director of data centre and automation operations at Visa U.S.A’s debit processing services unit in Englewood.
Andre Mendes, chief technology integration officer at the Public Broadcasting Service in Alexandriasays from what he has seen, managed storage services are not yet "fully baked."
"If it could be guaranteed to have the same availability as a well-architectured (internal) storage network, then we're getting there," he says.
Mendes adds that talented storage administrators are easier to find and less expensive to hire than they were four or five years ago. "We're not likely to experience a shortage of personnel anytime soon," he says.
But in December, Tribune in Chicago hired AT&T to extend its disaster recovery architecture and manage its storage infrastructure. "One nice thing with them is they formed really good partnerships with Nortel and Sun," says Darko Dejanovic, chief technology officer at Tribune and its Tribune Publishing subsidiary. "The whole solution worked really well between the three of them."
In an interview prior to Storage Networking World, Dejanovic said he decided to outsource the extension of the media company's SAN to a secondary site three miles from its main data centre because doing the work in-house would have been cost-prohibitive. "It's the traditional insurance argument: How much risk do you take as opposed to how much you're willing to invest," he said.
The new architecture provides real-time access to fully mirrored data and applications, Dejanovic said. The Tribune had a backup site prior to signing on with AT&T, but it was smaller and allowed only partial backups.
Doug Chandler, an analyst at research firm IDC, says he doesn't think telecommunications vendors are really filling the gap that was left by failed storage service providers like Storage Networks and Storability.
"They're supplying the network pipes for some customers who are doing replication over long distances, and some telcos may have some storage-specific services," Chandler saus. "But for the most part, they're not managing a lot of storage capacity themselves."
Electronics retailer blames IT for financial woes
Ann Bednarz, US
PROBLEMS installing new software are partly to blame for Ultimate Electronics's disappointing financials, according to Dave Workman, president and CEO of the Denver-based consumer electronics retail chain.
Ultimate Electronics reported this week that it lost US$6.3 million in its fourth quarter, which ended Jan. 31; comparable store sales declined 9%. The 65-store retailer says its gross profit margins suffered in part because of "higher inventory shrink" - which generally refers to products that are stolen or lost along the supply chain - due to integration issues experienced with the company's new management information system.
The company did not immediately respond to requests to identify the vendors that supplied the troublesome applications. However, filings with the US Securities and Exchange Commission indicate the system wasn't inexpensive. In its 10-Q filing for the quarter ended July 31, 2003, Ultimate Electronics reported spending about $23.5 million on the new management information system from inception of the project through the end of July, plus about $500,000 in August and September to finish the rollout and provide implementation training.
"We are extremely disappointed with our sales, profit and operating results from last year," Workman said in a statement announcing Ultimate Electronics' fourth-quarter results. He cited struggles in the first part of the year, including ineffective advertising, slowing demand, competitive pressures and a dilution of skilled personnel resulting from corporate expansion.
New software exacerbated the problems: "In the third and fourth quarters, these issues were compounded by the unexpected problems we experienced following our September conversion to a new management information system," Workman said. "We experienced problems with inventory visibility, product distribution, commission calculations, reporting and processing of service repairs."
For the year ended Jan. 31, Ultimate Electronics lost $15.8 million, compared to year-earlier profit of $4.7 million. It finished the year with $113.9 million in inventory, up 7% over the previous year's closing inventory levels.
Ultimate Electronics hopes to make 2005 its turnaround year and is identifying and implementing sales, operational and cost-cutting initiatives, Workman said. The company also retained a turnaround specialist, Peter Hanelt.
Orchestrating a comeback will require making up for a slow start to fiscal 2005, however. Workman said sales for the first two months of the fiscal year declined about 6 percent over the same period last year, and comparable store sales fell about 15%.
Plus, IT glitches still exist. "Although we have corrected most of our system issues, we continue to encounter problems with our management information system related to inventory and distribution and are working on resolving these issues," Workman said.