Secure, Reliable and Compliant: How the Cloud Can Make Archiving Profitable for the Channel

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Organizations of all types – small businesses, professional organizations, government agencies, associations, and larger enterprises – have statutory obligations to retain important records sent, received and stored in their email systems. Moreover, organizations of various types, including government agencies, must also retain data for purposes of eDiscovery and similar types of obligations. Use of cloud-based archiving solutions offers a secure, reliable, compliant and profitable option for the channel.

This white paper explores the various obligations that organizations have to retain email and other content, and it explains the benefits to service providers of using cloud-based services to meet their archiving obligations. This white paper also provides a brief overview of Sonian, the sponsor of this white paper, and their relevant channel offerings.

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Secure, Reliable and Compliant: How the Cloud Can Make Archiving Profitable for the Channel

  1. 1. WHITE PAPER Secure, Reliable and Compliant: How the Cloud Can Make Archiving Profitable for the ChannelN An Osterman Research White Paper Published July 2011 SPONSORED BY sponsored by SPON sponsored by Osterman Research, Inc. P.O. Box 1058 • Black Diamond, Washington • 98010-1058 • USA Tel: +1 253 630 5839 • Fax: +1 253 458 0934 • info@ostermanresearch.com www.ostermanresearch.com • twitter.com/mosterman
  2. 2. Secure, Reliable, and Compliant: How the Cloud Can Make Archiving Profitable for the ChannelEXECUTIVE SUMMARYOrganizations of all types – small businesses, professional organizations, governmentagencies, associations, and larger enterprises – have statutory obligations to retainimportant records sent, received and stored in their email systems. Moreover,organizations of various types, including government agencies, must also retain datafor purposes of eDiscovery and similar types of obligations. Use of cloud-basedarchiving solutions offers a secure, reliable, compliant and profitable option for thechannel.KEY TAKEAWAYS• Organizations of all types and sizes must implement email archiving capabilities that will permit them to capture very large amounts of information, retain it for many years (or indefinitely in some cases), and produce it as accurately and as inexpensively as possible.• IT budgets for the deployment of new infrastructure are often flat or declining because of flat revenue or the need to increase profitability. Organizations of For customers, cloud-based archiving offers more predictable costs over time,• very high scalability, rapid deployment, highly secure storage and high all types and sizes availability – all critical requirements when storing and managing content. must implement• For channel partners, cloud-based archiving should seriously be considered as a email archiving means of satisfying customer demand for content retention and as a means of capabilities that creating a profitable revenue stream. will permit themABOUT THIS WHITE PAPER to capture veryThis white paper explores the various obligations that organizations have to retain large amounts ofemail and other content, and it explains the benefits to service providers of usingcloud-based services to meet their archiving obligations. This white paper also information,provides a brief overview of Sonian, the sponsor of this white paper, and their retain it for manyrelevant channel offerings. years, and produce it asWHY YOUR CUSTOMERS NEED TO ARCHIVE accurately and asORGANIZATIONS HAVE AN OBLIGATION TO RETAIN DATA inexpensively asEvery organization – regardless of its size, the industry it serves or how much data itpossesses – must retain important records for various lengths of time. The possible.requirement to retain data is imposed from a variety of sources, including legalprecedent in which courts establish standards for the length of time that data mustbe retained, statutory obligations that specifically define the retention and productionobligations for certain types of data, and internal best practices. Retentionobligations apply for all forms of data, both physical and electronic.Organizations “non-regulated” industries are no exception to retention requirementsand, in fact, can face just as many obligations as “regulated industries”. In fact, thedistinction between non-regulated and regulated industries is a false dichotomy –there are only heavily regulated industries like financial services, healthcare, energyand pharma; and more lightly regulated industries. Moreover, we can expect thatoversight and management of data will become stricter and more expansive in thefuture as requirements only get more stringent and more difficult to satisfy.NON-STATUTORY CONSIDERATIONS ARE ALSO IMPORTANTHowever, aside from the statutory and related types of requirements to retain datafor long periods, there are four important reasons for organizations to implementarchiving technology:©2012 Osterman Research, Inc. 1
  3. 3. Secure, Reliable, and Compliant: How the Cloud Can Make Archiving Profitable for the Channel• To meet eDiscovery requests and reduce related costs By managing eDiscovery with a centralized archive, organizations are generally much more capable of handling the needs of lawsuits and the courts. In addition, proactively addressing this function in a systematic way can significantly reduce overall eDiscovery costs and speed the entire process, particularly for organizations that have frequent or extensive legal requirements.• To reduce IT costs By migrating data from more expensive storage on email servers and other data stores, archiving can reduce overall storage costs by placing older data into less expensive archival storage systems. This can significantly reduce overall data management costs, particularly for larger agencies that store voluminous amounts of data.• To improve storage management Records An archiving system can make storage management much easier by indexing content and making it more easily discoverable and accessible. This is generated and particularly important for agencies that must respond to sunshine-law or received by Freedom of Information Act (FOIA) requests frequently, since it minimizes the organizations amount of time that employees must spend searching for, filtering through and producing data for requestors. must be preserved, in• To improve email system performance An archiving system can dramatically improve email system performance by some cases, for minimizing the amount of “live” data that must be stored on email servers. many years or Because email messages and attachments older than 30 days are not accessed frequently, it makes sense to migrate this content to an archiving system for even indefinitely. purely functional considerations. Doing so will reduce the amount of time This creates an required to backup email servers, it will speed the restoration of a server from backups when necessary, it will reduce the amount of overall downtime enormous experienced in the email system, and it will make message delivery faster. problem for organizationsPROBLEMS THAT ORGANIZATIONS FACE that do not haveThere are four serious problems that organizations face in the context of their data the indexing,management practices and obligations: storage and• Email is the de facto communications and file transport mechanism extraction For most organizations, email has become the primary method for capabilities in communications and for sending files. While email is useful in this regard, using it in this way means that a large proportion of records that must be retained for place to manage long periods get stored in email systems and not in dedicated archiving or other this information systems focused on content management. If this content is not archived appropriately, it can become lost as a result of server crashes, data corruption or properly. accidental deletion of information. Even if it is not lost, extracting needed content from an email server or a backup tape is arduous, expensive and time consuming.• Content must be retained and readily available Records generated and received by organizations must be preserved, in some cases, for many years or even indefinitely. This creates an enormous problem for organizations that do not have the indexing, storage and extraction capabilities in place to manage this information properly. Poor content management can result in an inability to produce information on demand, resulting in sanctions, adverse judgments and other negative consequences.• BYOD complicates retention The trend of “consumerizing” IT – that is, employees using their personal devices and a variety of Web 2.0 applications for work-related purposes, or Bring Your Own Device (BYOD) – is increasing. Employees are motivated to do so because©2012 Osterman Research, Inc. 2
  4. 4. Secure, Reliable, and Compliant: How the Cloud Can Make Archiving Profitable for the Channel they have the opportunity to use tools that they select and are specific to their requirements. IT departments are warming to the idea of BYOD, at least for hardware like smartphones and tablets, because employees are willing to bear the cost of expensive communication and collaboration tools rather than requiring IT to pay for them out of their own budget. That said, BYOD can significantly complicate content retention. For example, if users are creating and receiving records on personal devices, this content must be retained as if these records were created and received on agency-owned devices. If they are creating records using Twitter, Facebook or other Web 2.0 applications, this content may also need to be retained. However, data must be extracted and retained by the employer, not an easy task for most organizations. Add to this the problems associated with cloud-based applications that are deployed by end users, such as Dropbox or Microsoft Skydrive, that store corporate content in difficult-to-access repositories that are under the control of individual users, not IT. if we assume thatEnormous quantities of data make retention and access more difficult each employee inFinally, another serious problem faced by organizations – even smaller ones – is thatenormous data stores complicate the storage of content, make it more difficult to find a 7,500-employeeand thereby increasing IT costs. For example, if we assume that each employee in a organization7,500-employee organization generates 40 archivable records each day (fivemegabytes of content), and that this content must be preserved for 10 years, this will generates 40generate 750 million records and 89 terabytes of content over that retention period. archivableIn the absence of a robust and scalable storage and management infrastructure,finding content in data stores this large is, at worst, impossible and, at best, very records each day,difficult and expensive. and that this content must beSOLVING THE PROBLEM OF CONTENT preserved for 10RETENTION years, this willAs discussed earlier in this white paper, organizations face some fundamental generate 750problems in the context of their content retention requirements: million records• They must retain a wide variety of data for purposes of satisfying retention laws, and 89 terabytes compliance requests, potential responses to legal actions, and the like. of content over• They must make this data easily accessible to staff members responding to these that retention requests and to others that may need ready access to important data. period.• Given the financial pressures that most organizations are under, they must satisfy these requirements as inexpensively as possible.To solve these challenges, organizations have four options:• Do nothing• Deploy on-premise servers and software• Use a cloud-based archiving system• Use a hybrid approachLet’s examine why the cloud can make sense for many organizations.WHY THE CLOUD MAKES SENSE FOR DATA RETENTIONGiven these critical requirements, here is our view on the 10 reasons that cloud-based archiving makes sense for use by organizations of all sizes and across allindustries:1. Low (or no) initial costs One of the fundamental advantage of cloud-based anything – be it email,©2012 Osterman Research, Inc. 3
  5. 5. Secure, Reliable, and Compliant: How the Cloud Can Make Archiving Profitable for the Channel security, archiving, etc. – is the fact that there are virtually no up-front costs associated with deploying a cloud service. Because there are no initial requirements for the purchase of servers, software and other infrastructure elements as is the case with the on-premise, capital expenditure (CAPEX) model, the cloud operating expense (OPEX) model allows any organization to implement a complete archiving capability with virtually no up-front cost. While there may be some minimal costs associated with IT staff to specify capabilities, ingestion of legacy data and the like, these costs are in almost all cases very low.2. More predictable costs of ownership Similarly, a cloud-based archiving system has more predictable costs of ownership than the traditional on-premise model, largely because the cloud provider defines the costs of the archiving capability up-front and these costs remain constant over the life of the contract. With an on-premise system, there will be periodic requirements to add more storage as more content is retained, which can lead to off-budget costs at inopportune times.3. Lower overall total cost of ownership The combination The combination of minimal up-front cost, combined with more predictable on- of minimal up- going costs, means that cloud-based archiving generally has a lower TCO than on-premise archiving even when a large number of users are supported. While front cost, lower TCO is of benefit to virtually any organization, it is especially advantageous combined with to companies facing tight budgets or government agencies that are facing severe budget cutbacks. In short, the use of cloud-based archiving can help any more predictable organization to meet their content retention obligations and to do so in an on-going costs, affordable manner, and it can reduce IT’s current expenditure obligations. means that4. Rapid deployment of archiving capabilities cloud-based One of the chief benefits of cloud-based services is their ability to be deployed much more rapidly than on-premise infrastructure. This allow organizations to archiving deploy an archiving capability in a matter of a few hours or days, unlike on- generally has a premise systems that might take a few weeks or months or more to evaluate, specify, deploy and configure. Moreover, new capabilities can be added very lower TCO than quickly with cloud-based services, such as the addition of more storage, on-premise archiving of more users’ content, or retention of new content types. archiving even5. Scalable storage when a large One of the more important benefits of cloud-based archiving is that it offers a virtually unlimited pool of storage, one that can be scaled to almost any level to number of users meet increased demand. Although on-premise systems can also provide scalable are supported. storage, scalability is more easily accomplished in the cloud than with on-premise systems.6. A high level of security While some decision makers may be concerned about the security of sensitive or confidential content in the cloud, cloud-based archiving actually offers better security than most on-premise archiving systems can provide. Because cloud providers can afford to pay for more robust security measures than most organizations can afford, cloud security is generally better than what they could hope to provide on-premise.7. Protection against changing storage standards Particularly relevant for many organizations that must retain data for long periods is the need to “future-proof” content against changing storage standards. Because these standards change over time, content stored in on-premise storage systems must be updated periodically to reflect new standards, new media types and the like to ensure that data is still readable 10 or more years after it is initially stored. However, this is not easily accomplished with on-premise archiving systems. With cloud-based archiving, on the other hand, changing storage standards become the provider’s problem and not the problem of the©2012 Osterman Research, Inc. 4
  6. 6. Secure, Reliable, and Compliant: How the Cloud Can Make Archiving Profitable for the Channel organization that is charged with storing data. This not only reduces TCO, but also ensures that records can easily be read for many years.8. High speed search capabilities Cloud-based archiving can provide very high-speed search capabilities, allowing organizations to respond to eDiscovery and other requests very quickly. The ability to search through enormous data stores quickly can reduce the amount of time – and cost – for these searches.9. Highly available storage Archiving in the cloud also results in highly available storage. Cloud-based archiving can provide the same or higher level of uptime as on-premise infrastructure – for example, Amazon’s S3 service guarantees server uptime of 99.99% (no more than 4.4 minutes of downtime per month). Moreover, leading cloud providers replicate content to geographically separate data centers, offering a level of disaster recovery that would be expensive to provide with on- premise infrastructure.10. Significant financial benefits over the long term Finally, cloud-based archiving can deliver significant financial benefits to Cloud-based organizations in two ways. First, by eliminating virtually all up-front expenses, cloud-based archiving can eliminate much of the initial expense associated with archiving can archiving, allowing agencies to shift the bulk of their expenses to future years. provide the same Second, cloud-based services are generally becoming less expensive over time. or higher level of This is not the case with on-premise capabilities, which – because of their significant IT labor component – are becoming more expensive as the cost of uptime as on- labor increases. This will result in greater long term return-on-investment premise benefits for cloud-based archiving over time. infrastructure – for example,WHY CLOUD ARCHIVING BENEFITS RESELLERS Amazon’s S3Many of the benefits of cloud archiving also flow-through to the channel. Here arethe key reasons the channel should considering adding a cloud-based archiving serviceoffering to the solutions they offer their current and future customers: guarantees server• Ease of deployment uptime of There is no infrastructure to deploy and no ongoing IT labor requirements. 99.99%.• Complementary with current offerings Cloud-based archiving can be an excellent complement to current channel offerings.• Immediate revenue generation with high profitability Due to the rapid nature of the deployments and relatively minimal investments, this offering can provide immediate cash flow to channel partners.• Ongoing revenue streams Given the long-term nature of content retention – coupled with recurring, monthly fees – cloud-based archiving offerings can provide an excellent, ongoing revenue stream.CHANNEL PARTNER REVENUENow, how much revenue can a channel partner generate with a cloud-basedarchiving model? If we use Sonian’s pricing, assume that a channel partner willreceive a 50% margin, and assume that 100 new mailboxes will be added per monthover a three-year period, the total revenue generated for a reseller will be $147,600during this period. If we assume 500 new mailboxes added per month, the totalreseller revenue generate over three years will be $738,000. Reseller revenuegenerated at different mailbox volumes are shown in the following figure.©2012 Osterman Research, Inc. 5
  7. 7. Secure, Reliable, and Compliant: How the Cloud Can Make Archiving Profitable for the ChannelThree-Year Reseller Revenue at Different Mailbox Counts Is the partner you’re consider a truly cloud-basedQUESTIONS TO ASKFinally, here are some questions for channel partners to ask when evaluating cloud- archivingbased archiving offerings: company? In• Is the partner you’re consider a truly cloud-based archiving company? In other other words, is words, is their archiving solution designed from the ground up to work in the their archiving cloud? solution designed• Is their solution scalable so that it can handle hundreds of millions or possibly from the ground billions of records? up to work in the• Does the solution provide very high-speed search capabilities so that your cloud? customers can search through hundreds of millions of records in as short a time as possible?What are the certifications that at least some of your customers will require if theychoose to use cloud-based solutions?SUMMARYOrganizations face significant hurdles in meeting their complex and growing contentretention challenges. Cloud-based archiving offers many significant advantages toorganizations of all types and sizes, and should be added to the mix of offerings forservice providers.ABOUT SONIANSonian, the pioneer in Cloud Powered Archiving and Search, offers it’s archivingsolutions at a fraction of the cost and complexity of other approaches. With over8,000 customers across diverse industries and embedded into offerings from othercloud innovators – Sonian is the future of Archive and Search in the Cloud.While driving down costs is an integral part of our business model, so is developingdifferentiating technologies. The challenging aspect of acquiring and making©2012 Osterman Research, Inc. 6
  8. 8. Secure, Reliable, and Compliant: How the Cloud Can Make Archiving Profitable for the Channelpetabytes of data search-able was a formidable hurdle Sonian achieved over the past4 years. Several years ago, we perfected using the cloud to deliver a million searchhits within seconds. Today we are delivering that one-in-a-million search result withina second. With our cloud-powered differentiating technology, we believe Sonian is ina unique position to maintain a leadership position in cloud-based informationarchiving and analytics.Sonian ‘s next generation software and business model are based on cloud computeeconomics, security, and reliability. With over 8,000 customers across diverseindustries and embedded into offerings from other cloud innovators – Sonian is thefuture of Archive and Search in the Cloud.© 2012 Osterman Research, Inc. All rights reserved.No part of this document may be reproduced in any form by any means, nor may it bedistributed without the permission of Osterman Research, Inc., nor may it be resold ordistributed by any entity other than Osterman Research, Inc., without prior written authorizationof Osterman Research, Inc.Osterman Research, Inc. does not provide legal advice. Nothing in this document constituteslegal advice, nor shall this document or any software product or other offering referenced hereinserve as a substitute for the reader’s compliance with any laws (including but not limited to anyact, statue, regulation, rule, directive, administrative order, executive order, etc. (collectively,“Laws”)) referenced in this document. If necessary, the reader should consult with competentlegal counsel regarding any Laws referenced herein. Osterman Research, Inc. makes norepresentation or warranty regarding the completeness or accuracy of the information containedin this document.THIS DOCUMENT IS PROVIDED “AS IS” WITHOUT WARRANTY OF ANY KIND. ALL EXPRESS ORIMPLIED REPRESENTATIONS, CONDITIONS AND WARRANTIES, INCLUDING ANY IMPLIEDWARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE, AREDISCLAIMED, EXCEPT TO THE EXTENT THAT SUCH DISCLAIMERS ARE DETERMINED TO BEILLEGAL.©2012 Osterman Research, Inc. 7

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