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Competition in cloud storage market heats up

Despite the prominence of large cloud providers like Microsoft, many companies are competing in the cloud storage market.

A number of factors are converging to affect cloud computing. In recent months, the cloud storage market witnessed a price war between Microsoft, Google and Amazon in an ever-growing push for greater value at lower cost. In addition, there has been a demand for highly interoperable platforms and a greater focus on additional value in the services that accompany storage offerings.

Fortunately, the market is ripe for innovative cloud storage companies to enter and make a notable impact, according to Network World's Brandon Butler. He suggested that cloud buyers are increasingly paying attention to the fine print in service-level agreements, as well as going through a more stringent vetting process. Although providers now have to go through a more rigorous set of checks and balances to ensure they can meet demand while satisfying security and compliance needs, Butler noted that companies of all sizes are entering into the competitive landscape.

"The vendor landscape in the cloud storage market is budding," Butler wrote. "Big-name traditional storage vendors – Microsoft and IBM – are competing with up and coming all-cloud companies like Amazon Web Services and Nirvanix, while other companies are migrating from managed hosting into a set of cloud storage offerings."

In addition to traditional sources of trepidation, cost has become more of a focal point of technology conversations than it has been in years past. Cloud storage has emerged as an important part of many optimization strategies due to the increasing complexity of managing in-house data centers. Highlighting comments from research firm Gartner, Butler noted that companies are likely to be on the lookout for hidden costs. For this reason, cloud storage companies are likely to benefit from transparency and in working with customers to calculate the true total cost of ownership of their cloud deployments. This includes considerations in regard to per-gigabyte rates as well as bandwidth demand, data access costs and support services.

Key trends: Optimization, mobile
The storage ecosystem as a whole has faced increasing complexity due to the number of different options and the proliferation of hybrid models. This may be a contributor to growing demand for services that help companies navigate their storage environments. As Gartner's recent IT spending forecast outlined, storage management applications represent a key contributor to the software market's expected 6.4 percent growth between 2012 and 2013. Analysts also predicted growing interest in information governance software as 2014 approaches.

The silver lining to the growing complexity is that the trepidation expressed by many businesses and technology professionals is dissipating, leading to healthier budgets and renewed IT spending.

"Uncertainties surrounding prospects for an upturn in global economic growth are the major retardants to IT growth," said Richard Gordon, managing vice president at Gartner. "This uncertainty has caused the pessimistic business and consumer sentiment throughout the world. However, much of this uncertainty is nearing resolution, and as it does, we look for accelerated spending growth in 2013 compared to 2012."

The mobile market is likely to be a key area of interest for software and cloud storage providers. As Gartner noted, growth in the overall device market is expected to be driven primarily by smartphones. Analysts attributed lower overall growth projections to decreases in tablet and PC purchasing.