In this prolonged period of economic stagnation, data storage stands out as a bright spot in the technology sector. The exponential growth in the volume of digital information is resulting in almost unbridled growth in demand for storage capacity. Nor is there any sign of a slowdown anytime in the near future, with some industry estimates that individual storage volumes could continue to grow 90 to 100 percent year over year for the forseeable future. Companies – particularly mid-sized businesses with between 100 and 1000 employees that of late have become more comfortable with third-party hosted options - are looking for cost-effective OpEx-based managed storage solutions that allow them to avoid the upfront capital costs and many of the ongoing maintenance expenses that can make reliable storage expensive.

Enter cloud storage – a flexible, efficient managed service model that takes advantage of a virtualized infrastructure that is inexpensive relative to traditional on-premise or managed options, letting organizations pay for just the capacity they actually need. Cloud storage services also make it possible for businesses to expand storage as needed.

Managed IT service providers of all stripes – from system integrators and hosting providers to carriers and specialized storage vendors -- are racing into the cloud with new cloud storage services. Seeing the current demand and the future revenue potential, venture capital firms are pouring investment dollars into the segment. The result is a crowded and complicated market with a host of newcomers like Cloud Leverage jockeying for position against much longer-established rivals.

This advisory assesses the current landscape, with a particular focus on companies supplying cloud storage solutions to mid-tier companies. This report addresses the interconnected ecosystem of technology providers, paying particular attention to the role channel partners play and how innovative business models are changing what is still very much an evolving sector.

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