Storage VAR: Shape Up Or Ship Out
Banks need to store massive amounts of data, and the banking industry has become one of the best ports of call for the large jukebox market. Integrator Digital Storage Solutions, Inc. says both 12-inch and 5.25-inch WORM (write once read many) libraries work well for the mass storage needs of financial institutions.
If you've ever been one of the unfortunate individuals accused of not paying a bill, you know why it's important for a bank to store images of your checks. Most of us don't receive a bulging envelope of cancelled checks wrapped in our statement every month anymore. We expect our bank to provide us with a copy of the front and back of our check as proof of payment if we need it. A copy of a check can keep you from receiving menacing collection calls from the company that financed your recent luxury boat acquisition. It can keep you from being sued in small claims court over the last installment on your new ceramic-tiled bathroom. It can even call off the IRS if it's hounding you because it can't find that quarterly tax payment you sent in six months ago.
Your bank is not just being nice when it sends you that thin, gray copy of the front and back of your check. Moreover, when the bank looks for a way to store checks and other documents, ROI (return on investment) is not its biggest concern, according to Tom Olivieri, director of operations for Digital Storage (Brentwood, NY). It's reliable data archiving that's most important because of SEC requirements. The potential consequences for non-compliance outweigh any considerations of ROI or aversion toward unhappy customers on the telephone. Banks need to store massive amounts of data. Integrators like Digital Storage Solutions assure their customers that the data will be there, where they need it, for many years.
The founders of Digital Storage Solutions understand the banking industry's needs for good reason (See Business Systems, August, 1997). In 1993, Long Island Savings Bank downsized Olivieri and Paul Greene, now director of technical services for Digital Storage Solutions. "I had worked in network engineering at the bank," said Greene. "Tom was a systems analyst in the information systems group. When we found out that the bank was downsizing, we came up with a plan to start our own company."
After six years in business, Greene and Olivieri took on a third partner, Tom Doyle, who is director of sales and marketing. Doyle originally owned and operated a small document conversion service bureau. The decision to form a three-way partnership gives the company strength in the sales, technical, and operational areas. These days, Digital Storage Solutions counts The Chase Manhattan Bank, Merck Pharmaceuticals, and the New York Mets as its prominent customers.
Large Jukeboxes Can Compete Against Higher-Capacity, Lower-Cost Hard Drives
"Information is growing every day," Olivieri commented. "It needs to be stored reliably and retrieved easily. Small- and medium-capacity jukebox sales are falling, but large-capacity jukebox sales are on the rise." Financial institutions, like Chase Manhattan, buy 258-slot and 500-slot jukeboxes from Digital Storage Solutions. "Our customers just aren't buying 20- to 32-slot jukeboxes like they used to," said Greene.
The increase in capacity and decrease in cost of hard disk drives has had a negative impact on small jukebox sales. Greene offered some concrete examples to illustrate his point. "A 5.25-inch, 20-slot jukebox offers about 105 GB in capacity. It costs around $7,000. Add necessities like media, jukebox management software, a maintenance contract, and on-site service, and you're up to about $12,000 for an entry-level jukebox. For only $5,000, you can get 100 GB of storage in a RAID (redundant array of independent disks) system. With RAID, there is very little installation time, practically no maintenance, and no training. You just connect it to your server, turn it on, run a configuration utility, and re-boot." The downside of RAID, however, is the inability to store unalterable computer files. Any file can be modified at any time.
When you get into the 258-slot and larger sizes, optical jukeboxes become more cost-effective than RAID. However, smaller jukeboxes are still very common in shops where permanent records need to be stored and retrieved. On optical, the data is permanent. Financial institutions scan large amounts of documents and need to keep images on unalterable WORM media.
The trend in the jukebox industry is toward larger units and higher capacity. "Every two years, drive capacity doubles," said Greene. "Since I've been in the industry, I've seen it go from 1.3 GB to 5.2 GB. At the end of this year, capacity should reach 9.1 GB."
One of the biggest challenges in providing optical storage solutions is trying to figure out which jukebox management software to use, according to Doyle. "The type of software we recommend to our customers depends on what the customer is using the jukebox for," Doyle said. "The overall systems we design are tuned to our customers' business needs and style of operations."
Imaging VAR Dove Headfirst Into Mass Storage
Digital Storage Solutions didn't always focus on storage. When the company was founded in 1993, Greene and Olivieri installed Novell and Microsoft Windows networks. Then, in 1995, they started to explore the document imaging arena. This led to mass storage solutions and using vendors like Plasmon (Eden Prairie, MN) for the education process. "I went to Plasmon's factory for two-day training," said Greene. "We went into great detail on the construction and architecture of jukeboxes. We went through some exercises, taking apart and putting together jukeboxes. They taught us to swap out drives and some of the mechanical components inside."
Providing mass storage solutions soon consumed the operations of Digital Storage Solutions. "Back then we were too small to do both imaging and storage," said Greene. "So, we took a step back from imaging and only focused on the storage part of it."
Integrator Combines Imaging And Mass Storage With A New Venture
As mass storage helped the company grow in both revenue and employees, Digital Storage Solutions re-entered the imaging market. Now the company has 15 employees and the resources to offer sales, support, installation, and training. "We can offer the whole solution instead of just mass storage," added Greene.
Digital Storage Solutions' newest venture is a service bureau called Paper Freedom. The goal for the new venture is to provide document and data conversion services to its increasingly varied customer base. Paper Freedom offers conversion services including black-and-white and color document scanning, microfilm/microfiche to CD, and AS/400 and other mainframe spool files to CD (COLD). Its services also include full-text OCR (optical character recognition), Adobe PDF (portable document format) files, and high-volume CD-ROM duplication. Its new Web site, www.paperfreedom.com, is dedicated to conversion services and offers visitors a step-by-step overview of the document conversion process.
A Time And Place For Jukebox And RAID
For its service bureau, Digital Storage Solutions employs a 100 GB RAID system as its primary storage device. "As jobs go out the door, we migrate them to an optical jukebox for a period of up to six months," said Greene. "This combination of storage media offers us fast access to our current conversion jobs. It still proves nearline access to jobs already delivered to our customers. Since we don't have to retain permanent records of the scanned images, we use rewriteable media, not WORM," said Greene.
Obviously, based on this example, Digital Storage Solutions knows when optical jukeboxes are a good solution for its customers. A company that only needs to store its data for a day or a week might not be the best candidate for a jukebox solution. But, when capacity and media shelf life are more important than performance, the large jukebox rules. In fact, according to IDC, the high-end jukebox dominates the unit outlook until at least the year 2004. However, jukebox manufacturers must provide timely availability on this hardware. Then, integrators like Digital Storage Solutions will be able to help the banking and other markets store large amounts of data for a very long time.
Questions about this article? E-mail the author at AnnD@corrypub.com.