Object Storage: A Growing Opportunity for Service Providers

©2012 Neovise, LLC. All Rights Reserved.
Object Storage:
A Growing Opportunity
for Service Providers
Prepared for:
White Paper

©2012 Neovise, LLC. All Rights Reserved. Page 1
Introduction
For service providers, the rise of cloud computing is both a threat and an opportunity. Shared and
dedicated hosting services are all under attack by a variety of emerging cloud services that
provide hourly pricing and automation through APIs. An emerging class of competitors, led by
Amazon Web Services (AWS), is not just building a new market but siphoning spending from
established providers. Those who don’t respond quickly face the possibility of declining
revenues or even obsolescence.
The good news is that cloud services also represent a large opportunity for serving new
customers and increasing revenue. However, in order to compete, existing service providers must
move quickly to deliver cloud services of their own. The race to offer cloud services is already
well under way. During the first half of 2012, Neovise completed research on 500 of the largest
hosting providers in the world. The study revealed that 229 of them, or 45.8%, already offer
cloud-based infrastructure-as-a-service (IaaS).
While service providers are flocking to IaaS, storage-as-a-service (STaaS) is another huge
segment of the cloud computing market that should not be overlooked. The demand for STaaS is
increasing exponentially, driven by trends like video, mobility, big data, file sharing and cloud
computing itself. In order to serve each of these growing needs, several different types of cloud
storage services are coming online. Object storage is perhaps the most important of these new
storage services since it provides the low cost, persistent, reliable data storage foundation
underlying many STaaS and IaaS offerings.
Object storage not only represents a huge revenue
opportunity, it is one of the fastest growing segments
of the cloud computing market. The most successful
object storage service to date is Amazon Simple
Storage Service (S3). In June 2012, just six years after
its launch, the number of objects stored in S3 reached one trillion (1,000,000,000,000 or 1012
).
While the typical object storage service will not achieve these rates, the never-ending growth in
storage demand provides a viable environment in which to compete.
Block and File Storage
Before getting into the depths of object storage systems and services, it is helpful to consider two
other popular – and still useful – types of storage system.
“Object storage not only represents
a huge revenue opportunity, it is one
of the fastest growing segments of
the cloud computing market.”

Block storage. Block storage devices provide fixed-size chunks of raw storage capacity. At this
level, data is stored without any concept of data format or type. The data is simply a series of 0s
and 1s and it is up to higher-level applications and/or file systems to keep track of data location,
context and meaning. The storage area network (SAN) is a commonly used example of a block-
based storage system. They are dedicated networks that provide access to consolidated, block-
level data storage devices such as disk arrays. SANs use the iSCSI standard to send and receive
data over IP networks and give applications and file systems the illusion of locally attached
disks.
File storage. Network attached storage (NAS) is a common example of a file-based storage
system. NAS devices use file systems built on top of block storage devices. File systems serve
two key purposes: they establish the notion of a file and they provide a structure for organizing
files.
1. Files are data structures that typically live within operating systems and keep track of a
related set of blocks that contain the contents of the file. Files also have associated
information known as metadata that describes the file. File name, length, type and
creation date are all examples of metadata.
2. File organization is also accomplished using data structures that are typically part of
operating systems. File systems offer directories (also called folders on some systems)
that are used to store related files and/or additional directories. Directories are organized
using a hierarchical naming convention starting with a root or starting point. Within a
given file system, every directory is uniquely identified using its full path name starting
from the root directory. Files are uniquely identified by the full path name of the
directory where they are stored, followed by their name.
Understanding Object Storage
Many new technologies are easily compared to their predecessors, requiring just a small intuitive
leap to understand them. On the other hand, some new technologies bare only a slight
resemblance to past approaches. Object storage fits in this latter
category and introduces a completely new way of looking at
storage. Rather than describing how object storage is similar to
block or file-based storage, it is better to describe how object
storage is different.
“Object storage introduces
a completely new way of
looking at storage.”

While object storage systems may contain files and other types of data, they are not actually file
systems and do not establish the notion of files. Just as the name implies, object storage systems
contain objects. These objects consist of an object identifier (OID), data and metadata. There is
no object organization system equivalent to the hierarchical directories found in file systems. The
object storage system does not impose any structure on objects as file systems do for different
file types. Even when object storage systems contain files, the object system simply views them
as data. Unlike file systems, the metadata for individual objects can be quite extensive.
Why Object Storage is Better
At first glance, object storage may seem to have a number of shortcomings. However, these
systems have instead eliminated the capabilities that create performance bottlenecks and
scalability limitations in file systems. For example, many operations on individual files require
the file system to traverse every directory in the file’s path name, starting with the root directory.
These data structures are shared by the entire file system and access to them can slow
dramatically when hundreds of thousands or even millions of files are stored. Accessing
metadata that is stored in the file system but outside individual files also serves as a barrier to
scale and performance.
Object storage works much differently than file systems, in part by providing direct access to
individual objects. All that is needed to access an object is an OID. Since all metadata for each
object is stored within the object itself, there is no contention for shared resources such as those
found in file systems (e.g. shared namespace, certain metadata and other file system data
structures). This approach allows operations
performed on objects to happen independently of
operations on other objects. The result is nearly
unlimited scale along with linear performance.
Of course object storage is not the best approach for every storage application. Databases, file
systems and applications that require the lowest latencies tend to work best with block level
storage systems such as SANs. On the other hand, when chosen for the right usage scenario,
object storage systems are hard to beat. Static data such as virtual machine images, videos,
photos, email, backups and archives are particularly well suite for object storage.
“The result is nearly unlimited scale
along with linear performance.”

Object Storage Requirements
Service providers interested in offering object-based STaaS must address two related sets of
requirements: First, they must meet their own business requirements. Second, they must meet the
technical requirements of their customers.
Business Requirements
Before discussing business requirements, it is important to note that service providers may either
build or buy object storage systems. Building – including extending an open source solution –
has a number of inherent challenges including the need for deep expertise in software
development, distributed systems architecture and design, object storage, security and more.
Then, once the object storage service is operational, additional resources will still be needed for
ongoing support and enhancements. Advantages provided by commercial solutions may include
faster time to market and revenue, a company to stand behind the product and provide support,
and extended capabilities such as integration with billing and payment systems.
Several of the top business requirements for a commercial object storage system are summarized
here:
• Speed – The race is on to get to market with complete cloud solutions, including object
storage. Service providers need complete solutions that support rapid time-to-market.
• Scale – While economies of scale provide an important advantage, many service
providers need a solution that scales down, letting them start small and grow quickly.
• Revenue – In order to target the broadest set of potential customers, an object storage
solution must meet the requirements of a variety of workloads.
• Cost – Object storage services are price competitive and service providers need
affordable solutions that work on commodity hardware yet deliver high reliability.
• Differentiation – Service providers need an object storage solution that supports multiple
architectures and that can be tuned across variables such as cost and performance.
As suggested by several of the business requirements, it is also critical to deliver an object
storage service that meets the technical requirements of customers.
Technical Requirements
The items listed below represent some of the most important requirements categories for success
with persistent, multi-tenant object storage services. Any purchase decision should consider

these and other in-depth technical requirements, as well as hands-on validation through proof of
concept projects and/or limited trials.
• Reliability – Resiliency to underlying hardware and network failures in availability
zones, data centers and regions or other similar failure-containment constructs.
• Security – Isolation of data from other tenants, access control lists for users and groups,
read/write access control, encryption and strong authentication.
• Scale – Huge numbers of objects are stored in object storage services so they must scale
to billions of objects or more, while supporting large object sizes.
• Performance – Fast reads and writes while handling a broad range of transaction rates
and traffic conditions and while serving tenants in availability zones in every region.
• Control – Control over service level agreements (SLA) so that performance, reliability
and costs tradeoffs can be made. Customer control over data location.
There is an additional requirement to consider relative to an existing object storage service,
Amazon Simple Storage Service (S3).
Amazon S3 Compatibility
S3 is the object storage service for AWS, providing its customers a highly durable storage
infrastructure for a wide variety of applications. S3 objects come from a variety of sources
including Amazon Elastic Compute Cloud (EC2) customers seeking persistent storage and
partners that have built services on top of S3. Due to the overall success of S3, it serves as an
industry benchmark for multi-tenant object storage services. Those wishing to compete in the
IaaS space in general or the object storage space in
particular should seriously consider building an object
storage service compatible with the S3 API. By
providing this level of S3 compatibility, service
providers move one step closer to tapping into the
ecosystem of solutions that run on S3.
S3 Compatible Object Storage from Cloudian
Cloudian is a turnkey platform for building and delivering S3-compatible object storage services
that meet the business and technical requirements described earlier. Designed as a complete
solution rather than a do-it-yourself project, Cloudian includes capabilities such as multiple
billing and subscription revenue models, usage-based metering, integration with popular billing
and payment systems, and a web-based management console. Since time-to-market and time-to-
“Those wishing to compete in the
IaaS space in general or the object
storage space in particular should
seriously consider building an S3-
compatible object storage service.”

revenue are so critical to service providers, Cloudian was also designed for deployment from
start to finish in just a few months.
Service providers are following several different approaches to adding object storage services to
their offerings. Some start by offering integrated compute and object storage services. Others
start with standalone object storage and either add compute services later, or remain a cloud
storage specialist. Regardless of which path is chosen, the majority of service providers like to
start small – with perhaps a 10TB system – and then grow large quickly. Cloudian supports this
model by scaling from a minimum of two nodes up to hundreds of nodes with petabytes of data
across multiple data centers. The company also offers the Cloudian Community Edition for free
in deployments up to 10TB. This is an excellent way for service providers as well as enterprises
to get accustomed to object storage.
Another important aspect of scaling is affordability, which
also impacts profit margins. Cloudian enables service
providers to leverage heterogeneous commodity servers for
cost-effective horizontal scalability. Since heterogeneous
systems are supported, new systems can be mixed with old
when it is time for growth. New node detection and data re-
balancing is performed automatically without service interruption.
For reliability, Cloudian is built on top of a NoSQL storage layer and has a fully distributed,
peer-to-peer architecture, with no single point of failure. It is resilient to network and node
failures with no data loss due to the automatic replication and recovery processes inherent to the
architecture. The system can be deployed across multiple sites and datacenters to provide
geographic redundancy. Upgrades and updates can be performed without service interruption.
Conclusions
There is a clear opportunity for service providers to increase revenue and growth rates through
object-based STaaS. However, in order to be successful, service providers must provide the right
set of capabilities to meet the needs of their customers. By providing object storage services that
are API-compatible with S3, service providers position themselves to deliver what their
customers really want.
Success with object storage also requires consideration of at least two related sets of
requirements: business requirements for the service provider and technical requirements for their
“Cloudian enables service
providers to leverage
heterogeneous commodity
servers for cost-effective
horizontal scalability.”

customers. Business requirements include speed to market, the ability to start small and grow
large quickly, revenue and addressable market through offering services with broad appeal,
affordability through support of commodity hardware, and differentiation by supporting flexible
architectures and other configurable choices. Technical requirements include extremely high
reliability and security, massive scale for individual tenants and across the entire service, solid
performance in a variety of usage conditions, and control by supporting flexible choices and
tradeoffs between SLA variables such as performance, reliability and cost.
Very few service providers have the resources and skills to build their own object storage
service. While open source offerings are a step in the right direction, they still require deep
expertise in a variety of technical domains. Even after deployment they consume valuable
resources for ongoing support and enhancements. Advantages provided by commercial solutions
may include faster time to market and revenue, a company to stand behind the product and
provide support, and extended capabilities such as integration with billing and payment systems.
Cloudian helps service providers quickly and
affordably build highly reliable, massively scalable
object storage services that are API-compatible with
Amazon S3. Neovise recommends serious
consideration of Cloudian as the basis for large-scale,
object-based storage services, particularly for those
seeking S3 compatibility. To determine whether Cloudian is right for you, consider doing a proof
of concept or in-depth trial. Also keep in mind that the Cloudian Community Edition is license
free up to 10TBs – a great way to get started with object storage.
“Cloudian helps service providers
quickly and affordably build highly
reliable, massively scalable object
storage services that are API-
compatible with Amazon S3.”

©2012 Neovise, LLC. All Rights Reserved.
About Neovise
Based on independent research and analysis, Neovise delivers essential knowledge and guidance to cloud-related technology
vendors, service providers and systems integrators, as well as business and IT organizations that purchase and use cloud-related
services and technology. Our offerings include research, advisory and collateral development services that help our customers—
and their customers—make optimal decisions and formulate winning strategies. Research. Analyze. Neovise.
For more information, visit www.neovise.com.

Object Storage: A Growing Opportunity for Service Providers

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Object Storage: A Growing Opportunity for Service Providers