Storage Service Provider - The Network is the Computer

Since the last post, I spent a lot of time thinking about what am I going to do after this CNY. First, NorthPole as a company is starting to get into shape. I'm working as the chief architect of the whole thing. Fortunately, I had the time off to Koh Samed (not Koh Samui). Koh Samui has its place on the world map. However, Koh Samed is only limited to few who has been around in Thailand. You can view pictures from Koh Samed here, here, here, and here. (Pardon Thai language in the post, but you'd get the picture)

Network is a technical aspect of your Service Provider. It's the core competency for every SSP. Since having storage alone does not bring home the service. You need a really large network in order to provide sustainable Storage service.

Let's start from the client towards SSPs. We can easily divide two groups: consumer and corporate clients.
1. Consumer clients (or SMBs) are typical clients that will only utilize the storage at SSP via the Internet.
2. Corporate (enterprise) clients are companies that would require managed storage service through dedicated network links.

The divider between these two groups are based on monthly recurring charge (MRC). Consumer clients usually subscribe less than 10GB and pay not more than 100 USD per month. (Xdrive.com offers storage rental for 10 USD per 1GB per month, webhard is another notable company in this category) Whereas Corporate clients are currently subscribing at least 50GB and willing to pay much higher than 1000 USD per month. If you prepare the serve any of these two groups, you need to design your network infrastructure accordingly.

In case 1 (consumer), you don't need to provide network access (usually broadband internet) to these clients. You only subscribe enough bandwidth to serve your clients' access pattern. In telco term, typically you need to think about BHCA (busy hour call average - in telephone company term) or concurrent sessions. Consumer client with 1GB subscription should update information approx 1% daily or 10MB. However, there is a connection burst for these clients when they first joined. So preparing enough bandwidth for concurrent sessions for existing clients and burstable network for new clients are the key.

For example, to provide consumer storage service to 10,000 people, you need to prepare 10TB of usable space (1GB subscription for 10,000 people). Required network is approx 10,000x10MB = 100GB transfer over 12 hours (daytime or working hours). If we use uniform distribution, average transfer is 8.533 GB/hour or 2.37 MB/second or 18.96 Megabit/second.

So you'll need at least 18.96 Mbps network link. However, if your consumer clients' access pattern is not uniform over 12-hour period. If every clients would like to log-on from 6PM-12AM, you'll need 18.96x2 = 37.92 Mbps network link. You should subscribe network bandwidth between these two numbers.

Let's see how much money are you going to make per month. 10,000 paying clients for average 1GB each, that equals 10,000 * 10 USD/month = 100,000 USD/month revenue. Buying Wintel servers (with or without clustering software) + 10TB iSCSI storage should be well within 200,000 USD. Your hosting charge could be well within 5,000 USD/month (inclusive of 45Mbps link). Your ROI is going to be less than 9 months (if you can not get 10,000 clients to sign up within the first month.)

We'll talk about Case 2: Enterprise clients when i'm back.