DSC Bullish On IBM i Cloud Growth
January 31, 2022 Alex Woodie
You may know Data Storage Corporation as the company that provides hosted high availability and disaster recovery services. But the New York company has moved beyond its roots in data storage with its fast-growing cloud hosting business, where it runs hundreds of IBM i environments on behalf of its customers. With the great cloud migration just starting for Power customers, there’s a considerable upside for companies like DSC.
Data Storage Corporation was one of the first IBM business partners to get into the cloud business. It started building its IBM i cloud in earnest in late 2012, and launched it in early 2013. The operation grew steadily until the past couple of years, when it roughly quadrupled in size, according to Hal Schartz, the president of the company, which is based in the Long Island city of Melville.
“In 2019, our average pipeline was $4 million of potential opportunities in contract value,” Schwartz tells IT Jungle. “Today its $16 million. That’s a direct result of more interest.”
While it also hosts AIX and Linux on Power, over 50 percent of DSC’s business is directly related to the IBM i platform. “We provide mostly IBM i,” says Chuck Paolillo, DSC’s chief technology officer. “It’s our specialty.”
DSC’s runs about 400 LPARs on behalf of about 200 IBM i customers, Schwartz says. That doesn’t include another 450 backup and recovery customers, in which it provides cold backup services they can tap into in case of an emergency.
The company runs IBM Power systems in eight leased data centers around the world. That includes four primary data centers owned by TierPoint located in New York, Massachusetts, North Carolina, and Texas. It also has assets in data centers owned by Webair in New York, California, and France. Finally, DSC also has gear in two data centers owned by Able-One, the biggest IBM i reseller in Canada.
The infrastructure as a service (IaaS) business is booming as companies look to get out of the business of managing their own servers. Like other managed service providers (MSPs), DSC takes responsibility for the care and feeding of Power hardware and the IBM i operating system, leaving the management of the applications and the database to its clients.
“We have a few different levels of support packages that we offer,” Paolillo says. “We do have some clients where they just want to get out of the hardware business and not deal with the system, but they still want to manage everything on their own.” Hosting clients typically get QSECOFR access, he says, and the client and DSC manage the environment together.
In addition to applying patches to the operating system and the firmware, and managing the high availability or disaster recovery environment on behalf of clients, DSC also takes an active role in managing security. DSC is working with its partner Precisely to make that vendor’s full suite of IBM i security software available for its hosting clients. Considering the (very real) security concerns of IBM i shops and the world at large, that has the potential to be a fruitful collaboration.
DSC takes security very seriously, Schwartz says. “The biggest difference between us and most [MSPs], even big companies, is we routinely and systematically do security patching to all the devices throughout the network,” he says. “That’s where companies fall down. They just do not patch their firewalls and switches and stuff with security updates–or their IBM i systems. But we have a whole workflow for that.”
Another differentiator for DSC is its all Flash SAN. While other MSPs still run Power servers with internal storage, DSC made the decision long ago to move to virtualized storage. In the past, it ran XIV and FlashSystem A9000 environments, but today, its FS 7200 series SAN devices connected via Fibre Channel adapters. That not only simplifies the storage administration for DSC, it also makes hardware upgrades a breeze.
“We moved over to the FS systems because they have most of the functionality and they’re lighting fast,” Schwartz says. “By disconnecting the system from the Fiber adapters, we can migrate a person from a Power9 to a Power10 in minutes, because the storage is all on the SAN. We just move the Fiber adapter from one system to the other and they’re up and running. That’s how easy we can upgrade clients.”
2021 was a big year for DSC. In addition to completing the partnership agreement with Able-One, which opened up the IBM i landscape in the Great White North, DSC also completed its merger with Flagship Solutions, LLC, another MSP and IBM business partner. As a result of that deal and organic growth, the company doubled its headcount from 29 to 60 employees.
DSC also became a publicly traded company in 2021, with its stock trading on the Nasdaq Capital Market under ticker symbol DTST. “We are, to the best of our knowledge, still the only publicly traded IBM i cloud provider — besides IBM, obviously,” Schwartz says.
“2021 was a monumental year for Data Storage Corporation that has laid the foundation for meaningful growth for years to come, both operationally and financially,” DSC’s CEO Chuck Piluso stated in a press release.
The future looks bright for moving workloads to the cloud. Out of 1 million or so virtual Power servers in the wild. Only 15 percent have stated the migration to the cloud, he says. “We believe this represents a multi-billion dollar global addressable market and we are ideally positioned to capitalize on this trend,” he states.