Data protection budgets are growing, according to a recent survey by virtual tape library (VTL) and deduplication software vendor Sepaton, offering a promising opportunity for solution providers selling into the lucrative space.

The survey 600 business-technology consumers shows that regulatory pressures are driving much of the emphasis on data protection, but that increasing ROI and driving down infrastructure, management and personnel costs is a major factor.

As data generation continues unchecked, many organizations are looking for ways to increase the security and integrity of their data while using fewer resources to do so. It’s a tough balancing act, says Kevin Hanlon, CEO of solution provider ComSource.

“A lot of clients say, ‘Well, we’ve gotta make cuts somewhere,’ and they seem to be making those cuts in personnel and also by not refreshing servers and other infrastructure,” says Hanlon. He says that clients who’d purchased both Intel-based and Unix AIX servers that would normally be on a three-year refresh cycle are pushing that legacy technology to the limit of its effective operational service, and holding onto it for four or five years to increase ROI and decrease capital expenses.

“But when it comes to the data protection front, that’s an area customers don’t want to skimp on,” Hanlon says.

VTL and deduplication technology holds the key for solution providers who are looking to juggle their customers’ increased data protection needs with cost-cutting measures, says Jay Livens, director of channel marketing for Sepaton.

“Customers are struggling to manage their budgets, but their data growth isn’t slowing down. As data grows, companies have to more effectively use their existing resources,” says Livens. “For solution providers, VTL and deduplication technology is the answer when customers ask, ‘How can I manage and protect more data and spend less money doing it?’”

For many survey participants, replacing outdated and expensive tape-based backup and archive system is a top priority.

While the majority of survey respondents are using physical tape today, fewer than fifty percent expect to be using tape technology a year from now, and most plan to increase their use of disk-to-disk, VTL appliances or VTL gateways in tape’s place.

While tape backup and archive solutions do have their place, the technology is expensive, somewhat unreliable and difficult to manage, says Hanlon.

“By getting rid of thousands of tape cartridges, customers can also get rid of expensive, raised-floor, chilled storage environments required to store tape. That also lets them free up manpower and cut costs for the physical space required to house all those tapes,” Hanlon says.

It’s far more economical now to move data to VTL technology on high-capacity SATA disks, which also have better and faster restore capabilities in the event data is corrupted.

Integrating these new technologies with legacy infrastructure can pose a challenge, as well, says Livens, since the goal is to repurpose as much legacy technology as possible with little impact on an organization’s operations. “Trying to bring in disruptive technology is really not a solution by any means. So bringing in an appliance that appears to the existing legacy technology as tape is the best way to do it,” he says.

Data deduplication offers yet another growth area for solution providers, according the survey. Dedupe ranked as the top technology planned for deployment in the enterprise data center, with more than 90 percent of respondents currently using deduplication or wanting the technology. Of those who do not have deduplication, 55 percent said they are allocating budget towards this technology in 2009.

By removing redundant data, customers can free up more space for archiving and backup, cutting costs further, says Hanlon. Some customers have seen as much as a twentyfold improvement in the amount of data they can store, according to Livens.

“If this technology represented a five-year ROI, nobody would be able to sell this. But if we’re talking really aggressive, then I could see customers getting ROI in maybe six to nine months,” he says.