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How Many Bytes Do You Need for Your Data-Storage Buck?

Q: How do I manage the plethora of storage options that are available for my small business?

Suddenly, digital storage isn't so simple. These digital days, businesses have almost too many places to put their gigabytes of files, contacts, presentations and other virtual assets.

There are cloud-based storage tools that put data on internet-connected services like Apple's iCloud, Google Apps and Microsoft SkyDrive. There is a full range of low-cost, on-premise hard drives and backup options. Cheap USB drives now show up on keychains. Heck, even mobile devices like iPhones, Droids and BlackBerrys offer serious file-storage capacity.

To get the inside scoop on the best way to manage this new portfolio of storage options, we sat down with a serious storage geek: Tom Coughlin, president of Coughlin Associates, which provides consulting and strategic advice to firms hoping to prosper in the digital storage game. His work is respected by executives at such storage giants as Toshiba, Iomega, Hitachi and many others. Coughlin spoke with us over the phone from his office in San Jose, Calif. We covered the gamut of storage issues.

How much: About half a terabyte--or roughly 500 GB--should be more than enough for most firms, if most of your files are simple Word and Excel documents, Coughlin says. If you have more complex assets (say you are editing corporate footage or complex presentations), many terabytes of storage could be needed. But for average use, what comes readily available on most work computers is enough.

Web-based options: Don't fall in love with the internet, Coughlin warns. Compared to the cost for subscriptions to cloud-sharing services, storing data on hard drives in your office can get the job done for pennies on the dollar. "You have to decide what you put on the web and what you store locally," he says. "Ultimately, local storage is going to be cheaper."

Reliability: No matter what you do, make sure there is a second copy of critical data elsewhere. Access to the web is still remarkably unstable, particularly when traveling, Coughlin says, so data will still need to be stored close at hand. And you should have a second local storage option that backs up your main local storage for important photos and documents. It may take a while, but hard drives eventually fail.

The personal cloud: Considering that most users are looking at some sort of mix of storage options, a smart trick is to build a local "personal cloud" using the wireless capabilities of your business networks in a new generation of hard drives. Readily available Wi-Fi networks easily can be connected to properly enabled drives, which can without much fuss back up files with little manual assistance. Better yet, if you make that background storage option a rugged hard drive that can survive a fire, you have an additional level of disaster recovery built in.

But the facts remain that in this complex digital age, there are no easy storage answers. "I don't see any universal solution," Coughlin says. "One needs to put together a plan."

This story appears in the December 2011 issue of Entrepreneur. Subscribe »

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