The rapid expansion of the digital universe – defined as information that is either created, captured or replicated in digital form – poses a tremendous challenge to corporate IT departments and a tremendous opportunity to service providers, according to researchers at IDC.

In its second annual study , “The Diverse and Exploding Digital Universe,” sponsored by EMC, IDC pegs the digital universe at 281 exabytes (or 281 billion gigabytes) in size-- about 10% larger than the research firm predicted in its year-earlier report. By 2011, the digital universe should equal 1800 exabytes, which is 10 times larger than its size in 2006.

A major reason for that exponential growth is that the number of devices creating digital bits is also rapidly growing, said John Gantz, senior program manager at IDC and project director of the digital universe study. High-resolution digital cameras, surveillance cameras and digital TVs all grew faster than expected in 2007, but they joined a host of devices that include RFID tags, sensors, and even VoIP packets that amount to 99% of the information “containers” IDC counted but generate less than 6% of the traffic.

The opportunity for service providers is helping their customers, particularly business IT managers and businesses in general, with managing the devices as well as the vast quantity of data that they generate – a quantity which, for the first time, exceeds the available storage.

“A lot of the digital information doesn’t need to be stored – voice packets, for example,” Gantz said. “But the point is, we couldn’t store it all if we tried to, even though storage is also expanding rapidly and getting cheaper. So there has to be decisions made about how to manage all this data, what to store and where to store it, as well as how to manage it and keep it secure. And someone has to keep track of all the digital containers.”

That’s where managed services will be most valuable, Gantz said, and where service providers can best capitalize on the digital expansion trend. The number of electronic information containers is growing 50% faster than the number of digital gigabytes, IDC discovered. All of these devices have a purpose, but the idea is to enable them to serve that purpose in the most efficient way, Gantz said, without unnecessarily burdening data centers and corporate LANs and WANs, or creating corporate security risks.

“Businesses are going to be challenged in many ways, and they will look to service providers to help them with this,” Gantz said.

But corporations must also do some internal work, to recognize that dealing with the flood of information creation, storage, management and security issues is not just an IT problem but a challenge for every business unit, Gantz said. Corporations will need “policies for information governance, information security, information retention, data access and compliance,” the IDC report concludes.