This is a very serious issue complicated by the fact that there is a growing tenancy to require businesses to retain records for longer periods of time. This is often an issue not realized by the business until too late.
My recommendations to a business that faces a 5 year or greater records retention need is to create a “record” - actually an image of the standard operating system loaded with all of the appropriate applications necessary to read any of the file formats for that year. Then, during the annual records archival process, store that image along with the data.
This then creates an image for each year stored on a CD or DVD. But what happens for systems say 10 years down the road when CD players are no longer available? While this does tend to solve the software issues, what do you do about hardware compatibility?
I know one company that buys new PC hardware every 2 years and replaces 1/3 of their companies PCs at that time. What they do is buy an extra system and mothball it right away in their archives room. Brand new PC, sitting there doing nothing .... just for the purpose of having a working system to read old files / software programs.
With the price/gigabyte falling as fast as it has the past few years, why depend on CD? A good SAN with RAIDed drives should keep data safe. As one HDD in the SAN fails, merely replace it. The RAID system will rebuild the new drive without any fuss.
How common is record retention on CD or DVD? I thought many backups were on hard disk and/or tape.
That's not entirely a bad idea. With the advent of easy virtualization, you could just create an image of the entire system as a runnable VM image. VMWare is the best things since sliced bread IMO.
Another thing I'd strongly advise is for both individuals and companies to use document formats that are actually open and fully documented. That would rule out all of the microsoft formats mentioned in the article. Store the full specs for the formats along with the VM images and you should be pretty much good to go for a lot of stuff.
Of course, you also have to deal with media obsolecence as well. Fortunately, we're making large leaps in data storage, so the space the data takes up that you have to store (in triplicate in separate locations btw) gets smaller with each generation. Approximately every 5 years, you should upgrade your entire archive to new media (again in triplicate at multiple locations) to avoid bit rot and entropy from destroying all your hard work.
Keeping up with data is hard, expensive work, and will be for quite some time.