Online Backup Services Catch On -

Online Backup Services Catch On

To read the industry news is to be reminded, almost daily, that backup tapes occasionally get lost on their way to offsite storage. And against a backdrop of growing concern over identity theft and protection of consumer privacy, those losses carry ever more dire consequences.

One solution to the problem is to encrypt tapes, at the cost of more backup and restore complexity. A second solution is to forego the transport of tapes altogether and to send encrypted backups over the network directly to an offsite location. Online backup services offered by companies such as EVault, Arsenal Digital Solutions and a number of others do just that, and they are obviously attractive to smaller businesses that may lack the in-house storage expertise required to automate and monitor backups, let alone handle backups of sensitive information.

Will lost tapes reported recently by the likes of Iron Mountain, Ameritrade, Bank of America and Time Warner drive larger organizations in the direction of online backup services too? Doug Chandler, program director at IDC, doesn't think so.

"I don't see customers moving in droves to a different model because of that," says Chandler.

Instead, he points to a second path that leads enterprise customers to turn, in a more limited way, to online storage providers. "There are two value propositions," he says. "One is we can take the trucks out of the picture and do it for less. The other is, instead of trying to replace something that you are already doing, we can get that branch office backed up. And you haven't been able to do that."

SMBs, Branch Offices Have An Answer

Getting that branch office backed up is an elusive goal for many larger corporations. In backup, enterprises often face in remote offices the same problem that small businesses face — in a word, lack of experienced storage management staff.

Tony Barbagallo, senior vice president of marketing at EVault, says data protection efforts at remote locations are often "haphazard at best." And, he says, branch office data can be as or more sensitive than data stored at the primary data center. "A lot of customer data is actually stored at the branch offices, so you need to have some level of expertise," he says.

Frank Brick, chairman and CEO of Arsenal, says that half of his company's active prospect base are large businesses, and that backup of branch offices is their number one concern. They cite the "relative unreliability of low-end backup solutions for their remote locations" in seeking to outsource backup tasks for these offices.

SMBs remain a large part of the customer base for online backup service providers. Barbagallo says EVault has the most traction among customers of around 20-500 employees, backing up 200-300 GB compressed over the network, or, at the "higher end of S and pushing into M."

The key differentiator between companies that successfully back up data in-house and those that choose managed online services is, not surprising, a focus on storage management. "Our best managed-solutions customers are mid-market customers where data protection isn't, and shouldn't be, a core competency," says Barbagallo. "Data protection for those IT staffs has always been a side job."

Smaller customers of Arsenal's are often from regulated industries. "In the SMB sector, we're seeing the greatest interest from small banks, small financial institutions, law firms, and medical practices," says Brick. For these customers, the challenge of dealing with privacy and retention regulations, such as HIPAA, compounds the complexity of server backups and is a big factor in favor of outsourcing.

Page 2: Media, Food Services Firms Take The Plunge

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