Remote Backup Service Providers: Clarifying the Value Proposition

Apr 14


Tommy Gardner

Tommy Gardner

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Introduction Online Backup of computer data is finally gaining mainstream acceptance among business and consumer clients. Due primarily to the pervasive nature of the internet and the widespread availability of broadband connectivity, online data backup is finally coming into its own.


With this change from a technology once considered the domain of only the largest well-funded businesses to a high-profile,Remote Backup Service Providers:  Clarifying the Value Proposition Articles high-reliability service offering come many challenges for the consumer. An historical look at the data backup and management marketplace and the technologies that helped shape it helps to make some sense of the current trends in this business.
In an effort to make use of their idle server farms, wholesale online ‘Data-Mart’ companies have begun advertising remote backup services at ultra low prices, attempting to capitalize on the new-found popularity of the service. Data Storage and Online Data Repository companies are also on every virtual corner, hawking wildly varied products that initially confuse even industry veterans. Many of these companies are actually in the advertising sales business, and feature data backup as a sort of loss leader, hoping to attract visitors – and thereby advertisers, to their sites.

The value of computer data is higher today than ever before, yet many online remote backup companies seem convinced that businesses are interested in a ‘lowest common denominator’ backup solution. Corners are being cut, misinformation rules, and marketing dollars are flying. In a forest-and-trees analogy, price wars are blinding corporate America to the critical data management component they began looking for in the first place – service. Following is an exploration of the commercial computer data backup and storage market, historically and currently, within the context of the diverse service levels provided by different types of companies.

A brief History of the Remote Data Backup and Offsite Data Storage Universe
In the olden days - that is the mid 1980’s - there simply wasn’t any commercially available Online Backup software. The small handfuls of people providing the service were using a mix-and-match combination of communications, shareware, and other utilities not designed for remote data backup. In fact, there were no standard protocols at all for electronic communications or graphic user interface to computer programs. The microcomputer industry was in a great state of change and modems were still stalled at 1200 to 2400 baud, making transfers of large amounts of data excruciatingly slow (1 mb = 72 minutes!!). As technologies improved, so did the possibilities and prospects for the online data backup and management industry.
As connectivity speeds increased, the market for Online Backup services expanded...

During the time that faster modems and internet protocols were in development, tape backup systems gained in popularity. The mainstay of larger corporations since the 1950’s, tape backup saw significant improvements with the advent of the 8mm and 4mm tape formats, achieving then-revolutionary local transfer speeds of 240 KB per second. Cottage industries sprung up as the technology began to transform existing paper record storage businesses into larger tape transport and storage enterprises. Because of the ongoing costs associated with moving these tapes around and the relatively high failure rates of restoring data from tapes, companies began to research and develop ways to transfer data over telephone lines. Software costs were as high as $125,000 for the first reliable product, and high-speed modems were still relatively scarce. The need for an affordable, reliable online backup system was becoming clear.
In 1987 Remote Backup Systems, Inc.’s founder introduced the first commercially available online backup system to a group of physicians in Memphis, TN. Originally designed for backing up medical records to a remote location, the requirements were strict on features including encryption, compression, authentication, and other high security measures.

As connectivity speeds increased, the market for online backup services expanded. The advent of Cable and DSL modems offered an opportunity for the average business to take advantage of the latest in secure data transfer technology. During the tech boom of the 1990’s this service gained widespread acceptance among many industries, including small and medium sized organizations that began to rely more heavily on PCs for their businesses profitability.

Now, as high-speed connectivity is becoming commonplace and the general acceptance of secure data transfer increases, the service is gaining mainstream popularity. Many IT firms are looking to add service offerings which provide a recurring revenue stream while requiring minimal resource dedication - and online backup is more attractive than ever. From dedicated remote backup service providers to ‘data management companies’ who are actually in the advertising sales business, the landscape of this industry is becoming more difficult to navigate every day.

Reseller, Client and Server, or Data Repository – Who Has My Data, and Where?
When a business decides to add Remote Backup to their data management plan, the subsequent decision on which type of service to choose can be equally as critical. The data backup industry is perhaps the most confusing market segment in all of digital data management, due largely to the amount of marketing hype and misinformation in the industry as well as the sheer number of companies in this space.

To cut through some of the confusion and propaganda, it can safely be said that there are three main types of remote backup companies an organization can choose to do business with:

  • Backup Service Resellers – These companies act as middlemen, charging their clients for the use of another company’s backup software, hardware, and support network. They may offer some education and assistance during the sales and support process, and they may appear as a more secure option due to their affiliation with a larger company. Resellers usually have no physical responsibility or control over stored data, and may not even know where the data physically rests at any given time. The ability to deliver data to a client organization is dictated primarily by the hosting company, not the sales organization, and the details around this process are typically contained in sub-paragraphs of the contract. These companies are also frequently in direct competition with their own suppliers, which can result in strained supply chain relations and hierarchal availability of services.
  • Online Data Storage /Data Repository Vendors – Like their names imply, data storage and repository companies rent space on their servers and allow clients to simply park data there. Users are typically required to manually log in to the service, to configure the repository to fit their needs, and to manually move data to the vendor’s storage area. Usually deployed separately from an automated and secure data protection measure, data repositories can allow individuals or organizations to share data by uploading it to a third-party server or mailing disks in to be loaded by the hosting company, enabling access by others on a password-protected basis. These offerings can run the gamut from consumer photo-sharing applications to more sophisticated products which allow sharing and collaboration on projects, documents, and other data.
  • Remote Backup Service Providers – These are the specialists within the data backup and recovery field. Typically using locally-hosted client and server software and owning their own storage servers, these companies can extend a completely automated and secure data backup service while maintaining an active role in the deployment, configuration, service, and support of the product. These providers have a significant capital investment and many hours of education and product testing behind them prior to offering the service commercially. Remote Backup service providers are usually technically proficient consultants and are also typically experienced in the areas of technical support, networking, and even software development. Many local remote backup service providers, after a review of many options, have added online backup to their existing portfolio of technology services. This allows them to offer qualified, professional expertise and a more diverse range of services to their clients.

Many companies have signed on as resellers to avoid the cost of supporting their own solution, or to ‘keep up with the Joneses’ in their respective markets. It is much easier and less expensive for many tech firms to become a sell-through point for another company instead of hosting their own solution, especially if their core business isn’t related to data management. Remote Backup providers who host or supervise their solutions locally tend to offer more personalized service; a stronger, more configurable and mature product, and enhanced comfort for the client because of their availability for onsite interaction and consultation.

Customer Service in the Online Backup Marketplace – What Does It Mean?
Perhaps the most important difference between the types of companies discussed above is the availability and level of customer service they offer to their clients.

Customer Service is a major cost center for larger-scale operations, especially considering that the company’s revenues may not be directly tied to the product they are supporting. Support at larger companies is frequently outsourced, and can result in overwhelmed tech support numbers that ring directly through to voicemail, ‘whisper-down-the-lane’ effect on basic support information, little if any trending or analysis of incoming tech issues, and staff that are simply not responsive or knowledgeable about the product or processes involved in the service.

Clients of larger online data companies are typically required to choose from prepackaged service offerings and, due to attempts at automated sales processes, often receive limited direction or assistance from a qualified individual at the point of sale. Depending on the specifics of the contract, many clients are also left to deal with the restoration of bulk-delivered data alone, or to discover and negotiate terms for this service during a critical data-loss period. In the case of one very prominent ‘Data-Mart’ type company, the cost per gigabyte to restore data is a whopping 20 times the cost of the backup of that same amount of data.

On the other hand, customer service is the hallmark of most remote backup service providers and typically begins during the sales process. The provider has the opportunity to become familiar with the business processes and network architecture of an organization, and is able to tailor the service offering to fit the specific needs and budget of individual client companies.

Remote backup service providers frequently bundle other valuable services within the pricing of their online backup service. These services can include the physical re-installation and configuration of operating systems, application software, as well as the supervision of the actual data restore and placement procedure in the event of a major data loss event. For small and medium businesses without a dedicated IT staff, this is an especially critical consideration.

When researching and contacting backup service providers take note of whom, if anyone, answers the phone and what they know or are willing to learn about:

  • Your business and business processes
  • The value and configuration of your data and networks
  • Your staff, location, clientele, and customer base

Cost/Benefit Analysis of Remote Backup Services – Don’t Believe the Hype
As with most cut-rate professional services, budget data service outfits tend to offer a mass appeal marketing approach and a lower level of service. The ‘get what you pay for’ concept has been proven time and again in many technology sectors. Don’t believe the marketing hype. If it sounds too good to be true, it IS too good to be true, and it is extremely difficult to uncover the critical shortcomings of a bargain-basement service until after a data loss event.
This industry like others is rife with concepts that are more myth and legend than reality. Internet-based ‘bare metal restore’ utilities and companies offering to backup a ‘full’ 50 gigabytes every night are designed to grab a shopper’s attention – not to hold it. Limitations in source or destination bandwidth, proper scanning and file preparation, and basic storage and security protocols typically undermine the utility of these whiz-bang products in an actual business setting.
As with any business, these services have to generate cash flow in some way to make up for the fire sale pricing they stamp on their services. Many low-cost data service companies actually derive the majority of their revenue from selling advertising space on their service’s website or product user interface, or by making their clients’ email addresses available to advertisers and partners. An organization needs to consider the long term when shopping for Remote Backup service. Are the trendy, ultra low-cost pricing models sustainable? What would it cost your organization to support a sudden move to a different provider or service? Will there be a backup blackout period during the changeover? Remote Backup service providers offer a sustainable, cost effective approach to data backup services, and have the longevity in the marketplace to prove it.
When evaluating companies, contact the tech support lines, ask questions about security, automation, and version control. Request a restore session during your demo period and find out in what format the data will be delivered after the demo. In other words, spend some time evaluating the technical competencies of both product and staff to ensure that you are getting the service that your organization needs, not just the flavor-of-the-week at a low price