Small business represents a huge opportunity for providers of storage as a service, and solution providers are stepping up to the challenge with the help of a number of new providers of online backup services.
Solution providers have said that backup tapes are no longer acceptable in the small-business space due to their expense and the manual processes involved for companies that typically have no on-site IT personnel.
In fact, said Matthew Mosteller, owner of Vashon IT, which serves microbusinesses on the island of Vashon in Washington state, tapes can be downright dangerous to his clients.
“One construction firm was set up so that after data was backed up to a tape, the tape was erased,” Mosteller said. “They did this over a year. When their system crashed, it took a month of digging to recover. It almost put them out of business.”
The acceptance of storage as a service by small businesses will grow as they get used to the idea that much of their business data is already being handled by third parties, said Doug Chandler, director of storage software and services at analyst firm IDC.
Small businesses are already storing a variety of data outside their own IT infrastructures—including bank accounts, insurance information and legal information—and are outsourcing many business functions, Chandler said. “So there is a certain comfort level with it.”
Recent entrants to the small-business backup space recognize the need to work with solution providers.
One of them, Atlanta-based eFolder, was founded by John Williams, who also is president of solution provider SafeNet.
EFolder is recruiting solution providers for its online backup service, the development for which started three years ago because, as a solution provider, Williams saw small business clients’ horror stories about lost data and bad tapes.
EFolder is offering solution providers three partner levels. At the basic level, solution providers can resell the service to customers in return for 25 percent of the revenue, with eFolder handling hosting and support. Those who provide installation and first-level support can resell the service using eFolder’s hosted infrastructure in return for 40 percent of the service revenue. And those with their own hosted infrastructures can pay license and maintenance fees and keep 100 percent of the service revenue, Williams said.
The suggested retail price for the first gigabyte of uncompressed data is $20, and VARs are able to set their own price, he said.
Steve Harper, president of Network Management Group, Hutchinson, Kan., said while he likes the ease of setup and use of eFolder’s technology, the real reason he works with eFolder is Williams’ channel commitment.
“I like John Williams, and I believe in VAR-to-VAR selling,” Harper said. “John has a proven track record of growing new businesses. He understands data and what it takes to succeed in this business.”
Vashon IT partners with eFolder and uses that company’s hosted data center for the storage, Mosteller said. “We like the fact that they host it, and we get good margins,” he said. “There are no startup costs—zilch. It’s a great way for small guys like me to get started.”
Another newcomer, Brisbane, Australia-based SOS Online Backup, is looking to recruit about 1,000 U.S. small-business solution providers within the next 12 months, said Ken Shaw, head of its U.S. operations at SOS.
Data that has changed since the last backup is compressed and backed over the Internet with 256-bit AES encryption, Shaw said. And new this month is live continuous backup, under which changes to the data are immediately backed up.
At the managed services SOS reseller level, partners that can handle customer support pay a onetime fee of $995, which gets them space on SOS’ storage infrastructure. They keep 50 percent of first-year customers’ revenue and 30 percent of renewals.
Solution providers also can resell the service but leave customer support to SOS, making them eligible for 30 percent of contract revenue for the first 12 months and 20 percent of renewals. Solution providers with their own data centers can rebrand the SOS service and keep 100 percent of the revenue.
Small businesses can expect to pay about $75 per year for 1 Gbyte of capacity, or about $340 per year for 10 Gbytes, Shaw said.
From Chennai, India, comes Vembu Technologies, which started offering its backup services to the U.S. channel this year, said Lakshmanan Narayan, vice president of marketing at the company. Vembu offers software for home and small-business backups, as well as the Service Provider Edition of Vembu StoreGrid software for online backups.
With the software, solution providers and MSPs can have their clients backing up data from their mobile PCs and servers to the partner’s hosted storage within 30 minutes, Narayan said. Solution providers pay a fixed fee per client and keep all the revenue, he said.
When signing up a small-business customer, the solution provider can do the first backup to a USB hard drive and copy the data to its data center, Narayan said. After that, backups of changes to the data can be done online.