It's All About the FREDs and the BEARs
LiveVault's data protection service replaces tape backup in small and medium-size businesses.
Ask Robert “Bob” Cramer and he’ll tell you, the success or failure of a data vaulting service aimed at small to medium sized businesses comes down to BEARs and FREDs. The CEO of LiveVault Corporation told me recently that Bad Experience At Restore (BEAR) can affect customer confidence in the use of a remote service provider to replace his in-house tape backup process, but a Failure to Restore Expected Data (FRED) can really louse up a deal.
"We've had only two FREDs in two years, and none in our recent quarters," reports Cramer, "and we have had only one BEAR in two weeks."
He says that the current remedy provided to customers who encounter problems with his burgeoning data backup business is a refund of their money, but the need to execute this codicil just never comes up. At 200-plus customer sign-ups per quarter, Cramer says, the service is well on its way to success.
LiveVault is a two-year-young data protection service provider based in Marlborough, MA. Iron Mountain holds a 12 percent stake in the firm, which targets "small to medium sized businesses and small branch offices of large companies" with its service-based replacement for in-house tape backup.
The company's offering keys on the increased availability of high-bandwidth network on-ramps to the Internet such as xDSL, and on nine patented technologies developed by LiveVault to address the failure rate of backup and other issues of secure data transfer to the company's vaulting facility. Cramer says, "The 'last mile' situation is working for us, with more and more companies getting access to high speed pipes at affordable prices, and so is the increasing pain associated with traditional backup."
He cites Gartner Group numbers to support the claim that tape backups fail nearly half the time, "and that’s in Class A data centers. Outside Class A data centers, where most of the 6 million SMBs in the USA live, the failure rate is even higher."
Who needs the hassle of tape, he asks, when there is a viable service-based alternative? LiveVault deploys using a “load and go” software package, "installed on the dominant server in the customer’s LAN," which is then used to replicate customer-selected data across the Internet to LiveVault’s "Class A vaulting environment." Cramer offers that the Internet connection is made secure through LiveVault's private networking technology and makes use of the largely unused upload capabilities of high bandwidth net connections.
"We offer customers complete control over who can request a data restore, an important consideration in law firms, financial service companies, government organizations, and medical and health care firms," Cramer notes. He adds that customers can monitor the process on-line and are provided with Service Level Agreement (SLA)-based guarantees of performance and privacy.
"We offer a refund of the service cost if anyone is unsatisfied. But, there have been very few problems. We considered getting a Lloyds of London policy, offering a big dollar payout to a customer if our solution broke down, but we thought it might encourage folks to try to break it."
The cost of the LiveVault service is $2950 per year "for a single dominant server," which is more than made up, according to the CEO, by the reduction of software, hardware, and labor costs for "unreliable, in-house, tape backup solutions." He claims his current sign-up rate indicates the beginning of a trend that he hopes will sweep through the six million or so companies comprising the SMB market.
The company is also working with channel partners, especially service providers for law firms, medical services firms, and financial information companies, to deliver the LiveVault offering as an add-on to their other services. "We are a value-add for these partners and hope to lock down channel partners that will enable us to gain a major part of the $3 billion market currently going to internal tape."
We'll be watching to see whether this Storage Service Provider can crack the market where so many other SSPs failed only a scant 24 months ago. Meanwhile, watch out for the BEARs and FREDs in your own shop.
Jon William Toigo is chairman of The Data Management Institute, the CEO of data management consulting and research firm Toigo Partners International, as well as a contributing editor to Enterprise Systems and its Storage Strategies columnist. Mr. Toigo is the author of 14 books, including Disaster Recovery Planning, 3rd Edition, and The Holy Grail of Network Storage Management, both from Prentice Hall.