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Panel Explains How to Turn Regulations Into Revenue

Regulatory compliance can drive purchasing behaviors. Such is the case with remote backup and restore services.

Federal regulations such as the Health Insurance Portability and Accountability Act of 1996 and the Sarbanes-Oxley Act of 2002 require secure storage of data. Similarly, companies need to comply with recent federal regulations governing the discovery of electronically stored information, also called e-discovery or electronic data discovery (EDD), during litigation.

These regulatory requirements are increasing the volume of data companies need to back up and also what they need to back up, said Doug Howard, chief strategy officer for Perimeter eSecurity, which rolled out its Remote Backup & Recovery service in May 2008.

Howard is one of three panelists in Monday’s session, Turning Regulations into Revenue,” which explores the opportunity for indirect sales channels to take capitalize on changing regulations to sell remote data backup and restore services to businesses.

Joining him are Randy Marshall, president of OMNI Solutions Inc. and Sorangel Canigiani, group manager – business solutions group for Verizon Business.

While regulations may be forcing the issue, these panelists said there have been many changes in the technology have impacted price points, making it more attractive to companies now than ever.

Rates for online backup services have been dropping steadily over the last four or five years, so that today market pricing is around $5-$6 a gigabyte, said Howard. He credits the price declines to reduced infrastructure costs, particularly storage disk costs.

Users can further reduce costs by picking and choosing what they back up. “In the past for digital offsite data storage, it was all or nothing,” said Marshall. “All the data had to be backed up and charged per gigabyte.” With people’s propensity to be pack rats, the usage charges can soar. OMNI Solutions offers a cost-effective solution to the problem called LAN Vault. The service, which was introduced last summer, allows users to back up all data locally on an appliance (basically a PC with a 200gig hard drive) and take a subset of the data – the mission critical data – and sends it offsite to the data vault.

With more telcos becoming managed services providers, subscribers also have an opportunity for bundled discounts based on their total spend. That’s the case with Verizon Business, which has been selling its Remote Backup & Restore services for three years. RBR was rolled out to the carrier’s indirect sales partners through the Verizon Solutions Providers Program in April 2008. “We can provide additional discounts if they are purchasing MPLS, security and Internet because we have contractual types of discounts,” said Canigiani. “That makes is even more attractive for our customers.”

With more flexible packages now available, VARs and agents can go back to customers with a more appealing offer. But at today’s price points, the conversion from an in-house solution that’s paid for and working can be hard to justify, but it’s easier than a few years ago when pricing was two and three times higher, Howard said.

And luckily price isn’t always the primary trigger. The No. 1 purchasing trigger is remote storage in support of disaster recovery and business continuity goals while No. 2 is replacing aging technology with recurring tape and backup failures, said Howard. “I can’t mention how many customers for whom the primary driver is not continuity, but simply this is a pain in the butt,” said Howard, noting that IT managers just want to get it off their plates.

IDC’s research confirms that companies are evaluating online backup services for business continuity and long-term record retention. And, demand is especially strong among firms of all sizes that are facing budgetary and IT staffing pressures.


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