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Managed backup services: Pros and cons of hosting approaches

There are two basic approaches to providing managed backup services: reselling services from another provider or, for brave and deep-pocketed providers, building your own NOC. Find out the pros and cons of each approach.

By Yuval Shavit, Features Writer

Providing managed backup services is a good way to complement or replace your client's existing backup practice, but building your own backup site is expensive. Many value-added resellers (VARs) and managed service providers (MSPs) don't run their own backup sites; instead, they resell a larger managed backup provider's services. In this installment of our Hot Spot Tutorial on managed backup services, we'll cover some of the considerations you should keep in mind for both options.

Building out your own managed backup services can be extremely expensive, said Jeff Danos, CEO of Data Protection Services LLP (DPS), a Hammond, La., managed backup provider. After Hurricane Katrina almost destroyed DPS's main facility, the company decided to build a secondary site, Danos said. DPS built that site in a steel and concrete building, outfitted with redundant, dual-fuel power generators and a redundant air conditioning system, designed to withstand virtually any disaster, Danos said. The project cost DPS several million dollars, and that was just to build a second site -- starting from scratch means you'll need to develop the in-company expertise and procedures, which will take even more time and money.

Reselling managed backup services

Unless hosted backup is your main business, if you want to be in the managed backup services business, you should consider reselling another provider's backup services. Small and medium-sized businesses (SMBs) usually don't have a lot of IT experience, so they rely on their resellers to be trusted advisors on all things IT as well as providers of technical services. But many MSPs can't afford to be all things to all people, so relying on another provider for the technical aspects of online backup lets you offer good services without having to build them out yourself, said Michael Halsey, president of Profile Technologies Inc., a managed service provider in Littleton, N.H. Profile Technologies outsources its managed backup services.

If you do use another provider for managed backup services, it's important to test those services regularly to make sure that restoring a system is quick and efficient. Like any other technology, backups can have hiccups, so you shouldn't necessarily look for a new provider if test runs occasionally hit snags, Halsey said. But if your provider has problems too often, it may be time to find someone new, he said.

It's also important to ask your provider whether the backup it provides is compliant with regulations your clients may need, as well as any other special considerations. For instance, if the provider is in an area susceptible to natural disasters, see if it has an alternate site.

Every MSP has its own business model, but if managed backup isn't your main focus, don't be too worried about your margins. Halsey said he makes a profit from managed services with some clients and doesn't with others, and others vary month to month. But his clients pay for managed services expecting him to cover all of their IT needs, and backup is a part of that, so it's important to offer those services even if they're not the most profitable offering on your line card, he said.

Running your own managed backup services site

Building out your own network operations center (NOC) to host online backup gives you more control over services and pricing -- and holds plenty of potential reward -- but creating a NOC can be complex and cost-prohibitive. Backup site NOCs require fast Internet connections -- your site should never be the bottleneck when a client is backing up or restoring -- as well as constant physical maintenance for disks.

Disks and storage tapes degrade over time, so a managed backup services provider needs to have the processes and staff to regularly check and repair storage media, Danos said. Many backups are done using a differencing system -- the technology creates a base image and then records only the differences from backup to backup -- so a corruption can be devastating. If your client's base image becomes corrupted, the whole backup could be lost, Danos said. A backup provider should run tests to validate backups regularly and fix any problems that arise, but that can be a complex process, he said.

Regulation compliance makes things even harder. If your clients include companies in the medical field, the entire backup process -- transferring the data to be backed up, storing it at rest and transferring data back for a restore -- needs to be HIPAA-compliant. Any company that backs up credit card information needs to be PCI-DSS-compliant as well. Many backup providers are also certified for SAS 70, an auditing standard for service providers. Your backup site will need to be physically secure from intrusions as well as natural disasters, including flood and fire. Many managed backup services providers have multiple backup sites and keep them mirrored, in case one becomes unavailable for any reason.

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