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Backup & recovery: the killer app for ASPs. (ASPs).

The ASP model in general has not lived up to its promise -- except for one shining exception: backup and recovery service providers. Unlike other ASP offerings, in this case, having a remote service provider is actually an advantage.

Measuring the return on investment of information technology (IT) initiatives has always been a difficult proposition. Large upfront capital expenditures, combined with extended deployments and often difficult-to-measure results, require financial executives to make at least a small "leap of faith" when justifying IT budgets.

The application service provider (ASP) model promised to improve this situation. By "subscribing" to applications over the Internet for a regular monthly fee and eliminating the costs associated with deploying and maintaining applications in-house, the ASP model seemed like a "can't miss" proposition for reducing IT costs without sacrificing IT effectiveness.

However, the ASP model has not taken off. On the service provider side, the large upfront capital expenditure required to launch an ASP operation, combined with the relatively low monthly subscription fees, have made it extremely difficult to turn the ASP model into a profitable business proposition. On the end-user side, giving up control of mission-critical applications can potentially cause disruption to key business processes. These factors and tighter capital markets have slowed ASP model adoption.

There is one shining exception to this rule: online Internet Protocol (IP)-based backup and recovery service providers. These service providers give companies the ability to use the Internet, on a subscription basis, to store critical data in a secure, remote location. Backup and recovery is ideal for an outsourced solution, because while essential to every business, it doesn't provide a company a strategic advantage -- only a strategic disadvantage if not done well. Therefore, it makes little sense to expend scarce internal resources administering to it. Furthermore, there are inherent advantages to online backup and recovery services: namely, should a disaster occur in your business, you want all of your data to be located in a secure remote location, rather than within your own building. So, unlike other ASP offerings, having a remote service provider is actually an advantage when it comes to backup and recovery. Indeed, it is thought of by many as the "killer app" for the ASP model.

Protecting Data: An Organization's Most Important Asset

Four primary assets are needed to effectively operate an information system: facilities, hardware, network and data. In the unfortunate event of a disaster, hardware and networks can be replaced, and facilities can be moved to a new location. Data, however, is the only company asset that is irreplaceable.

Every organization has a core set of data that is absolutely essential to running its business. Whether it is payroll information, customer records, valuable research, financial records or e-mail files, all corporate data is valuable and must be protected. Data loss can result from a number of factors, such as: human error; operating system or application software bugs; hardware failure; fire, smoke or water damage; power outages; employee theft or fraud; man-made disasters such as sabotage, hacking or viruses; or natural disasters such as earthquakes or hurricanes.

Data loss can be catastrophic. It can result in the loss of irreplaceable information or files which, in turn, can trigger a chain-reaction of negative events, including lost revenue, lost opportunity, customer dissatisfaction, shareholder insecurity and damaged corporate image. Regardless of the cause, data disruption and loss poses a significant risk for any business.

To preserve data, companies must have a plan that incorporates three components: backup, archive and recovery.

* Backup -- the process of copying important data and maintaining duplicate copies for restoration in case of data loss or damage. Protecting data backups offsite is a necessary precaution for disaster recovery, and multiple generations of backups provide the ability to recover to the optimal point in time.

* Archive -- involves copying disk file systems and placing the copy (usually on tape) into long-term storage. Archives can create a legally acceptable business history and can also be used to free up hard disk space by allowing users to create an off-line version of static data or files, and deleting the online copy.

* Recovery -- the process of recovering from an outage or disaster. In off-site vaulting of data, backup media is protected in a remote, secure location. This off-site media is available for system recovery if the on-site media is lost or damaged in a disaster.

Managed Data Protection, Business Continuity and Disaster Recovery

For businesses that don't maintain large data centers or IT staffs, data protection and business continuity is often cumbersome and error-prone. Even companies that have data protection and business continuity plans in place often do not do an adequate job, due to lack of resources or expertise. In addition, traditional batch-style, tape-based backup has been, and continues to be, a costly, labor-intensive process with frequent manual intervention and great potential for error.

As a result, many organizations perform bulk server backup "when time allows" and store tapes off-site even less frequently. In the event of an office fire or some other disaster, these companies are often left trying to recover their businesses using data that is weeks, or months, out of date.

Advances in data replication and security technologies, combined with reduced bandwidth costs, allow backup and recovery service providers to offer online backup, recovery and electronic vaulting to businesses. These service providers offer data protection services remotely -- including continuous online data backup, recovery and electronic vaulting. Unlike traditional methods of data protection where data is typically backed up every 24 hours, at best, backup and recovery service providers offer continuous data backup, safeguarding an organization against data loss and helping them to recover and restore lost data in the event of a disaster.

By using a backup and recovery service provider, organizations still retain front-end control of their data protection operations, while handing off such burdensome back-end tasks as server backup, device maintenance, tape management and off-site removal and storage.

Other benefits of backup and recovery service providers include:

* Simple and low-risk data removal: Data is no longer at risk of being misplaced during the removal process. Backup and recovery service providers utilize low-cost Internet connections through a secure network connection to a backup server located in a protected off-site data center vault, so data is automatically and immediately sent off-site. Tape damage or mishandling, as well as transportation issues, are eliminated.

* Safe and accessible data archiving: Data is always stored in a safe environment and accessible from an off-site and secure data center.

* Reliable data recovery: Providers eliminate problems surrounding recovery, including reliability of restores, inaccessibility of current data and slow recovery speeds.

* Ease of manageability: Customers can manage their data protection process through a personalized Web management interface, so they can view the status of their data and initiate recovery from anywhere -- through any Web browser. While the service provider assumes responsibility and automates back-end functions, users retain overall control of their data backup and recovery by creating customized backup policies, checking status and initiating restore operations whenever needed.

Gartner estimates that two out of five companies that experience a disaster will go out of business in five years. Companies can no longer afford not to have a data protection and business continuity strategy as part of their overall disaster recovery plan. With the new urgency surrounding these issues, backup and recovery service providers offer companies of all sizes and budgets a solution that will not overburden even limited internal resources, but will provide the protection, reliability and peace of mind that is needed. And for financial executives, it's one area of IT where ROI does not require a leap of faith.

RELATED ARTICLE: Business Continuity: Planning for the Worst

In a late-2001 survey by Gartner Inc., technology-purchasing decision-makers cite disaster recovery and business continuity among their top five priorities. A business continuity plan is a critical aspect of an organization's risk management strategy and is instrumental to its survival, should disaster occur. Every business continuity plan should:

* Protect and secure data

* Shorten disaster recovery time

* Improve organizational resilience

* Reduce risk and exposure to loss

* Decrease downtime

* Enable compliance with regulatory and legal requirements

Bob Cramer is the president and CEO of LiveVault (, a leading provider of fully managed online data backup and recovery services for small-and medium-size businesses, the remote offices of large corporations and mid-tier data centers.
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No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 2002, Gale Group. All rights reserved. Gale Group is a Thomson Corporation Company.

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Title Annotation:application service providers
Author:Cramer, Bob
Publication:Financial Executive
Geographic Code:1USA
Date:Jun 1, 2002
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