Small and medium businesses (SMBs) have been generating mission critical data at a much faster rate than before. As a result, the need for data backup and recovery has grown multifold, making the SMB market segment a potential gold mine for vendors offering backup and recovery products. The sheer size of the SMB market and the fact that it is relatively untapped has doubled the enthusiasm of vendors and solutions providers.

Gone are the days of maintaining data in bulky registers and gone are the days of securing data on just one machine. With the most crucial and confidential  data of an organization now being managed on the PC, data backup and recovery today is as essential in a large corporate as is in a small or medium setup.

The phrase 'data backup and recovery' covers a wide gamut of solutions, involving both hardware and software vendors. Storage hardware starting from disks to tapes to storage servers are all an integral part of data backup. Clubbed with software applications, this hardware makes powerful storage management solutions. Data backup and recovery are a part of storage management solutions. This topic further branches out in too many specialized and focused solutions.

No matter how specialized these solutions get, all of them ultimately serve the same purpose ie maintain business continuity. So, it would be wiser to call data backup and recovery solutions as 'business continuity' (BC) solutions.

Growth drivers
Over the years, the BC solutions market has grown by the sheer growth in data size across various user verticals. Today users are looking for reduced back-up time. So, for example in a call-center environment, certain departments would like their backups to happen instantaneously.

However, this need may change from one vertical to another, wherein a certain set of users may want to compromise on the back-up time for a cheaper solution. Majority of the BC solutions come from manufacturing, BFSI, telecom, enterprise and IT companies. The government is one of biggest possible customer to make use of BC solutions. However, the slow pace of development in government departments keeps solution providers away from this customer segment.

A quick look at this market shows that vendors are targeting the small and medium business (SMB) with its so-called business continuity solutions. SMBs constitute a major chuck of the business in a country like India. This segment is now at its fastest best, generating data that is doubling every year.

According to industry experts, majority of this data generated in the SMB market is not addressed by any backup or data recovery solutions. That makes this market segment a potential gold mine for vendors that offer backup and recovery products. The size of these organizations makes it all the more easier for vendors to implement and administer business continuity solutions.

To address these SMB challenges, storage vendors like HP, EMC, Veritas, CA, StorageTek, Quantum, Imation and many others are taking different approaches. They are developing products specifically geared to meet the data storage and retrieval needs of smaller organizations. And it seems the trick is working.

Vendors try to attract SMEs
HP announced new storage initiatives for the SMB market called the Simply StorageWorks initiative. It is a series of new investments, programs and solutions that will help SMBs effectively address their increasing data storage. "The SMB market in India is the backbone of our economy. They are increasingly facing the same pressures as larger enterprises when it comes to the exponential growth of data," says Avijit Basu, Country Manager, StorageWorks Division, Hewlett Packard India Sales.

Vendors have managed to convince SMBs that their data is as important as it is for a Fortune 500 company. Now you find that more and more SMBs are spending on data backup and recovery infrastructure. The critical nature of the stored data has led to more deployment of backup and recovery infrastructure.

EMC rolled out solutions for mid-sized enterprises and SMBs. It introduced a series of Express Solutions for networked storage, for backup and recovery, for archiving and business protection.

"The mid-tier segment is poised to be a significant growth engine for storage solutions in the next few years. Mid-tier and SMB enterprises today need simple and affordable solutions that can enable information management faster easier and at lower cost," explains Manoj Chugh, President, EMC India and SAARC.

According to findings by New York-based AMI-Partners, a leading consulting firm, in 2004, India's PC-owning SMBs spent approximately $26.3 million on direct-attached storage (DAS), while network storage spending amounted to $16.9 million.

"DAS has traditionally been the default choice among India's small and medium businesses. Yet the ballooning number of network users, as well as the speed, capacity and plummeting prices offered by network storage, will make it the preferred storage solution over the next few years," states the findings.

However, despite the healthy growth outlook, the SMB sector continues to be a difficult segment for backup and recovery vendors to address. And the reason is the growing data in an unorganized manner across the organizations.

Never ending data 
From terabytes to petabytes, data volumes are only growing. And with all the Government regulation that makes it mandatory for organizations to archive electronic data, this growth will be much faster than ever before. The total data size today is put around 6500 Terabytes. And with a growth rate of 40% percent this market ready to boom.

AMI research shows that a third of medium businesses believe that increase in required storage capacity are generated by growth in the number of users, while more than one in four cite the expanding network of business partners with whom they conduct individual electronic transactions. This is true of small businesses also, with nearly one fifth of PC-owning SBs citing expanding storage requirements due to increases in the number of network users and electronic transactions with business partners.

India's SMBs are realizing the importance of customer relationship management, and are gradually adopting enterprise CRM applications to provide better customer service. According to the AMI report, currently, almost 5% of small and medium businesses have adopted CRM software, and an additional 15% of businesses anticipate investing in CRM solutions this year. Spending on enterprise-level applications such as ERP, whose usage is still at an embryonic stage, is expected to surge in the next few years.

The increasing focus on security is also leading SMBs to invest in data backup and disaster recovery solutions. 29% of MBs and 15% of SBs attribute their increased storage requirements to the need to create data back-up, states the report.

CIOs of SMBs have realized this and the immediate question in their mind is: How do we manage and protect this exploding data?

A typical organization can have data all over its IT infrastructure spanning from networks, desktops, laptops and even remote locations. And if the data is critical in nature, IT managers have every reason to worry about protecting it.

To further complicate it, a large percentage of critical data is stored on desktop and laptop computers, and is usually outside the reach of most enterprise storage management software products to backup and protect them. This becomes all the more difficult in the case of mobile users who are rarely connected to the network.

Maintaining and protecting it has become a challenge for IT professionals. A new approach is required to protect business critical data often stored outside the reach of conventional enterprise back-up mechanisms.

Why only few backup?
According to IDC, only about 40% of all SMBs back up their data regularly. For a company with any dedicated IT staff, backup operations can become too complicated and time-consuming. Traditional backup mechanisms are not very efficient in handling real-time backup, affecting network performance. As a result, many companies perform backups during off hours, which put a day's data at risk.

So what is the ideal solution? The ideal storage management solution should back up files and information automatically and in real-time. A real-time client backup solution can fulfill today's storage management needs whether it is a small organization or a big one. It should enable backup and protection of data on the desktop and laptop computers as well. There should be solution that can backup mobile data also. But these are expensive solutions. Can an SMB afford such solutions?

CIOs who have implemented such solutions look at this expense as an investment from a long term perspective. "You really need to compare the value of the data that you are protecting with the cost of the storage solution. Typically companies devote 30-40% of their IT budgets for storage related solutions, but this percentage changes depending on the business and the importance of data involved," says Ajit Karunakaran, Country Head, Imation.

How much you should spend purely depends on the company's budget and business needs. One may consider buying high-end software that takes snapshots of data at periodic intervals so that there is very little constraint on network, and restoration of data is a matter of minutes, if not seconds. Or, depending on the criticality of the data, one can go in for a low-end backup solution. What is important is the reliability of the backup mechanism.

How critical is your data?
Both vendors and solutions providers are doing every bit to make organizations realize how bad it could be to lose critical data. Most IT managers in organizations are aware of the need for an efficient backup and data recovery solution. However, it is surprising to know that, only a third of them actually use business continuity solutions.

"One gets to know how critical their data is only after they lose it," says a CIO attending the Dataquest CIO summit. When data is lost, there are ways to get back at least part or full data. But, what businesses need to learn is the cost of restoring the lost information or restoring a computer to operational state after hardware or software fails. When measured against the costs of technical support and lost employee productivity, it turns out to be huge.

Comprehensive data recovery tools restore lost data. What makes it efficient is the ease with which it can do that. An efficient business continuity solution is that, which addresses the protection of recoverable as well as unrecoverable information. Recoverable information includes operating system or application software. This information can be recovered through reinstallation. Whereas unrecoverable information is documents, presentations or spreadsheets, which cannot be recreated easily.

In such a scenario, if a backup mechanism is absent, the role of recovery tools comes in. There are many ways by which one can lose data. It can be just by way of inadvertent file deletion or overwrites, or it could be new software installations, hardware failure, virus or hacker attack, theft or a natural disaster.

Recovery tools business
Recovery tools solutions is a promising business in India. Quite a few vendors in this segment offer a range of recovery solutions and all of them appear up-beat about their business in India. While most backup solutions come with its own data recover solutions, there are few companies, which specialize only on data recovery products, which includes preventive as well as post crash recovery products.

The one prominent player in this field is Delhi-based Unistal, which is competing with pure data recovery service players. The success of the companies is triggered mostly because of the local support they provide. According to Alok Gupta, Director-Marketing, Unistal Systems, data recovery as a business proposition is an extremely viable option. The more crucial the data, more important is the need to recover it, and higher is the cost of recovery. "Margins here depend on the reliability and trust the customer has on the solution provider," adds Alok.

This year, the company focused on offering Crash Proof -data loss prevention software with another product of it-the Kaspersky anti-virus software. This announcement marked Unistal's 10 years of operations. According to Alok, "This alliance is strategic because it combines the well known strengths of Crash Proof for data loss prevention with that of Kaspersky Labs, who have the world´s best scan engine."

To expand its market reach into as yet untapped areas, Unistal plans to rope in about 25 distributors to retail its products in every corner of the country. The company has distinct sets of partners for retailing, data care solutions, services and education segments. It also works in conjunction with hardware vendors for OEM supplies.

Data recovery services
For channel partners, data recovery as a services is a very lucrative business. Despite all the awareness about data backup, you will always find companies compromising on cost and omitting on expensive backup and data recovery infrastructure. Solution providers see these companies as potential customers who would some day avail of data recovery services from them. The presence of such companies in large numbers has made pure data recovery service businesses sprout everywhere.

Unistal has its own data recovery centers in Delhi, Mumbai, Bangalore and Chennai. This is being further strengthened by adding 50 data recovery centers by the end of this fiscal. Alok explains, "Today data recovery centers are the lifeline of business processes; organizations cannot afford to stand a delay of even a single second in data loss situation. Like every town should have a centrally-located hospital, in the same fashion we would be starting service centers at strategic locations, one in each city."

Similarly, there are thousands of solution providers who specialize in data recovery services. But most of them operate in the unorganized segment. Very few qualified recovery centers use licensed tools and hence do not guarantee 100% recovery of data. Whereas there are some who give a commitment before the data is recovered.

Outsourcing backup and recovery
Another trend that is catching up in the medium and large enterprises is outsourcing BC applications. If a top bank can outsource its backup and data recovery application, can other CIOs ignore the trend? However, a few checks need to be in place. CIOs discussing the future of backup technologies and the business needs at the recently held Dataquest CIO Forum presented few tips for all those who are thinking about outsourcing backup and recovery applications:

• Service level agreements need to be well expanded. It is critical to pinpoint every single detail of service delivery, given the importance of data.

• Differentiate between different types of data. A hybrid strategy may be adopted, where some critical data remains with the organization, while transactional data is outsourced to a third party service provider.

• RoI should be the guiding principle. Be clear as to what do you save by handing your precious data to someone else.

• Service should be chosen carefully. Third party providers offer value-added services, right from DR to media migration services (migration of data from one media type to another) and even best practices consultancy.

Channels in the business
Almost all companies in the field of business continuity products provide these solutions through the channel. And for partners in this field, it is beginning to be a lucrative business.

As a business proposition, backup solutions have still not got commoditized, hence offer very lucrative margins between 10%-20% for channel partners. Also, there are not many partners in this business, so the business becomes far more attractive at this juncture. Further, the kind of margins partners can look at making on tape media is unparalleled at about 30%-40%. Sometimes it is even much more than that.

“The SMB market in India is increasingly facing the same pressures as larger enterprises, when it comes to exponential growth of data” “Mid-tier and SMB enterprises today need simple and affordable solutions that can enable information management faster, easier and at lower costs” “Typically companies devote 30%-40% of their IT budgets for storage related solutions, but this percentage changes depending on the business and the importance of data involved” Avijit Basu, Country Manager, StorageWorks Division, HP India Manoj Chugh, President, EMC India and SAARC Ajit Karunakaran, Country head, Imation

For partners, providing backup and data recovery solutions is like a value-add, while selling server or storage products to their customers. So, backup as a business is a very interesting proposition as on today. With lot of visible activity in the SME segment, solutions providers are happier to take up business continuity because of their close proximity to the SMB segments.

The future of tape
A reliable backup medium is equally important as the backup and recovery solutions in its software form. A trend that is slowly evolving for backup and restore is that customers are using disk-based solutions, while for archival purposes; the good ol' tape-based solution is still popular. Tape continues to be the cheapest backup medium. It is cheaper by 30%-40% compared to other disk-based solutions.

 However, depending on the data access requirement of customers, a suitable solution should be chosen. Tape today is competing with hard disk drive, which is doubling in capacity and halving in cost (per GB) every 12 months or so. If tape has to continue in the race, it must grow at the same pace. Therefore, we are seeing faster tapes with higher capacity. The magnetic density on tape is increasing, at the same time it is getting thinner.

New features like a cache being integrated on cartridges can help bring repeated seek times to within close range of a disk drive. As the technology keeps growing, the compatibility of newer cartridges with older drives is suffering. Newer formats on tape may mean older drives are no longer working for new cartridges. Also, the newer tapes have to be stored in accurate climatic conditions, in low humidity and right temperature.

We have heard about requirements of enterprise storage doubling every year, and that storage is becoming a major investment area under the IT budget. There are several factors that influence the purchase of storage, backup and data recovery infrastructure, but at the end of the day, a CIO is responsible for the management and security of data that is growing exponentially.

NELSON JOHNY

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