Back(up) To The Future

Several companies, ranging from small service providers to giants like Google, are looking at ways to help customers large and small store more of their data online, and less on tape and even hard drives.

One of those online storage providers, eFolder, is unique in its channel-only approach to the business in that it started out as a solution provider.

EFolder does not deal directly with customers for a simple reason, said John Williams, president of the Atlanta-based company. "We've been in the channel since the '70s," he said. "So we decided to go to the channel with this."

EFolder helps solution providers and MSPs serving mainly small and midsize businesses provide online data backups to their clients.

Partners can resell the service, with the back-end backup capacity provided by eFolder, or they can license eFolder's technology and provide the service directly to their customers, Williams said. In either case, the channel partner provides the service with its own brand name, not the eFolder name, he said.

For many of eFolder's channel partners, the ability to put their own names on the service is an especially important feature.

Laura Steward, managing partner at Guardian Angel Computer Services, a Norwalk, Conn.-based MSP that has been working with eFolder since it first came to market, said that the ability to put her company's brand on the eFolder service is critical.

"As a service provider, we want to show customers our name," Steward said. "We don't want to show the back end. We can tell customers about the back end, but we want our brand all over it. And it's unique to eFolder that we can get our brand even down to the desktop PC. If customers send an e-mail for support, it goes to us, not to eFolder. The client only sees us."

It is very important for smaller customers, said Luis Alvarez, president and CEO of Alvarez Technology Group, a Salinas, Calif.-based MSP that offers services to customers under the iSafe name.

"We labeled eFolder's service under iSafe," Alvarez said. "Customers buy from us because of us, not because we work with a particular vendor."

EFolder offers policy-based online backup capabilities to its solution providers, which can apply it to everything from a client's laptop PC to an entire company. "Customers can mix policies, such as, 'Don't ever back up MP3 files, limit PST files to 10 days and so on,' " Williams said. "I don't know of anybody else who can do this."

The online data is stored using Sun Microsystems hardware and the Solaris operating system at a co-location facility in Atlanta, with a second facility to come online in Salt Lake City next month. Williams said that the system is architected so that there is only a 1 in 4 quintillion chance of losing a 2-Kbyte block of data.

All data sent to eFolder's online storage system is automatically encrypted. "There's no choice in that," Williams said.

EFolder's software lets users and their solution providers set the number of days during which data is active, and then push it to archival data, Williams said.

Backups can be done for both static and open files using the VSS capability of Microsoft's Windows Server operating system, Williams said. The company also allows versioning of the data at the file level so that data can be recovered to specific points in time if needed, he said.

Solution providers can work with eFolder at one of four levels. At the Silver level, they pay a one-time sign-up fee to help cover part of the cost of training and branding with their own name, and in return get recurring revenue of 25 percent of the cost of the service.

At the Gold level, partners pay a one-time fee of $500, and in return qualify for margins of between 50 percent and 60 percent. They can also go Platinum for an up-front fee of $2,500, and get margins of between 80 percent and 85 percent.

Next: Data Storage Infrastructures

Those partners that instead have their own co-located data storage infrastructures can work at the Platinum level, which includes licensing eFolder's technology and keeping all the margins for themselves.

Steward, whose customers typically have between 10 and 300 desktop PCs, said that she appreciates the margins and the recurring revenue she gets from working with eFolder.

"In this industry, everyone has lost margins, but we regularly see 30 percent to 50 percent with eFolder," she said. "This is great for our nonprofit customers, too. We can drop our margins to give them a break, and still make money."

Alvarez said that eFolder makes it easy to get started with its trial program, which allows clients to use the service free of charge for a time and then keep it or try something else. "One hundred percent of those who try it end up buying it," he said.

Williams and his partners were the founders of SafeNet, an Atlanta-based solution provider that was one of the first certified networking partners for both Novell and Microsoft, in 1990. It was a traditional networking VAR until 1998, when it went into the application development space, where today it serves about 10 clients with projects lasting up to five years in the speech-recognition, telephony, database and medical markets.

It is that medical market experience that moved SafeNet into the data backup space. The company in 2000 wrote code that allowed medical caregivers to securely swap data with each other, Williams said. The company originally looked at Novell's technology for moving files, but the vendor was in a state of turmoil at the time. So SafeNet developed the necessary application to do the job, and realized that it could be applied to a wide range of customers.

EFolder was spun off as a separate company because of SafeNet's focus on the medical market, Williams said. "Also, SafeNet worked with end users," he said. "With eFolder, we wanted to work with the channel."

The company offered its beta code to 50 clients in the Atlanta area, Williams said. And they still are there, with the exception of one who passed away and one who decided that a second hard drive was good enough for backups. The remaining 48 have since started working with solution providers, he said.

Going forward, eFolder is making major enhancements to its service. The first is LocalStore, which allows clients' data to be backed up locally as well as off-site, giving them both local and remote data protection. Williams said the local device can range from a USB or external hard drive for laptops to a local SAN or NAS device or to a server configured as a backup device.

"One partner recommends customers take servers that they have been using for three years, leave them turned on and turn them into backup servers with our software," he said. "It takes three minutes."

Also coming is the ability to configure a virtualized server almost instantly to replace a physical server that crashes. "We could have that feature in two weeks if we gave customers a 30-minute time window," Williams said. "But we want it so it can be done within five minutes. It's close. This feature monitors a server, and asks it, 'Are you there?' over and over. If it's not there, the software grabs the original backup with applications and data and sets up a new server."

In addition, eFolder is working on a data crawler that looks at known data types to make sure data that needs to be backed up is backed up, Williams said.

The virtualized server feature is a great extension to eFolder's technology, Alvarez said. "A lot of our customers think that many companies don't feel their need to be up and running is important. But it's as important to them as it is to an enterprise. Downtime costs a significant amount of money. The ability to provide these virtualized servers is big to them."