In early November, an article in The New York Times carried a sobering statistic: Up to half of New Orleans' 115,000 small businesses are expected to fail in the coming months. The article arrives on the heels of an Experian report noting that out of the $40 billion in outstanding commercial balances owed by hurricane-hit Gulf State companies, 72 percent belonged to small businesses. "Contingency planning is unappealing, because you don't want to saddle your business with extra costs to prepare for a scenario that's one in half a million," says Tapan Datta, global economic advisor, business strategies, at Experian. "You'd rather not think about it."
One company that is thinking about small businesses and their ability to function in a post-disaster climate is LiveVault, a Marlborough, MA-based firm providing small- to mid-sized businesses with data backup and recovery solutions. Its program, InSync, offers fully automated service and continuous data protection, storing information offsite via the Internet on a disk-based program that eschews the use of tape. "[Tape is] the way people have been doing it forever," says Bob Cramer, president and CEO of LiveVault. "Analysts estimate that in the best data centers in the world, about 10 to 20 percent of backups fail to fully recover because it is such a complex process. When you go to a small- or mid-sized business, that error rates escalates to between 40 to 50 percent. ... It's kind of like the IT industry's dirty little secret."
Not only does tape fail, Cramer says, but its very physical presence means that should disaster strike there's the risk of it getting lost or damaged. InSync, however, sidesteps this problem through the use of two emerging industry movements: The price drop of disk-based backup, which hit the market about five years ago, and the increased availability of broadband to small- to mid-sized businesses. Cramer estimates that $100 million of the $3 billion data backup market involves disk-based technologies, a figure he expects to triple by next year.
Such an estimate, however, might be high, says Alenka Grealish, Celent banking team manager. "It's hard to make an economic argument-unless you're at a refresh point-to invest in changing your system," she says. "Certainly, contracts come up for renewal, and that's when companies consider jumping to the new technology. But the jumps rarely happen just because the technology exists."
Regardless, LiveVault touts InSync's high-tech infrastructure as a way "to make certain that something really complex is brain-dead simple," Cramer says. "If you can install Real Audio, you can install our software and have it configured and set up to protect the most complex server." Supported server platforms include Microsoft Windows, Linux and Unix, and InSync's technology features bi-directional authentication, AES encryption, digital certificates, compression, incremental backup and a system that moves only information that changes offsite, making data movement and bandwidth use more efficient. "It's also designed for the Internet, so if the interaction goes down, you can take the network plug out of your server, go get a cup of coffee, plug it in five minutes later, and it literally picks up at the byte that left off," Cramer says.
Approximately 15 percent of LiveVault's clients are in the financial industry, a vertical where both recovery point and time objectives are critical. St. Tammany Federal Credit Union, a Slidell, LA-based LiveVault customer with 4,000 members and $15 million in assets, knows this firsthand. As Katrina approached, St. Tammany CFO Glenda Rushe evacuated with a computer. She phoned in loan approvals from a Mississippi hotel room for a few days, then returned to the office and declared disaster. By the next morning, she says, LiveVault was on the line, walking her through the restoration process, and the credit union was in business within the hour. "I'm not technical. I can't tell you all of the jazz behind any of it," Rushe says. "I just know that it worked, and it was wonderful."
Grealish sees "major players" such as SunGard of Wayne, PA as LiveVault's chief competition, and says that while new technology may spur some companies to boost data recovery plans, 9/11 was the real impetus. "I think most have gotten a wake-up call," she says. "And banks, because they deal with mission-critical operations... can't be too sloppy."
Rushe, however, remains convinced that her decision to invest in InSync-which, at a starting price of $119 a month-was a wise one. "I think that people need to rethink their disaster recovery plans and go back and do a little bit of soul-searching when they start thinking about them, because we did our disaster recovery plan thinking that only we would be disabled," Rushe says. "But it was a good experience, and it's something I think that everybody should have to deal with once in their life, just so they'll know better next time."