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How Dealers Can Use Data Backup to Develop a New Profit Center

25 May, 2004

How Dealers Can Use Data Backup to Develop a New Profit Center

By Kelly Williams, NovaStor Corporation

In the office equipment industry there are multiple tiers of dealers fighting for the same customer base. These include giants such as Staples, Office Depot and OfficeMax as well as smaller regional and local dealers.

In this competitive jungle, brand loyalty means little. Whenever a dealer offers a new service that customers perceive as a better value, they will switch.

The cash-rich giants can add new fee-based services because huge customer bases allow them to absorb what to them may be a small loss as part of the cost of doing business. Large regional or local dealers may also be able to absorb such losses.

Smaller Tier 2 or Tier 3 copier and printer dealers are caught in a Catch-22 situation. Increasingly they must add services to attract and maintain customers, but they can’t afford to absorb the costs of these new services and still remain competitive. Either they have to raise their monthly fees, charge for the new services, or face the possibility of being driven out of business. If this describes you, what can you do?

There exists an opportunity for you to offer a premium service that can increase revenues from current customers, attract new ones and offer a rapid ROI that adds to your cash flow and profitability. The opportunity: offering customers automatic, remote data backup over the Internet as a premium service.

The Growing Need for Data Backup

For many companies, data is becoming the most important asset. Businesses develop large databases of clients and prospects, transactions, records (legal, medical, etc.), warehouse and inventory control. Much of this data is impossible to replace or to reconstruct if lost.

What effect does losing data have on a company? According to a recent study by the National Archives and Records Administration, only 43 percent of businesses suffering a disaster ever recover sufficiently enough to resume business. In addition, 93 percent of businesses that lose data for 10 days or more file for bankruptcy within one year.

What’s truly frightening is that data is so easy to lose. A natural disaster like a hurricane, flood or wildfire can destroy a company’s records. A sudden loss of power, a hard disk crash, a malicious hacker or even a disgruntled employee can wipe out critical data. Even simple human error can be ruinous. According to one study, some 4,000 notebook computers are left in London cabs in any given month.

Another powerful impetus for backing up data is the growing list of laws, regulations and industry rules that require firms to securely archive files for specific periods of time. Such files include legal papers, medical records, tax data and even email. Loss of this data can lead to fines, sanctions or even business shut-down.

A third consideration is the growing number of mobile workers and telecommuters who have created a greater demand for regular data backups as well as access to data stored on network servers. On a more personal level, the explosion of digital media has created an ever increasing demand from end users to protect and preserve their critical, private and personal data (such as photos) against loss.

You would imagine that these pressures would ensure that everyone backed up data, but you would be wrong. IDC statistics from June 2002 indicate that 99 percent of all corporate PCs—both desktops and laptops—are not backed up in any form. This can spell disaster for them and opportunity for you.

The Demand Exists

By offering remote, automatic data backup over the Internet, you can better serve current customers and keep them from jumping to a competitor. You can attract new customers (both newbies and competitors’). And you can create a new profit center that helps your bottom line.

To be successful you must offer customers an easy-to-use backup system that they can basically set and forget. As a copier or printer dealer you may already have the vital Internet infrastructure. What you need to add is a software solution, secure servers and customer service.

The Software Solution

To meet the demand for data backup, companies have developed Internet-based backup software. Such software takes daily snapshots of critical data to protect networked, remote and disconnected subscribers. It minimizes lost productivity as people waste valuable time looking to replace lost data. And it promotes business continuity when the inevitable disaster occurs.

Software backup solutions are based on server-client architecture and require software residing on your servers as well as downloadable modules that reside on subscribers’ computers.

On the server side, backup software should: offer fast, reliable and cost-effective backups over any TCP/IP connection—including broadband and dial-up; allow you to easily add, remove or modify subscribers; enforce storage quota limits (especially important when you’re selling backup storage space on your servers); support multiple user authentication techniques; provide secure encryption algorithms and compression ratios for fast, totally secure backups; offer binary patching—updating files in small patches that only contain data not found in older files; and configure instant notification of errors and warnings, including e-mail notification, so you can fix problems quickly.

On the client side, backup software should: download quickly and easily; include some kind of installation wizard to make it easy for subscribers to begin backing up files immediately; work in the background, so it’s invisible to the subscriber; support both broadband and dial-up; include a firewall for added security against intruders; permit customization that allows subscribers to create their own backup schedules (hourly, daily, weekly, etc.); and support multiple languages.

Backup Servers

Depending on the size of your operation, data storage can range from a single server in your office to a co-hosted server offsite to your own data center. Ideally, your server will be in a secure location that can withstand natural disasters, hackers, power outages and other hazards. For many smaller operations, a co-hosted solution in which you lease space in a secure data center may be most cost effective. Such data centers are normally located in special rooms that are protected against natural disasters like fires and earthquakes, hackers and thieves. They offer the advantages of a data center at a fraction of the cost. They also offer compliance with laws and regulations that require companies to keep data in a secure offsite location.

Customer Service

If something goes wrong, your customers will come to you to resolve problems, not the software developer, server manufacturer or data center. Therefore, when selecting these vendors, make sure their service representatives are highly responsive—because your reputation is riding on it.

Selling remote backup as a premium service

You would think that after hundreds of articles have appeared in every type of publication from local newspapers to highly vertical trade magazines to the Internet, computer users understand the importance of backing up their files. Unfortunately, as statistics demonstrate, this is not necessarily true. All too often the point is not driven home until users suffer a hard disk crash and lose all their data and discover it’s irretrievably lost.

When you decide to sell automated backup to your customers, a two-prong approach may work best. First, cite the statistics that appear in the beginning of this article as well as others you may glean from industry reports and your own reading. Second, emphasize how easy it is to back up data regularly using your premium service. After downloading and installing the software, customers can determine what should be backed up and how often. The rest should be automatic—a no-brainer.

Think of it as selling “survival insurance.”

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