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Click Here to view a print version of this pageUnlocking The Data Vault
By Kevin Ferguson

Forbes.com - When it comes to safeguarding their precious data, corporate notebook users are more likely to shove their valuables under the mattress of their hard drive than lock them away in a secure data vault.

The smart money says that this practice will change dramatically over the next three years, as businesses begin to realize that as much as 70% of their day-to-day information--things like sales orders and contact managers--resides not in any central server but on their remote computers. And until they do, many companies will leave themselves exposed for at least 24 hours at a time, waiting for data uploads from employees in the field.

So-called "data vaulting," the online backup of encrypted data over the Internet or private networks, has been proffered by some software suppliers as the best security device since the padlock. But is it the key? Fewer than 5% of 30 million remote computer users now think so, choosing instead to back up their data on removable Zip drives, magnetic tape, floppies or nothing at all, several industry analysts agree. That attitude had better change.

What will change notebook users' minds? "Maybe when they lose their laptop," says Glenn Gaudet, director of product marketing for Connected Corp, a Framingham, Mass.-based supplier of backup software. "It's not like losing your wallet. When you lose your wallet, you can call the credit card companies. When you lose your laptop with everything on the hard drive, whom are you going to call?"

"It's not like losing your wallet. When you lose your laptop with everything on the hard drive, whom are you going to call?"

Other users may refuse to use online backup until Internet security is improved--an excuse dismissed out-of-hand by data vaulting customers. "Connected already uses 64-bit encryption," says Jay Corinha, director of IT business planning at GTE Internetworking, a division of GTE Corp. (GTE). "We have the U.S. Treasury Department's web site here, for goodness sake. Do you think we'd take chances?"

For most corporate workers, it may not be a matter of being unconvinced but uninformed. Typically, businesses focus only on backing up their central file servers, ignoring their remote users altogether. Even when an IT department bothers to enact policies for remote users, those policies are seldom enforced.

"There's an exposure that corporations have," concludes Mark Nicolette, research director at Gartner Group, Stamford, Conn. "The vast majority of corporations feel they are covered because they tell their users to put critical data on the file server. But users can't follow policy."

When remote users do back up their data, they are usually "doing it on their own, rather than because of any corporate dictum," says Jack Gold, an analyst with Meta Group, a consulting firm, in Westboro, Mass. "What scares me is how much data resides on these PCs. There's a huge liability. That's real dollars."

Some companies, such as enterprise-software maker PeopleSoft (PSFT), have chosen not to gamble that money. "Our problem is we're 95% mobile," says Diane Wimmer, manager of user support services at PeopleSoft, the $1.3 billion software vendor based in Pleasanton, Calif. "Our people are moving around now with four gigabyte to six gigabyte drives. There's a huge need for backup."

With 5,700 mobile employees, PeopleSoft's data exposure was great. So it signed on with Connected. Unlike most Connected customers, PeopleSoft was still not convinced that sending its information over the Internet was the way to go, and chose instead to run Connected's software over a private network.

Despite the projected growth of the data vaulting industry--from less than $50 million this year to as much as $500 million by late 2002, according to Meta Group--most corporations don't entrust their valuable data to outsiders. Toshiba America, which launched a beta version of its online backup service for laptop users in mid-1997, has fewer than 1,000 corporate users, according to Dan Ludwick, director of services marketing. "It's a small number compared with our installed base," he acknowledges. Toshiba America recently shipped its 5 millionth notebook PC from its factory in Irvine, Calif.

Just the same, Toshiba America is building on its relationship with San Diego, Calif.-based online services provider AtBackup to increase both its corporate and consumer presence. Several weeks ago Toshiba began giving its online backup offering marquis exposure on the front page of its web site.

To encourage online backup, service providers know they must automate the backup procedure as much as possible. In most cases, this means placing an "agent" on the user's computer that detects any changes made to the hard drive. Whenever the user goes online, say, to send E-mail, the hard drive silently sends the latest changes to an offsite computer for backup. If, for example, a user were to back up a spreadsheet at noon and later change 12 cells, only those 12 cells would be updated when he or she went online again. Furthermore, the changed data are typically compressed before the user goes online, to minimize transmission time.

The ability to compress data offline and use such "agents" speeds the backup process noticeably. "Then again, if you create a new PowerPoint [presentation], you've changed a lot of data. So, it's hard to escape [slowed transmission times]," notes Gartner Group's Nicolette. Yet, online backup remains an effective, essential tool, says GTE Internetworking's Corinha. "At 4:41 this morning, [my system started backing] up 5.5 megabytes from a total file size of 65.6 megabytes. It finished in 10 minutes. That's not bad."

Despite its strength as a top Internet Service Provider (ISP), GTE Internetworking previously took a decidedly low technology approach to backing up the data on the company's 2,000 remote hard drives. That changed with the implementation of its "swamp drain" project.

"We had 120 guys collecting data from our [branch locations]," recalls Corinha. "We found there was too much information left on the laptops. Users were keeping too much information locally. We had to find a way to protect that intellectual property. Now, if Billy Bob is on the road and gets run over by a beer truck, we can still get his data even if he's holding on to his laptop."

"If Billy Bob is on the road and gets run over by a beer truck, we can still get his data even if he's holding on to his laptop."

For GTE Internetworking, the answer was also using Connected's online backup service, known as Connected Online Backup. Considering that 70% of its workers used laptops and that the company adopted a "never-close" philosophy, GTE Internetworking needed to do something, he explains. The ISP had considered supplying its corporate workers with Zip drives but decided few employees would bother to back up their data. It also considered using backup software products from Legato Systems (LGTO), but at the time those solutions didn't have a remote client that compressed and encrypted data, says Corinha.

Not wanting to miss similar opportunities, Legato late last year launched its NetWorker Remote data vaulting product. Legato, a $143 million enterprise software vendor based in Palo Alto, Calif., launched the service as an extension of an earlier technology agreement with Stac Inc.(STAC).

Other customers and other suppliers continue to pour in. "We're riding the crest of a tidal wave," proclaims John Amann, IBM's global services manager for PC data vaulting. "The opportunity will grow in double digits over the next three years." IBM's Business Recovery Services, one of the world's three largest disaster recovery firms, began selling Connected's technology under the IBM brand name last April.

Ironically, while it was consumers, not businesses, that made the Internet a success, Connected failed to make much of its consumer offering. Founded just over two years ago, Connected now generates 90% or more of its $4 million annual revenue from corporate accounts.

"Over 70% of our customers are corporate mobile users. We expect they'll be making a lot of requests for this," says Charles Tebele, chairman of RCS Computer Experience, a six-store New York retailer. "It's the ideal method of backup."