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Data security
Security is still a showstopper for many companies exploring SaaS options. No matter how strong the encryption guarantees, or the type of encryption used, some potential customers simply won't be able to sleep at night knowing their data resides offsite at a location they don't own or manage, and that their data might be sitting beside some of their top competitors' data.

"It's still an objection," admits John Clancy, president at Iron Mountain Digital. "But it's much easier to overcome that objection than it has been in the past," he notes, adding that they use "the same level of encryption the federal government uses to wire funds."

Adam Couture, principal research analyst at Gartner, says industry veterans such as EMC and IBM are helping more customers rest easy when it comes to shipping data over the Internet to remote hosting facilities. "They won't send it to a Mozy, but they'll send it to an EMC Mozy," says Couture. "To me, that's the big difference--that the storage OEMs want to be service providers themselves."

Perimeter eSecurity isn't as well known in the online backup space as Seagate Technology's EVault or Iron Mountain, or even smaller competitors like Incentra Solutions Inc. or Intronis Technologies Inc., but Doug Howard, Perimeter eSecurity 's chief strategy officer, says they entered the space specifically to compete with companies

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for whom encryption isn't an everyday business.

"If you look at most of the online backup providers, they have an option for individual encryption on a key basis," he says. "We do a double key. It means that every encryption has two keys. You can choose to let some people have limited access to elements of information so you couldn't access all the text or Word docs, but you could see the headers or file names. That gives you some flexibility." Most SaaS vendors offer a customer the option of holding their own encryption key or putting it in escrow with the SaaS vendor.

James Cosgrove, founder and CEO of Seattle-based Computer Resource Corp. (CRC), chose the option of allowing Intronis Technologies to hold his encryption key. "The reason we don't manage the key is because if that one little key gets lost or misplaced, then I don't have that customer data," says Cosgrove. His clients are mostly dental offices in the Seattle area. Many were using Symantec's Backup Exec before they adopted an online strategy, he says. "They would say the tapes got dirty or the backups didn't run last night ... we were getting tired of these phone calls."

This was first published in August 2008

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