As data and legal regulations proliferate, often in seemingly equal amounts, across every industry, some companies, particularly smaller firms, are finding that the best way to manage the sprawl is to hand the reins to someone else. And though industry experts say it remains unclear just where the backup outsourcing market is headed in general, the users who have chosen it say they swear by it.
According to Thomas Trillo, chief operating officer for Ridgefield Capital, a hedge fund that registered with the Securities and Exchange Commission (SEC) under the Investment Advisor's Act of 1940 after new guidelines went into effect in February (see Hedge funds snub SEC email archiving rule ) his firm soon found itself overwhelmed by compliance requirements for its data.
"When we chose to become a registered investment advisor, we found that the SEC required us to be much more diligent about backup and disaster recovery," Trillo said, whose duties with his firm also put him in charge of marketing, investor relations and human resources, as well as systems and technology administration. "Managing that to the SEC's satisfaction would be a full-time job for someone like myself, and I'm already a jack-of-all trades guy."
Ridgefield Capital explored several options for outsourcing firms, finally going with Eze Castle Integration, which specializes in off-site backup and disaster recovery for the financial market. Another appeal to Eze Castle besides its expertise in Ridgefield's particular industry, Trillo said, was the size of the company. Eze Castle has over 260 clients, according to its Web site and has locations in Boston, New York, London, San Francisco and Stanford, Conn.
Ridgefield Capital stores 150 GB of data offsite with Eze Castle's data center in Boston; the company also outsources management of its entire IT infrastructure, including hardware and software purchases, to Eze Castle as well.
"Some people look at outsourcing as a risk because you're putting all your eggs in one basket, but we felt it was prudent to have one service provider for the sake of convenience and cost management," Trillo said.
But, he said, "The bottom line is that as a hedge fund, our focus is trading and investing. Eze Castle has IT expertise we never will, and we also benefit from their economies of scale when it comes [to] doing hardware and software purchases through them."
Data growth and lost laptops: Two more reasons to outsource
For organizations both large and small, sheer data growth and the burgeoning amount of data kept on devices, such as laptops, are the other main factors that makes outsourcing backups a more appealing option.
For small companies like North Carolina-based Strahan Associates Architects, outsourcing backup has become the only viable option when the growth of critical data has come up against a lack of internal IT resources.
"We have seven people in our office total, and I'm the de facto IT guy," said Strahan engineer Chuck Ladd. Previously, Strahan had been sending critical data to a removable Integrated Drive Electronics (IDE) disk that plugged into a Windows 2000 server. That data was only up to 41 GB in incremental backups a day, but as more and more architectural data that previously had been kept on paper, such as computer-aided design (CAD) drawings, are put onto electronic storage, that amount was only growing, Ladd said.
"And even if we don't have a lot of data, our critical data is crucial," Ladd said. "We absolutely can't operate for a minute without it."
It had formerly been Ladd's responsibility to shut the server down, remove the disk and take the disk to a safe-deposit box every week.
"Murphy's Law says that if we have a failure, it's going to happen on a Thursday because that's the day before I usually swap the disk out," Ladd said. "We realized we just couldn't rely on swapping out that disk anymore."
This past January, Strahan Associates decided to outsource its backup with Arsenal Digital Solutions Inc.'s ViaRemote service, which pulls data offsite through the firm's cable modem and stores it at a data center in Raleigh, N.C.
Ladd said he estimates the outsourced backup service saves the firm $600 per month on the labor time it saves him alone, as well as the downtime required to shut down the company's server and swap out the removable disk.
"That's more than it costs us per month for the service," said Ladd. "So it took us literally no time to recover the cost."
Click here for page 2, Midsized companies reach out for backup help.