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Banks as backup providers? It's worth a shot

Storage service provider AmeriVault is trying a new channel for its online backup and recovery services: a bank.

During the dot-com boom, storage service providers (SSPs) were riding high, only to sink a couple of years later. But some SSPs have stayed the course, and now they're investigating new ways to sell their services.

AmeriVault, one such SSP, is trying out a novel new channel for its services: a bank. The company has joined with Cleveland-based KeyBank to offer online backup and disaster recovery services to the bank's small and medium-sized business customers.

KeyBank is a unit of KeyCorp, one of the nation's largest bank-based financial services companies. KeyCorp.'s companies provide investment management, retail and commercial banking, consumer finance services, and investment banking products and services. These companies serve both individuals and companies.

AmeriVault's data recovery and backup service automatically recognizes block changes within files, then encrypts the compressed data before pushing it via the Internet to secure storage vaults. AmeriVault runs its online storage vaults on approximately 25 TBs of Clariion storage, recently purchased from EMC Corp. The AmeriVault-KeyBank alliance, while a relatively small deal in the bigger picture of the storage market, has piqued the interest of several industry experts.

The question is: Can a bank sell storage services? KeyBank is counting on statistics to sell its customers on the idea. According to the Bureau of Labor Statistics, 93% of all companies that experience a significant data loss are out of business within five years.

"Considering [that] a number of [small and medium-sized] businesses have gone out of business due to significant data loss, this offering seems like a natural extension to their business," said Steve Kenniston, an analyst with Enterprise Storage Group. "The tough thing is, this business is much like the storage service provider business of the dot-com boom. While I do believe that this market is making a comeback and will come back with backup and recovery, disaster recovery and business continuity services first, businesses have to be careful in planning how they build out their practices and to learn from the issues and mistakes from the boom era."

Added David Hill, vice president of storage research for Boston-based Aberdeen Group Inc.: "Banks not only have very large customers, but a lot of customers in the [small and medium-sized business] space. Banks have two interests. One is that they want to protect the money that they have lent to these customers. The second is that they want to develop new opportunities for making money. Offering server backup and disaster recovery therefore makes a lot of sense.

"If customers protect their data better, then the risk of financial loss to both the customer and the bank is less," he added. "Moreover, the customers may not know how or where to turn for the proper levels of data protection so the bank can help them with this process and give a seal of approval to using the AmeriVault product."

KeyBank is targeting small businesses that lack IT staff and resources. AmeriVault's online backup service is available to KeyBank customers as a part of the bank's existing KeyGuide suite of e-business products. The KeyGuide suite includes electronic invoice presentment and payment (EIPP), enterprise resource planning (ERP) and document management services. AmeriVault offers automated, online backup and recovery services for business data and has strategic partnerships with Agility Recovery Solutions, Hewlett-Packard Co. and SunGard Availability Services.

KeyBank spokeswoman Katherine Farrell Reidy said, "We're not pretending to be mass-storage experts. We take our [users] to the point of identifying their backup and disaster recovery needs and then hand them off to AmeriVault."

For more information

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AmeriVault uses EMC gear to offer outsourced DR

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