More U.K. companies storing data in the U.S

Many don’t realize that online back-up companies’ services can be utilized from other countries, and that doing so may save time and money. There are several key reasons for this trend:

1) Data center density laws in the U.K., which are not in place in the U.S., allow data centers in the U.S. to provide more power per server cabinet. This is more convenient for online backup resellers, giving them relatively limitless storage. U.S. data centers are able to provide five times the amount of power and five times the amount of storage per cabinet compared to data centers in the U.K. By being able to condense the data centers and use less real estate space, online backup companies in the U.S. are able to offer their services at a much lower price.

2) The currency exchange rate is presently in the U.K.’s favor. One U.S. dollar equals .61 British pounds – meaning that anyone living in the United Kingdom will pay £12 for every $20.

3) Although it may seem like the U.K. is a great distance from the U.S., in reality the countries are only a few fiber hops away in the electronic world. The ping time/latency from the U.S. to the U.K. shows relatively no speed difference than if the backup company were in the same country.  

Almost half of XZ Backup’s customer base is international, with a substantial presence in the U.K. XZ even provides its customers with a technical support/service phone number for London, so that the company is more easily accessible for both users and resellers in the U.K.

Iron Mountain’s online backup services are up for sale – who’s looking to buy?

Information management company, Iron Mountain, is reevaluating its digital business services by eliminating digital archiving, online backup and recovery solutions. The billion-dollar company’s strategic plan is to ‘enhance stockholder value’ by only remaining in the market where they have a leadership position to increase ROIC for stockholders.

Reasons for shedding themselves of their online backup services range from ‘modest levels of adoption’ of the services by customers, to not wanting to compete with the big dogs of storage, such as Amazon’s Simple Storage Service (S3) or Jungle Disk.

Iron Mountain’s CEO, Richard Reese, also mentioned the possibility of partnerships to continue to offer customers remote backup along with other information management systems. Reese said they are also considering repositioning themselves as a reseller - comparable to XZ Backup’s business model.

Iron Mountain joined the online backup world not too long ago in 2009 with Virtual File Store (VFS), a cloud-based storage system and shortly after introduced the Archive Service Platform (ASP), allowing users to integrate the cloud storage in its back end. Current users of VFS are invited to transfer to a higher value File System Archiving (FSA) by next year; however users of ASP will be required to move to a different service provider.

In consideration since fall of 2010, Iron Mountain’s restructuring gives other online backup companies an opportunity to position themselves favorably in the market. White label online backup providers such as XZ Backup, can leverage storage growth trends along with market restructuring and gain a new audience of online backup resellers.

Electronic data laws create a need for online backup

XZ Backup's customer base in the U.S. vs. foreign countries

Online backup companies are seeing storage growth trends not only because of the exponential increase in electronic data, but also because of electronic data laws. White label online backup companies provide an easy way for businesses to comply with the federal regulations of keeping data available, easily accessible, transparent and auditable.

Here’s a super-brief history lesson on data retention: Government requirements to retain data started in 1966 (before cell phones, iPads and even desktop computers) with the Freedom of Information Act (FOIA), which is still enforced today. The FOIA mandates that the federal government allow public access to its records with written request, unless the requested information falls under one of the nine exemptions.

You can imagine the amount of data the U.S. Government creates every day and how necessary remote online backup is for it to function and comply with the FOIA. In 2010 alone, the government received 597,415 requests for information.

More recently, the U.S. enacted the Sarbanes-Oxley Act of 2002, which requires all public companies to archive all electronic business records and communications to create transparent and auditable data and prevent corporate scandals.

The U.S. is certainly not the only country with electronic data laws; the UK, for one, has strict regulations in place. Although the majority of XZ Backup’s online backup resellers are based in the U.S. (56 percent), almost half of XZ’s clients are based in foreign markets (44 percent), many of which utilize XZ’s services in order for their clients to comply with data retention laws.

The UK’s extensive electronic data laws include requiring all emails sent by financial institutions be saved for at least six years, wages and salary information be saved for at least six years, and financial promotion information regarding pensions be saved indefinitely.

Convincing your clients to take advantage of remote online backup should be pretty easy once they realize all the federal rules and regulations required for financial and government institutions and publicly traded companies.

WSJ: Information Technology Industry Spending Soars

Tech earnings have been rolling in the past few months and things are looking good. On track for growth, leaders in the IT space are on the move, ordering servers, processors and networking equipment to support the worldwide demand for information and expansion of the Digital Universe. Rackspace Hosting is building out, the Planet is adding machines, Intel server chip revenue up 46%, IBM server sales up 30% and Google reporting $476 million in CAPEX. Also cloud computing looks to be defining this sector in the move toward Warehouse-Scale Machines. Manuel D. Medina of Terremark refers to what we’re seeing as a “major tectonic movement.”

There’s still some distance to go, as mobile matures and more meta-apps begin to sift through the explosion of data points currently being uploaded to the cloud, there will be even more pressure on the demand side for elastic infrastructure which can scale all these new services emerging from the fray. Check out the article.

Spending Soars on Internet’s Plumbing

By DON CLARK And BEN WORTHEN

Behind the recovery in business spending is a surge in purchases of the computers that form the backbone of the Internet, as companies scramble to meet growing demand for video and other Web-based services.

The need to reach customers and employees over the Web is driving furious demand for server systems, the machines that power corporate computer rooms.

Many companies are stocking up on new servers, which typically cost a few thousand dollars apiece, to replace older machines with more energy efficient models or systems with more powerful processors.

Also, an increasing number of businesses are turning to outsourcing companies, which manage computer rooms for customers and in many cases are sharply stepping up purchases of servers to keep up with rising demand.

We’ve been buying thousands of computers this year,” says Doug Erwin, chief executive of ThePlanet.com Internet Services Inc., a Houston-based company that runs data centers to offer computing services. ThePlanet says it now owns about 50,000 Dell Inc. servers.

International Business Machines Corp., one of the biggest vendors of servers, said Tuesday that sales of industry-standard servers jumped 30% in the second quarter, after rising 36% in the first quarter.

The buying activity became apparent last week, when Intel Corp. said quarterly revenue from its unit selling server chips rose 42% from a year earlier, while shipments driven by Internet-related companies’ purchases nearly tripled.

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Global Tech Recovery Will Drive US IT Market Growth Of 6.6% And 8.2% Globally (In Dollars) In 2010

With 713M in Market cap, Forrester Research has a decent reputation for accurate market analysis. Today we have a blog post from one of their Vendor Strategy Professionals, Andre Bartels, about the recovery story for the IT Market in the United States, and globally. There are 3 main points to keep in mind, first, we will see a modest recovery in the developed nations; second, a cheap dollar aiding global growth; and third, a new innovation cycle for the tech market.

Global Tech Recovery Will Drive US IT Market Growth Of 6.6% And 8.2% Globally (In Dollars) In 2010

Posted by Andrew Bartels

2009 was a miserable year for tech vendors, especially for sellers of capital equipment like PCs, servers, routers, and licensed software, and for systems integrators who helped implement that software.   2010 will be a much better year, especially for these very same vendors.   We’re not talking boom yet, so we are not predicting double-digit growth rates across the tech market (though some categories will see those kinds of growth).  But, as our latest tech market report shows (http://www.forrester.com/rb/Research/us_and_global_it_market_outlook_q4/q/id/53384/t/2), we do think there will be a solid tech recovery in 2010, with growth rates in the high single digits.

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