Firstly, I want to state upfront that I do not like to beat around the bush to gain some PR advantage. We have no interest in succeeding by hook or crook. We want to succeed by adding true value to our partners and customers and we expect our partners to also want to succeed by adding true value to their customers. I personally hate to make money from anyone who did not gain some value through our product and services. That is one reason I absolutely do not pitch our business to venture capitalists as I do not want to be obliged to investors and do things against my philosophy just to provide returns to them.

Let me first do a reality check on our current business model:

1. 95% of our revenues are generated by our close to 2000 partners. 90% to 95% of these partners are managed service providers who host StoreGrid in their data center infrastructure and offer a managed online backup service to their customers. Between 5% and 10% of our partners would be hosting providers who provide a backup service to their cloud hosting, managed hosting or co-location customers. I want to mention that in our current business model there is no commitment, in terms of meeting some sales targets, we expect from partners – they simply purchase licenses upfront and get a volume discount or purchase licenses as and when they add a customer to their managed backup service. We do not insist on any long term contract or anything. Our partners continue to stay with us because they see value in continuing with us and not because of any contractual obligations.

2. 80% of our partners service customers with less than 100 employees. Most of our partners act as the outsourced IT manager taking care of everything IT for their customers and most of these customers may not even have an internal IT person and fully trust the local MSP for their IT needs. It is also important to mention that we have no visibility into our partners’ customers. We do not even know who these customers are. In the last 4 years of us focusing on this business model, we have never had a situation of a customer of our partner contacting us to purchase our product directly from us. So there is no question of competing against our partners by undercutting them by directly selling to their end customers.

3. Our partners have anything between 10 and 500 customers spread equally across all sizes. 50% of our partners have converted less than 10% of their customers to StoreGrid based managed backup service and 26% say they have converted between 10% and 25% of their customers to StoreGrid based managed backup service. Though we are not exactly sure why our partners have not been able to convert more of their existing customers, I am sure our partners are doing their best to get them converted and it will just be matter of time majority of our partners’ customers are moved to StoreGrid.

4. 92% of our partners say StoreGrid as a product is either excellent or good. We have been adding several new features to the product and would continue to do so and improve the value we offer to our partners and their end customers. Hopefully, as StoreGrid evolves and matures, our partners would be able to convert more of their customers going forward.

5. On the quality of technical support too, we have been rated highly by our partners – the average rating being 4.3/5.0. I want to highlight that this is about the free technical support we provide to our partners as part of their subscription license fee we charge them. We do offer premium technical support with telephone support and guaranteed response times etc. No wonder the number of takers for that is rather small considering our basic free support is one of the best in the industry.

6. It has taken four years for us to get to 2000 partners. We have spent considerable amount of money and resources in acquiring these partners. Our success depends upon the ability of our existing partners to add more and more customers to their StoreGrid based managed backup service and our ability to add thousands of new partners every year.

We as a business have to keep looking for diversification into different market segments and drive growth with the aim for taking a leadership position in this data protection domain. Indeed we like our current business model of serving the small business customers through our dedicated channel partners. We will continue to invest and grow this market going forward. But as StoreGrid evolves, we believe we have a chance to position StoreGrid in the medium sized business segment. Most of our ongoing strategy is based on feedback from our existing partners/customers and also some of our prospective partners and customers. Let me talk about our immediate diversification strategies and why this is not a strategy to compete with our partners or sell directly to their customers.

Why Vembu Home Online Backup Service to Consumers

Consider the fact that we have signed up close to 2000 partners in the last 4 years and that all our active partners put together have converted possibly 30,000 or more business customers to their StoreGrid based managed online backup service. The two well-known current brand names in online backup domain, Mozy and Carbonite started off by targeting consumers and spent quite a bit of money in building a brand amongst consumers. It is a different matter that they may not be really viable, long term businesses trying to treat backup as a commodity for even business customers. But by lieu of building a brand amongst consumers they get lot more attention from the press, the bloggers and even amongst the MSPs than they deserve. That is the reality. We can only build a brand by focusing on the consumer market or by focusing on the large enterprises. It is not easy to build a brand by focusing on the SMB market that too through the channel. Why is a brand important to us? It is important because it will reduce the cost of acquiring a lead for us and it will also help us convert more of our leads into partners as it will give the prospective partners more confidence in partnering with a reasonably well known brand than dealing with what may be perceived as an obscure little company. It is a different matter that we feel we have a very good product backed up by a highly committed technical support. When it comes to signing up large number of customers or partners, a recognizable brand name definitely matters. By providing services to consumers we want to build a brand name in the cloud storage domain.

I see no reason why our MSP partners should feel threatened by our consumer focused initiative. By definition, MSPs focus on business customers who tend to outsource their IT as they see better value in an MSP managing their IT rather than themselves. The data I have provided about our partners establish that very clearly. Of course there are always some businesses which are confused. They may have some IT capability internally and they may look at the commodity storage services available and start comparing them with the MSP provided IT service. Either the MSP has to educate such customers about the value they bring to the table or just let the customer try the commodity service and figure it out for themselves. For the Vembu Partners, even if we do not provide a commodity online backup services to the consumers, these businesses are going to compare the MSP services with the other competitive consumer focused commodity services anyway. The business customer who is confused and does not see the value the local MSP bring to the table is anyway lost and there is no point in MSPs trying to win them over. If someone does not see the value it is better to not win them over as a customer as it will only result in unhappy customers because of mismatched expectations.

Also, our Vembu Home backup service license agreement clearly precludes businesses from using the service. Even those business users signing up as individual consumers would have anyway signed up with a competitor. Vembu, as a business, wants to win the mind share of such business users too. Once we win their mind share, there is a distinct possibility that they realize that commodity online services may not be all that perfect for businesses (as they are for consumers). And they may be more willing to see the value the local MSP bring to the table. When that happens we surely want to provide those businesses as a lead to our MSP partners. The modalities of how that will happen have to be worked out. We need to start somewhere and hopefully it will all work out as we plan.

Of course, there are some MSP partners who claim they also want to go after the consumer market. The same logic as business customers applies here too. If there really is a consumer need which the MSP tries to fulfill and the consumer sees value, it is fine. But if the consumer does not see the value the MSP offers, then she is anyway going to go with a commodity service. Why cannot it be Vembu? Why should Vembu give up serving that consumer and win their mind share if it can help us in some intangible way. That is what we think. Majority of our MSP partners focus on business customers. We do not believe it is possible for the MSPs to easily offer a commodity service to consumers. If they want to do that they have to become SaaS vendors themselves by creating and owning the core IP etc. This is the reality we believe in and we need to follow a strategy based on what we believe in. Commodity consumer offering will always be part of a larger offering as it is impossible to sustain a business by only offering commodity services to consumers. It is always offered with a larger strategic goal in mind. If some MSPs want to also offer commodity services to consumers they cannot do that simply by licensing the IP for the core services from a vendor. They have to own the IP themselves and in that case they are no longer an MSP.

Why Vembu Pro Online Backup Services

Since the time we released our StoreGrid Service Provider Edition for MSPs, we have always had prospective partners express interest in reselling a managed backup service hosted by Vembu rather than hosting it themselves and managing them. As a vendor we initially decided to be a pure software vendor as we did not want to invest in building our own data center and the associated NOC. We have always been quick to offer options to our partners including having the ability to host StoreGrid in “Infrastructure as a Cloud Service” like Amazon Web Services. Now that we have enough experience in working with cloud computing services like Amazon Web Services we believe we now are in a position to host StoreGrid in Amazon Web Services and offer business an online backup service. The Vembu Pro online backup service will be offered exclusively through the channel. That means it is just an extension to our current business model where we license StoreGrid to our MSP partners for them to host and provide a service. Even our existing MSP partners have a choice now. They can offer options to their customers where in the backup is done to their data center or if the customer chooses the backup can be done to the Amazon Cloud. We probably are the first serious vendor focused on the channel providing such a capability. Backing up to the Amazon Cloud, specifically the S3 infrastructure, can be such a compelling selling point to the MSPs. At least that is what we are hoping for.

As I said, Vembu Pro will be offered exclusively through the channel. And we are also putting together an SMB lead generation program through which we want to provide SMBs interested in backing up to the Amazon Web Services as leads to our partners. These are in early stages but it is just a matter of time before all these things come together. And believe me when I say Vembu Home for consumers is an important component of this whole strategy and it is not meant to compete with our partners by undercutting them.

What about StoreGrid Professional Edition – the on-premise or branch office backup solution?

Until now we have never had to face a question about our StoreGrid Professional Edition. It has been there even before the release of our Service Provider Edition. So far, we never actively marketed it. But we do get sales from businesses that is looking for a self managed on-premise backup solution or other larger businesses for consolidating their branch office backups to a centralized data center. Though there are direct sales from businesses we also have about 50 resellers actively reselling the StoreGrid Professional Edition. We have a Channel program for that too and a few of our MSP partners also resell StoreGrid Professional Edition apart from offering an online backups service to their customers. We never really paid much attention to selling the StoreGrid Professional Edition and whatever has been happening is on its own. We are evolving StoreGrid Professional Edition recently and we believe it is just a matter of time before we are in a position to take on the likes of Symantec Backup Exec – by offering compelling features at 1/5th or 1/10th the price. We will then actively seek resellers to push StoreGrid Professional Edition to customers who want to stick to on-premise backups. As I said we do have a channel program already in place which can be fine tuned and evolved based on market requirements. Here again our main strategy is to involve the channel wherever it makes sense. But there are these occasional online sales which happen across the world on its own. If ever such a sale happens because of some effort from our channel partner we will surely compensate them for that. And this is the type of guarantee I can provide the channel as of now. We will also be seriously looking at some kind of customer registration program wherein a channel partner can register a customer with us and we then make sure any direct communication from the customer is always routed through the channel partner. We do have such a program in a small scale in India with a reseller.

I sincerely hope this long post is treated as an honest effort from our side to dispel any doubts in the minds of our partners about our ongoing strategy. I am sure there are some of our partners who are not going to be entirely happy. To them I want to say that we are as open and transparent as it can get. We say things as they are however uncomfortable the facts are. End of the day, our long term success can only be guaranteed only if we can continuously provide value to the end customers. Any strategy which revolves around an assumption of customer ignorance cannot last long and as a company we are uncomfortable in forging any strategy based on an assumption of customer ignorance.

I am open to honest feedback and suggestions based on market reality where the internet and the social media have turned all the existing business models upside down.

The above post was written by Sekar Vembu of Vembu Technologies. Vembu Technologies is a backup software vendor whose product, StoreGrid, powers the online backup services of a large number of service providers across the globe. Besides remote backup, StoreGrid is also used for on premise backups of workstations and servers at various companies & universities.

“I don’t want to sound arrogant. It is not lack of time. I am pretty jobless trying to figure out ways to scale our company trying various new things. The problem is the serious lack of interest in pitching my company to investors. I have spoken to so many VCs on the phone. It’s always the same. I refuse to do a business plan projecting how we can scale. It is like an experiment we are running and it is against my personal nature to pitch my plans to investors – just to raise money – as something that will work without fail. VCs don’t understand my perspective and I can’t blame them as they have to justify their investments to their LPs. I cannot change my nature and personality just to raise money.  If anyone is interested in my company I prefer a one on one meeting. But I insist that I will not give a business plan nor I will pitch my company to raise money. The investment has to come because they instinctively trust me and have a somewhat religious belief that I will at least give their money back if not grow it by 10 times. That is the understanding with which our angel investors have invested in us, by the way. One of them is a VC and he thinks personally he has no problem with my style but as a VC he cannot convince his other partners. My yard stick for success is different from the pure professional investors.”

The above post was written by Sekar Vembu of Vembu Technologies. Vembu Technologies is a backup software vendor whose product, StoreGrid, powers the online backup services of a large number of service providers across the globe. Besides remote backup, StoreGrid is also used for on premise backups of workstations and servers at various companies & universities.

Here is the link to my interview: http://desistartups.wordpress.com/2007/12/19/interview-with-vembu-by-prabhu/

To quote myself from the interview:

“The truth is that I am not really an early adopter of anything….. Also, I would like to call myself more of an incremental innovator with a lot of common sense. So I am not sure if I can come up with a completely new world-changing idea or something like that…..I felt I could really contribute with my incrementally innovative ideas and…I felt I could get a product out and start generating revenues to support a boot-strapping model”.

To quote Joe Panettieri from the MSPmentor article:

“Throwing money at problems often isn’t the solution. True innovation — from large, nimble companies and small, hungry start-ups — will pull the US and other countries out of this economic mess. Led by innovators, the turnaround is coming. I just wish I knew when.”

And I had commented the following in response to Joe Panettieri:

“Considering all the excesses in the US economy driven by foreign debt in the last decade or so and considering all the excesses in the form of bailouts after bailouts, the only way for the US to come out of this crisis intact and as strong as ever is through some breakthrough inventions or innovations. One should not forget US achieved its status as a superpower through this process of innovation in the last century.

These innovations have to come from some field which will fundamentally improve human productivity by leaps and bounds. If US fails to deliver on this front in the next decade or so, then it is inevitable that the next generation of Americans will pay a heavy price for the excesses of this generation.

It is worth remembering the fundamental law of economics that “there is no such thing as a free lunch”.

“I want to clarify something about my previous comment so that there is no scope for misinterpretation. When I said US has to deliver on some breakthrough innovation, I actually mean that such innovations have to come from individual initiatives from people like us – who are pushed against the wall. I did not mean that it has to come from some centralized government initiative through some mega-government planning. I thought it is important to clarify this as these days lots of very smart people have started thinking as if the government has to do something.”

“If at all some true innovation happens because of a government initiative it will be more of an accident. True innovations happen through the efforts of millions of individuals – who innovate either in order to survive or because of some innate human curiosity. All that the government has to do is to step out of way and make sure these individuals have the fullest freedom to pursue their dreams and also not interfere in the way these true innovators are rewarded for their efforts.”

I am writing about this in my blog here to drive home the point that no individual starts with a world changing idea or world changing ideas do not present themselves to some gifted individuals. You always start with something which appear small and trivial. But when millions of individuals try millions of small and trivial innovations there is that one fundamental world changing idea that would emerge. And that one innovation would impact the whole of humanity for the better.

So all of us who are wondering about how we are going to get through this impending economic calamity, the time to take charge of our lives is now. Just take the plunge and contribute with your innovation however trivial it appears to be.

The above post was written by Sekar Vembu of Vembu Technologies. Vembu Technologies is a backup software vendor whose product, StoreGrid, powers the online backup services of a large number of service providers across the globe. Besides remote backup, StoreGrid is also used for on premise backups of workstations and servers at various companies & universities.

Hope these are not perceived as just wishful thinking on my part. My comments are based on our experience supporting more than 1000 partners offering backup services to tens of thousands of SMB customers. Below is my unedited comment I sent to ChannelWeb.

On HP’s decisions to kill its Upline online storage service we are not very surprised by the decision. The reason is that we always believed that backup is not like Skype where you install it and it works. Backups by its very nature require monitoring, management and administration to ensure everything goes smoothly. So any large vendor who gets into online backup services thinking that you just sign up large number of customers and then everything can be put on auto-pilot is completely mistaken. That is the reason we never offered online backup services directly to end customers. Our business model is to partner with MSPs and VARs who already provide IT services to their SMB customers. These local MSPs and VARs, because of their proximity to their customers, are in the best position to offer backup services. Since they act as “Virtual CIOs” to their SMB clients they are in the best position to monitor and manage the backups along with everything related to IT in these SMB organizations.

With regard to consumers who backup to a brand name mega online backup service providers, we do not think that is a very profitable business because consumers view storage as a commodity. They do not appreciate the additional value delivered by good backup software and treat everything as just raw storage. Since backup requires monitoring and management the more consumers you sign up the more support you will have to deal with. This just cannot be sustained as consumers are willing to pay for only raw storage and not for the value the software brings. This is one reason HP would have felt it’s not worth their while to go after consumers nor after SMBs where it just cannot be put on auto-pilot. No wonder AOL shut down their XDrive business a few months ago.

Considering the above I strongly believe Carbonite may be under pressure notwithstanding the twenty plus million venture capital they have raised. With the meager amount they charge their customers for storage it is just not sustainable as the cost of offering good customer support can never be recovered.  Needless to say, in spite of Mozy’s brand recognition and EMC’s backing, Mozy may also struggle to scale their business profitably. It may be relevant to point out the blog post, “May be I am not so impressed with EMC“, which I wrote on EMC’s decision to spin off Mozy (Decho).

I also want to highlight another blog post by my colleague, Lux, some time ago: Carbonite and Mozy’s Achilles Heel.

The above post was written by Sekar Vembu of Vembu Technologies. Vembu Technologies is a backup software vendor whose product, StoreGrid, powers the online backup services of a large number of service providers across the globe. Besides remote backup, StoreGrid is also used for on premise backups of workstations and servers at various companies & universities.

I am actually quite surprised by the hype around deduplication and the adoption it seems to have gained in the enterprise. The reason I am surprised is similar to the one I articulated in my previous blog post: “Synthetic Full Backup in the online backup world – Are we inviting trouble?“. The crux of my argument is that backup and archiving is about building redundancy to the data and not about eliminating redundancy in the name of efficiency of storage or network bandwidth. So it is my contention that wherever feasible we should have as much redundancy to the data (that needs backing up) and only under unavoidable circumstances should we resort to using synthetic full backup or deduplication. Actually, let me state this more strongly: “avoid falling for the synthetic full backup or deduplication hype if you can!”

But who am I to say this. I am neither an “industry expert” nor am I Steve Jobs to say “this is what is good for you; take it or leave it”. Given that we are a niche company trying to grow (and growing) in the face of industry giants, we are actually contemplating building deduplication support in our data backup software, StoreGrid. While not many of our customers/partners are asking for it, we do get the occasional prospect saying that deduplication (rather, the lack of it) is a show stopper feature for them!

As we started thinking about and designing the best way to support deduplication in StoreGrid, we encountered many options to consider and many complexities to be handled. But at the end, we were left with a fundamental question – whether a full-fledged deduplication is indeed possible in the online backup world! Before I explain some of the options and the complexities, and why we think a full-fledged de-duplication may not be feasible in a pure online backup scenario, let me first get into a broad overview of the two deduplication approaches…

Deduplication at the source (client) vs. at the target (backup server) : There are vendors who claim they do the deduplication at the source (i.e. the client system that is being backed up) as opposed to others who claim that they do deduplication at the target (i.e. at the backup server). If deduplication is done at the source then it is easy to deduplicate data at a block level across all files within the source system. If deduplication is done at the target then it is equally easy to deduplicate data at a block level across all files across all the client systems backing up to the backup server. Quite obviously doing deduplication across all files across all clients will be much more effective than doing deduplication only at a client system level. It is theoretically possible to do deduplication at the source system and still be able to deduplicate across all systems backing up to the backup server. In this case, each client (source) has to continuously update itself with the meta-data of the blocks that are being stored in the backup server. The meta-data in this case would simply be the checksums of the blocks. These checksums are looked up to identify similar blocks of data. I have not personally tested such a product myself – i.e. the ones doing deduplication at the source system and still being able to deduplicate across all systems backing up to the backup server. But this may not be as efficient in terms of performance as compared to doing the deduplication at the backup server end, especially if the backup/storage server resides at a remote data center (and the meta-data needs to be downloaded each time from the remote server).

Armed with this background, lets dive deeper into the implications of these ‘approaches’ in the online backup context…

Option 1: Deduplication at target
One of the most important requirements in the online backup domain is that the data that is backed up is encrypted before the data leaves the source system and is sent over the internet to the remote data center (where the data is stored). Deduplication works by finding similar blocks across all the files and physically storing only one copy of the block in the storage system. And encryption works by destroying all patterns in a given data and making the data random. Because of the way encryption eliminates all patterns, trying to do deduplication on a set of encrypted files will have no effect – i.e. finding similar blocks of data across encrypted data will not be of much use as encryption would have eliminated all patterns. That means doing deduplication at the remote storage end, where all the data from different clients systems are encrypted and stored, is technically not possible. The option of not encrypting the data that is being backed up to the remote data center is not really an option in the online backup world.  Another point to note is that deduplication at target doesn’t really help much in the case of an online backup scenario – clients still send all data across and hence don’t save anything on bandwidth! Of course, you save on ‘server side storage’ but optimizing this, I’d assume, comes a distant second to optimizing bandwidth utilization – for online backups!

Option 2: Deduplication at source – with a common encryption key
As I said before it is theoretically possible to do deduplication at source and still be able to deduplicate across all client systems in an organization. In order to do that, either the data should not be encrypted during backup or all the client systems will have to use a common encryption key to encrypt the data. Not encrypting the data is not really an option with online backups. Using a common encryption key would mean that for each block of data that is backed up the checksum signature of the unencrypted block is also sent to the backup server where it is stored. Every client that is backed up should look up this database of checksums stored in the backup server before sending a block of data to the backup server. Though this can be done efficiently, I am not really fond of this option, because of the performance penalty, considering that the backup server is at a remote location in the case of online backups.

Option 3: Deduplication at local target backup server – with offsite replication
The only practical option I can think of is to have a deployment model where all clients in an organization backup to a local backup server – without encryption. The backed up data is deduplicated at the local backup server and then encrypted and sent to a remote backup or replication server. This deployment model will ensure that the deduplication is done on data from across all clients backing up to the local backup server.  Depending upon a customer’s preference, the local backup server can either keep a copy of the deduplicated backed up data (for quicker restores) or the backed up data at the local backup server can be purged (not recommended) once the data is moved to the remote backup/replication server.

In summary, we prefer the last approach, viz. doing the deduplication at the target backup server which is deployed locally at the site where clients systems are. This would allow the client to backup to the local backup server without encrypting the data – thus facilitating  deduplication at the target. And for offsite storage, the data from the local backup server would be deduplicated, encrypted and sent to the remote backup or replication server.  This would also ensure that the benefits of bandwidth savings associated with deduplication are also achieved.

I look forward to feedback & suggestions on other ‘better’ ways of implementing deduplication in the online backup domain!

The above post was written by Sekar Vembu of Vembu Technologies. Vembu Technologies is a backup software vendor whose product, StoreGrid, powers the online backup services of a large number of service providers across the globe. Besides remote backup, StoreGrid is also used for on premise backups of workstations and servers at various companies & universities.

What is Synthetic Full Backup, anyway? Synthetic Full Backup is a way to create a new full backup without actually doing a full backup. The way it is done is by combining a previous full backup and the subsequent differential/incremental backups to “synthesize” a new full backup. Note that all of these are done at the backup server and hence it does not involve actual transfer of data from the clients to the backup server. Here is a definition of synthetic full backup on the web.

The advantage of using a synthetic full backup is that the client systems (the production servers and the user desktops/laptops) do not have to do a complete full backup periodically. This would reduce the load on client systems and the time taken for periodic full backups quite significantly. This is especially much more attractive in the online backup world because synthetic full backups eliminate the need to transfer large amount of data (involved during full backups) over the internet every time a full backup needs to be done. So far so good! So why not implement this right away considering that the advantages are so obvious. Hold your horses…

During synthetic full backup, the process of “synthesizing” a full backup is done at the backup server end. In order to “combine” a previous full backup with subsequent incremental/differential backups, the backup server should have access to the encryption key used to encrypt the backup data. Note that in the online backup world the encryption is done at the client end (the production servers and the users’ desktop/laptops). One of the most debated topics in online backup is about the security of the data that is backed up – will the service providers have access to the backed up data of their customers? Almost all online backup solutions, including StoreGrid, encrypt the data before the data is sent over the internet to the service provider’s storage cloud. And during restores the encrypted data is first restored to the client and then decrypted at the client end. So unless the backup server is given access to the encryption password, temporarily at least, synthesizing a full backup from a previous full backup and subsequent incremental/differential backups would not be possible.

But there are workarounds that can be implemented which would avoid the need to decrypt the encrypted data in the backup server for synthesizing a new full backup. Let me describe the workaround we are planning to implement and the resultant additional risks this introduces…

Firstly, for every file, StoreGrid does a full backup and then subsequently does differential backups (which is the block level differences between the current file and the content of the original file that was backed up during the full backup). This is done because if we were to do subsequent incremental backups (that is the block level differenced between the current file and the content of the file the last time it was backed up either incrementally or fully) all the time, instead of differential backups, then it is very difficult to implement versioning.

This is because for restoring the latest file we need to maintain the full backup file and every incremental backup that was done. In the case of block level differential backups, the latest file can be restored using the full backup file and the latest differential backup that was done.

So versioning is easier as we can delete the differential backups that are not required to be kept. This is illustrated in Figure 1 below.

Figure 1

Considering the way we are doing full backups and differential backups, we plan to implement synthetic full backup without actually physically combining a previous full backup and a subsequent differential backup. Instead, as illustrated in the Figure 2 below, we would simply create a reference in the database for a synthetic full backup with the information about which previous full backup and the differential backup make up the synthetic full backup in question.

Figure 2

This information would have to be used only during restores. Thus by just keeping the references of full backups and differential backups required to make up a new synthetic full backup, we can eliminate the need to have the backup server decrypt the data for combining backups to synthesize a full backup.

What are the risks introduced by the above process? If we have to follow the above approach (having just references in the database without actually physically combining different backups) forever by actually doing only periodic synthetic full backup (to avoid a normal full backup), then, as illustrated in Figure 3 below, restores can become more complex and time consuming.

Figure 3

As during restore of a latest file, the first full backup file and every subsequent synthetic full backup file have to be restored along with the latest differential backup for that file. If this involved tens or hundreds of synthetic full backups then the restore process will surely become quite inefficient. Besides a simple restore of the latest file could mean restoring data which was stored months or years before. This introduces additional risks as even if one intermediate block of data from a synthetic full that was done months before is corrupted for some reason then all the backups done after that would be invalidated and cannot be restored. This is a serious risk. This risk can be eliminated either by physically synthesizing a full backup by decrypting the data when synthetic backup is done or by actually doing periodic full backups without relying on the synthetic full backup feature. The former option would mean that the backup server should have at least temporary access to the encryption key which introduces security risk. The latter option makes the restore process inefficient in addition to increasing the risk of losing data because of a small corruption in a block of data stored months before.

What is our take? We strongly believe that the fundamental philosophy behind having a robust and foolproof backup strategy is to have as much redundancy for the data as possible. Any backup strategy that sacrifices redundancy for storage efficiency or for reducing time taken for backups should be avoided if feasible. Hence, though StoreGrid would have support for the synthetic full backup feature in a few months time, we would strongly advise our partners to thoroughly analyze it and understand the implications before using this feature. Our recommended approach will always be to do periodic full backups of all the data. Perhaps, one can reduce the frequency of complete full backups by doing frequent synthetic full backups in combination with less frequent complete full backups. We would certainly not recommend completely doing away with a normal full backup altogether.

This was exactly the sentiment expressed by some of our partners when we spoke to them about this feature. Like in many other spheres of life, ‘natural’ is better than ‘synthetic’, I guess!

The above post was written by Sekar Vembu of Vembu Technologies. Vembu Technologies is a backup software vendor whose product, StoreGrid, powers the online backup services of a large number of service providers across the globe. Besides remote backup, StoreGrid is also used for on premise backups of workstations and servers at various companies & universities.

Hope you enjoy reading it.

Note: Backupanytime does not use our product, StoreGrid, for their backup service. I believe they use our competitor’s product.

The above post was written by Sekar Vembu of Vembu Technologies. Vembu Technologies is a backup software vendor whose product, StoreGrid, powers the online backup services of a large number of service providers across the globe. Besides remote backup, StoreGrid is also used for on premise backups of workstations and servers at various companies & universities.

Where is the Software Plus Services play here? Not yet. But this is the beginning of the move towards Google adopting a ‘software plus services’ strategy. Google will soon realize there are some large solution providers out there who would like to customize and host their Google Apps themselves and offer it to their customers. Additionally, there will also be large mid-market and enterprise customers (which is where most of the IT money is spent) who would like to customize their apps, integrate them with their business processes, and even host Google Apps internally and manage it themselves.  Microsoft offers on-premise, channel hosted, and Microsoft hosted solutions for their applications; Google will follow suit soon – the only thing is that Google comes into the ring from the opposite side  (of Microsoft) . In summary, no IT vendor however big, can afford to ignore a segment of the market because of some religious opposition to a business model. As Microsoft and Google start pushing their software plus services strategy, smaller vendors will follow suit.

My recent comments on an MSPMentor post: “Will Managed Service Providers Back Microsoft Exchange Online, SharePoint Online” -are quite relevant in the context of this subject…

“I think it is inevitable that Microsoft takes this hybrid approach with the SaaS model. But the market is so big there is always room for VARs and MSPs to add    value and win customers. In our experience in the SMB market segment we have dealt with two types of SMBs, the one who has internal IT and the one who     outsources it to a local VAR or an MSP. The latter segment is where VARs and MSPs have to cater to by building relationships with customers and also by becoming a trusted advisor/CIO of these small businesses.

Finally, there is no point fighting the tide. Microsoft cannot afford to cede a market segment to a salesforce.com or Google etc. So they need to do something to capture the market segment which is directly consuming applications from the SaaS vendor. That does not mean there is no value VARs/MSPs can add. I strongly believe there is probably 50% of the SMB market segment who are not comfortable with consuming business applications directly from the SaaS vendor. They would go to their local MSP/VAR who would bring in additional value so that these SMBs can focus on their core business.”

I think the complexity of IT is such that it is impossible for a large vendor to cater to all types of businesses. There is a big segment of the market that does not want to figure things out on their own and rather focus on their core business. They would rather outsource it to a trusted MSP/VAR to figure everything out and deliver a solution they could use.

In my opinion, Google is coming around to the same conclusion. Watch this space!

The above post was written by Sekar Vembu of Vembu Technologies. Vembu Technologies is a backup software vendor whose product, StoreGrid, powers the online backup services of a large number of service providers across the globe. Besides remote backup, StoreGrid is also used for on premise backups of workstations and servers at various companies & universities.

Note to everyone: I express my views with no malice towards anyone. I use harsh language to drive home the gravity of the situation. My harsh language is not to be taken personally. I strongly believe most of us as individuals are good natured and will not cause intentional harm to others. That is another reason I strongly feel we need to get out of the system which breeds crooks out of even the good natured individuals amongst us. If we do not strongly question these when we can, the day is not too far when our right to question will also be taken away in the name of “national interest”.

I am constrained to point out yet another example of government excess. In the name of protecting India’s reputation and in the name of protecting the 50,000  plus employees at Satyam Computers and in the name of protecting the entire Indian IT industry, the government of India has stepped in and taken charge at Satyam Computers. They have disbanded the current board at Satyam Computers and appointed a new board to ensure continuity of operations at Satyam Computers. It is a surprise to me that the government has such a power in the first place. It is worth noting that the shareholders of Satyam Computers were not consulted at all by the government. It is also worth mentioning that all the “spineless industry experts” are praising this government intervention into a private company’s affairs as the best thing since slice bread. By my definition, anyone, whatever reputation he/she has built for himself/herself over the years, who accepts the board position at the government created board at Satyam is a “crumbs picker”. It does not matter they all come with good intentions. They are crumbs pickers because I consider it immoral for the government to intervene in a private company’s affairs. It is another matter that the previous board members, appointed primarily by the founders and approved by the shareholders, were crumbs pickers too. But they at least had the approval of the shareholders even if it is specifically for picking crumbs thrown at them by the founders rather than representing and protecting the shareholders. So it is the shareholders who should pay the price, which they have already done. Having learnt their lessons, the shareholders should get together and decide on how to run Satyam Computers. It is none of government’s business to intervene in the name of protecting the national reputation or Satyam’s employees.

The government’s role should only be to make sure the fraud perpetrated by the founders is investigated impartially and the guilty are brought to book. That’s it. Nothing more. The shareholders who are the rightful owners of Satyam Computers will have the full right to decide the future of Satyam Computers. If they want to run down the company by appointing another set of crumbs pickers to the board and crooks in the management, let them exercise their right.

Why am I so against the government intervention even, in this case, if it appears to be “good for everyone”? Because the same power the government uses for the “good of everyone” would be misused when it suits them. As I said in my last post, “Crooks are taking over this world; How long do we just settle for the crumbs“, when government gets more and more power the biggest of the crooks in the society will end up in the government because that is where it is the most profitable and the risk of getting caught is also minimal. Let me clarify how the same power used by the government for the “good of everyone” can be misused by the crooks who eventually are in the government. The process always goes like the following:

Just think for a moment why everyone is praising the government intervention in Satyam Computers affairs. That is because it is impossible to argue against anyone who is saying that “Satyam’s employees have to be protected at all cost” and that “India’s reputation should be protected at all cost”. These are what I call “motherhood slogans” for obvious reasons. We all know that this “motherhood slogans” are what is successfully employed by almost all crooked politicians to usurp more and more power onto themselves so that they can enrich themselves at the expense of others. So the power to disband a board of a private company and appoint its own board will be misused one day by the crooked politicians to destroy a genuine and honest company probably at the urging of competitive businesses run by crooked businessmen. And these crooked politicians will use all the “motherhood slogans”, like “national reputation or even national security”, at their disposal to destroy an honest business. So, as I keep saying the best way to protect honest people and businesses from crooks is to have a system which automatically makes these crooks powerless where ever they are and whatever they do. And that system is the “true free market” system which by definition would be minimal government and maximum freedom and power in the hands of individual citizens.

The above post was written by Sekar Vembu of Vembu Technologies. Vembu Technologies is a backup software vendor whose product, StoreGrid, powers the online backup services of a large number of service providers across the globe. Besides remote backup, StoreGrid is also used for on premise backups of workstations and servers at various companies & universities.

Just yesterday, I was chatting with our auditor about some money we want to send to our newly opened US subsidiary and the amount of paper work that is involved in India to get that done. It is worth mentioning that it took almost ten days for us to send a mere $6000 as capital investment to our US subsidiary as our bank kept asking for more and more documents from us to satisfy the regulatory authorities – which in this case is the reserve bank of India (RBI). While speaking to him we were discussing the topic of the corporate scams and how the regulations to prevent the scams make it harder for genuine and honest companies to do business in an efficient manner. In that context I made a comment to our auditor on how the current skewed free market system breeds crooks and how it is similar to the way the current democratic setup, which gives lots of power in the hands of the government, breed only crooked politicians to compete for high offices. It is my contention that the need for regulation arises because of the skewed free market system, with government doles and regulations, which is in vogue across the world. In a true free market there will not be a need for government regulators and private citizens, out of necessity, will learn to be vigilant enough not to fall for fraudsters. And this system will automatically discourage crooked and fraudulent behavior. Of course, there will always be crooks in any society but their ability to do big long term damage would be very minimal in a true free market system because their powers are very limited anyway.

This discussion with my auditor was before I heard about the Satyam Computers scam which was revealed yesterday. Within in an hour after my discussion with our auditor I read about the latest corporate fraud by Satyam Computer Services and how some analysts and the media were predictably talking about how these scams can be prevented with more government regulations. One analyst in a news channel even went to the extent of saying that may be private auditors cannot be trusted and that we should appoint government auditors to audit the books of publicly listed companies. These knee-jerk comments and reactions are worse than the scam itself. At least in the scam a few investors lose money, learn their lessons and become extra cautious in the future. We should realize that how much ever regulation you have the crooks will always find a way and it only breeds more and more crooks as it becomes impossible for genuine and honest people to do anything worthwhile. Tougher regulations will only encourage more and more corruption and make the small time crooks aim to become big time crooks, as the only way around the system will be to game the system. Most good and honest people will stay out of doing anything worthwhile and will be forced to settle for the crumbs. There is enough empirical evidence we see in real lives but we all refuse to acknowledge that and think that if you give more power to the government these things will somehow stop. In fact, what happens is the reverse; as the government gets more and more power the crooks actually end up in the government because that is where it is the most profitable and the risk of getting caught is minimal. More regulation also actually gives gullible citizens a false sense of security and they start believing that because there is a regulator overseeing everything, we will all be safe from fraudsters. This actually gives room for bigger fraudsters to emerge. Without regulations and government meddling, private citizens will be more watchful and would ask the tough questions before parting with their money. And that will actually expose smaller fraudsters before they could commit big frauds which can be much more devastating. As I said before, the more the power the government has, more of the bigger crooks will end up in the government and that is much more dangerous as they can cause very long term damage to whole societies.

Why is all this relevant for us as a business? It is relevant for us because all these excessive regulations to prevent fraudsters are actually increasing the cost of doing business for us and it also makes us more inefficient. The crooks anyway find a way through all these mess and game the system. And we end up being the victim because we have no inclination or skills to game the system. That is, most honest businesses would rather remain small than to succeed by hook or crook. It is time we all fought against this so called “more government regulation” menace or else we will all be perpetually cursed to pick up the crumbs left over by these crooks who eventually end up in the government and run our lives.

The above post was written by Sekar Vembu of Vembu Technologies. Vembu Technologies is a backup software vendor whose product, StoreGrid, powers the online backup services of a large number of service providers across the globe. Besides remote backup, StoreGrid is also used for on premise backups of workstations and servers at various companies & universities.