November 18, 2010

This is an exclusive interview by (BR) - Your source for online backup news and reviews


Phone: 1-888-356-2709
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with Mr. Jim Rutherford, President of CoreVault Online Backup

Photo: Jim Rutherford

Company History and Operation

1/BR: Please give us some background information about your company – when and how it was founded, location, etc.

CoreVault is a Cloud Solutions Company located in Oklahoma City. Founded in 2004 and officially launched in November 2005, CoreVault is a privately owned affiliate of Dobson Technologies. Dobson Technologies is the parent of two local exchange telephone companies and Intelleq Communications, a fiber transport company. Initially created by Dobson Technologies as a secure solution to its own backup and recovery needs, CoreVault utilizes our vast affiliated infrastructure to serve customers in 34 states and four countries.

2/BR: Please tell us about your day to day job, its challenges and successes.

I am President of CoreVault and three other Dobson-affiliated companies. I work with a management team and talented engineers and product development. Our sophisticated network infrastructure allows us to not just provide a highly secured and well managed network, it provides a huge competitive advantage over other cloud solution providers. Our corporate success has been based on 75 years of providing quality voice and data services to our customers.

It’s a challenge to keep any company growing in a depressed economy. Here’s how we overcome the challenges at CoreVault – we motivate our teams to reach farther by seeking innovative solutions. People like to be associated with success; CoreVault continues to achieve that each day. We are currently ranked one of the nation’s Top 5 online backup and data storage companies by Backup Review. CoreVault is recognized as the 17th fastest growing private company in Oklahoma City. This is CoreVault’s second year to receive the prestigious Metro 50 ranking.

3/BR: Is your customer base primarily in the U.S. and/or Canada? Do you have an international presence?

Our corporate headquarters is in the United States, although we do have a very strong alliance with partners in Canada and 4 international communities. We’ve established strong relationships with over 25 Industry Associations nationwide, garnering their endorsement and helping us establish our broad customer base.

4/BR: Other news about your company you’d like to share?

Since CoreVault is affiliated with a phone company that has been in business for almost 75 years, we are able to leverage an established, extensive private infrastructure. The gigabit Ethernet link that connects both data centers with complete redundancy throughout the network is used specifically for replicating data between both sites.

5/BR: How many subscribers do you have?

We don’t disclose statistics on our subscribers, but we can tell you that CoreVault’s customer base and the volume of protected data continues to increase at a very healthy rate. We have Channel Partners in selected regions of the U.S. that help our sales efforts on a daily basis.

6/BR: Can you tell us about your servers, please? Where they are located, if server room is controlled for humidity, temperature, and whether there is backup power?

Our primary facility is located in Oklahoma City with our secondary one located more than 120 miles away. Our emergency backup generators are capable of running our entire 175,000 square foot complex uninterrupted for 1-2 weeks. Our batteries alone can power the data center for approximately 24 hours at a single stretch. We boast an FM 200 fire suppression system, redundant A/C units, redundant Internet connectivities, key card access, video and onsite personnel surveillance, to name a few. Both locations are connected via a gigabit Ethernet link. Our SAS 70 Type II and Red Spin certifications are updated annually.

Company Positioning

7/BR: What makes your company and its services different from others?

First, our software. Our agentless technology (Asigra) allows us to provide a smooth installation experience with automatic deployment of software updates. It is compatible with a majority of operating systems and applications on the market. Our software provides superior technology and security benefits like deduplication, centralized management, FIPS 140-2 certification, e-mail validation, four levels of data recovery, tiered storage, continuous data protection (CDP), unlimited retentions, virtual environment compatibility and bare metal restore, to name a few. Second, our customers backups are monitored by our CBRM certified engineers. We are proud of our Industry Association endorsements of CoreVault to over 500,000 businesses, legal and healthcare professionals. Uninterrupted service 24/7/365 is paramount and has guided our success these past 75 years, heralding a proud private ownership heritage and customer-oriented culture.

8/BR: What growth rate have you experienced? And what is your expected growth rate for the next few years?

CoreVault has experienced a triple digit revenue growth rate since its inception in 2005. We anticipate double and triple digit revenue growth rate in the years ahead, because we are in a positive growth market and our business strategy is solid.

9/BR: What are your greatest challenges so far; and do you anticipate these challenges to continue? How do you plan to overcome these challenges?

Every growth-oriented organization is faced with challenges. At CoreVault, we continually reach for new and improved strategies to keep our employees motivated. The market is fast paced, competition is strong and we do not repeat the same effort over and over with minimal impact. We will continue to diversify our customer portfolio and increase revenue per user by introducing new products and services geared toward enterprise customers. We’ve stepped up our continuing education and marketing efforts accordingly.

10/BR: What are some of your biggest accomplishments so far?

We are proud of our revenue growth since CoreVault’s inception. We’ve reached a 5 year milestone as a small business, so we must be doing something right. Securing endorsements over our competitors from legal, healthcare and other professionals reinforces our ability to provide a quality product, service and price in the marketplace. Being awarded Metro 50 recognition for the second year in a row sends a strong acknowledgement that we are one of Oklahoma City’s best.


11/BR: What are your top selling account packages, and why are they enjoying so much success?

We have primarily provided a SMB product with associated tiered storage and pricing. While this service has done well for us, we recently rolled out more of an Enterprise level product and service that is tailored to larger clients. They have different needs than small business in certain areas, and pricing is adjusted for their larger data volume.

12/BR: Are there any new products/services you are developing that will soon be available?

Absolutely. In about 30 days, CoreVault will introduce Cloud Hosting. We plan to offer different packages that will work well in both dedicated and virtual environments. Following closely will be Disaster Recovery/Business Continuity consulting as we further promote the technical certifications and knowledge base of our Sales Engineers.

13/BR: Do you charge by account or by PC? Do you offer unlimited backup and restore?

Our business model is centered around charging customers for the amount of compressed data they backup and protect with us. It doesn’t matter if they have one PC or one thousand, it boils down to compressed GB pricing.


14/BR: One of the biggest concerns of online backup users is data security and privacy. How have you addressed those issues?

Privacy and security is a major focus of the business community, and I believe we have both bases well protected. First, the data backed up to our facilities is compressed and encrypted at 256 bit AES level before it leaves the customer’s system. That data remains encrypted in flight and at rest in our facilities. Third party certifications like SAS 70 Type II and Red Spin lend an independent perspective on the high level of secure protection we offer our customers. The Red Spin certification is specifically targeted at testing our network penetration and security. Our certifications are updated annually. Finally, our software is FIPS 140-2 certified. The National Institute of Standards and Technology is a federal technology agency that develops and promotes measurement, standards, and technology. Federal Information Processing Standards Publications (FIPS PUBS) are issued by the National Institute of Standards and Technology (NIST). FIPS 140-2 is the most current security requirement for cryptographic modules, or encryption.

15/BR: How does your technology compare to the technology of your main competitors?

Combined with our facilities, service and trained professional teams, we are confident we have a solid, and in some cases, superior offering to our competitors.

16/BR: Does your solution take into consideration compatibility across the major platforms, mobility, flexibility and constant access to data?

Absolutely. You have to be compatible across major platforms in order to be viable in the B2B market. Businesses are looking not just for flexibility, mobility and constant access to data, but increased automation, security, process validation and scalability as well.


17/BR: How has the online backup business evolved in the past few years, and how do you see it further evolving?

We have seen a large influx of competitors into the marketplace resulting in significant price compression these past 2-3 years. Companies are distinctively positioning themselves as either consumer or business based, while some are trying to do both. Either way, CoreVault will continue to be a business based solutions provider and make ongoing adjustments as the market continues to mature.

18/BR: Whom do you consider your main competitors? And Why?

I would say companies like i365, CommVault and Venyu have more of an enterprise level product and service offering similar to ours. We also compete with businesses existing older tape backup technology.

19/BR: Large companies like Microsoft and Google have started to offer online storage solutions. Do you fear them? How can you compete with such formidable adversaries?

There are always large companies in every industry. They began entering our market in 2007 and will continue to have a presence and impact in our industry. However, smaller companies like CoreVault will continue to carve out their niche and build a successful business. We proudly stack our team and facilities against anyone in the industry. There is no reason to fear what you cannot control, but rather go compete where you can succeed.

20/BR: There has been a great deal of M&A activity in the industry during the last few years, such as Iron Mountain acquiring LiveVault, and Seagate acquiring eVault, EMC acquiring Mozy, and Symantec acquiring SwapDrive, VaultLogix acquiring US Data Trust], and most recently acquiring What is your strategy on M&A?

The M&A activity you describe validates the vitality of our industry. CoreVault does not compete for mass appeal, but would rather be recognized as a stable business providing sophisticated, full service Cloud solutions. Our best strategy is to strive for perfection in all our business undertakings.

21/BR: In the next two years or so, what new developments do you expect to see in the online backup and data storage industry?

There will be increased movement towards data hosting and data management consulting. A lot more companies are looking to off load the responsibility of having to manage their servers, while wanting 24×7 access and limited downtime since data loss can occur for a variety of reasons. We will continue to encourage companies faced with overwhelming data growth to explore CoreVault’s options for secure data protection.

22/BR: Do you feel that Google (Google Docs and the pending GDrive) will dominate the online storage market?

I think they will have a prominent role in it long term, but it remains to be seen if they will dominate the online storage market.

23/BR: In the future, say five years from now, do you think the cost of online storage will remain as it is today, or will it go significantly cheaper? For example, to back up a 1 GB file?

The market has seen a significant decrease in pricing due to lowered costs of bandwidth and storage over the last few years. I don’t believe we will see as rapid a cost reduction in the future.

24/BR: Many have exited the online backup and storage business, including, Xdrive, Yahoo! Briefcase, MediaMax (Streamload), OmniDrive, Zoogmo, and many others. Do you have any comment on that?

Unfortunately, businesses fail for many reasons, not just in this country or our specific industry. We will continue to focus on growth and excellence in everything we do.

25/BR: In the past few years, many small companies and even some banks, such as Wells Fargo, have started offering online backup solutions? Do you think that the online backup market is getting crowded? What do you have to do to stand out of the crowd?

No question, , we’ve seen a large influx of providers. I believe the economic downturn will weed out weaker start-ups, while businesses that focus on providing quality products and services will undoubtedly succeed.

26/BR: Any advice for IT companies planning to launch an online data backup and storage business?

Make sure you partner with someone with a compatible solution for your customer base. If they offer marketing collateral support, reliable customer service and dedicated technical staff, you will have a winning alliance.

27/BR: Cloud computing (or SaaS) isn’t yet a mainstream technology. How are you educating potential customers of its benefits?

We provide education through several channels like webinars, channel partners, CoreVault’s website, one on one meetings, conferences, white papers and case studies.


28/BR: On a personal note, tell us about yourself, spouse, children, your hobbies, where you were born and grew up, education, where you get your inspiration, and whether you will be around in this business, say 5 years from now?

I have been married for 33 years. We have two wonderful children that are now 30 and 26 years of age. I also have 4 wonderful grandchildren that are a lot of fun. I was born in Texas, grew up in both North Central Texas and Northern New Mexico and eventually moved to Oklahoma in 1979. I enjoy playing golf, fishing and spending time with my grandchildren.

I have received my most important level of education in the workplace over the past 30 plus years. Nothing teaches you more than life experience. I plan on leading CoreVault for years to come, because I firmly believe we have a strategy and team in place to ensure our success well into the future.

We sincerely thank Jim Rutherford for the interview opportunity.

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