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July 7, 2011
This is an exclusive interview by BackupReview.info (BR)
with Mr. David Brown, CEO of Datotel Online Backup
Company History and Operation
1/BR: Please give us some background information about your company, such as how it was founded, by whom, how long have you been around, where your headquarters are, how many branch offices you have or you will have, etc.
Datotel was founded in 2004 with the mission of lowering our clients exposure to system downtime and data loss while also helping them reduce their total cost of ownership as it relates to their IT infrastructure. Based out of our own data center, we provide colocation, infrastructure and insourcing with a full range of services that includes Backup, Virtual Servers and Desktops, Email and Blackberry Hosting, Data Protection, Disaster Recovery, Performance Monitoring and Reporting, Managed Connectivity, Firewall and VPN, Spam and Antivirus. Owning the data center allows us to leverage our investment and expertise to provide tailored solutions for our clients. We can build infrastructure solutions that range from a 100% cloud computing environment to a simple cabinet or cage of colocation space.
2/BR: Please tell us about your day to day job, and its challenges and successes?
Although my official role hasn’t changed since we started Datotel in 2004, where I spend my time and efforts has shifted. Today, I spend most of my time building the company, whether it’s helping recruit the next employee or customer through to reinforcing our company culture. One of the largest challenges has been maintaining that culture during our rapid growth both from a number of employees standpoint and as the level of technical sophistication and capabilities has grown.
3/BR: Is your customer base primarily in Canada or the US, or is there a significant international presence as well?
Approximately 60% of Datotel’s clients are based in the Midwest region with the vast majority of the remaining clients spread throughout the United States.
4/BR: How many employees do you have and how big is your R&D department?
Datotel currently has 42 employees ranging in functions from sales and marketing through engineering and customer support. We’re a growing company and always looking for more outstanding individuals to join our team.
5/BR: Any other news about your company you care to share?
We’re expanding Datotel’s presence in the Midwest and will be announcing the details in the coming weeks.
6/BR: How many subscribers do you have?
Currently, we’re providing services to over 110 clients (subscribers).
7/BR: What is the amount of file you backed up in your servers?
Over 50TB of data is backed up on our servers, 10TB of which is within our datavaulting solution.
8/BR: Could you briefly tell us about your revenue history, and what your future revenue growth would be?
Since our formation in 2004, we have had consistent growth in our client base and as a result have been recognized with a number of awards from the Missouri Fast Track award to Inc 5000. Our top line revenue in 2010 was over $6.5M and we’re predicting this growth rate to continue.
9/BR: Can you tell us about your servers, please? Where they are located, how many backups you perform, if server room is controlled for humidity, temperature, and whether there is backup power?
Before moving in the world of cloud computing, Datotel started life as a colocation company; providing high availability data center space, power, environments and bandwidth from our own 30,000 square foot data center. So, as you can imagine we have a strong environment and operation in which we locate both our own servers and those of our clients. Clients and indeed ourselves have different requirements for different data sets; we design custom backup and recovery solutions based upon those exact needs. In the world we live in, one size definitely doesn’t fit all.
10/BR: Which companies are your main sales partners globally?
While Datotel does have some reseller relationships, we prefer and operate on direct relationships with our clients.
11/BR: What makes your company and its service different from others?
As mentioned, by owning our data center, we’re able to provide greater customization and flexibility for our clients, which we believe, results in a higher quality of customer service. For example, our deep understanding of backup means that we’re going through the full spectrum of that solution and talking with our clients about recovery, not just data backup and protection. We’re focused on technology, yes, but Datotel is about helping our clients solve their very real business problems.
12/BR: What kind of growth rate have you been experiencing? And what is your expected growth rate for the next few years?
We have seen strong revenue growth, which is important, but more gratifying to me personally is the growth we’re seeing in the number of new clients through customer referrals.
13/BR: What have been your greatest challenges so far and what do you see these challenges are / will be at the present time / in the coming years? How do you plan to overcome those challenges?
Certainly, with the rapid rate of change in technology, keeping Datotel ahead of the curve and in a leadership position is an ongoing challenge, although that’s not necessarily unique to us, but more of a challenge for the entire industry. In addition, we have great interest in the next generation of IT professionals and the availability of talent to help drive future growth and prosperity in our business. As such, we’re actively pursuing partnerships with various educational and technology-related organizations that have an eye on up and coming professionals.
14/BR: And what are your biggest accomplishments so far?
First and foremost, as a company founded just 7 years ago, I am very pleased at how quickly Datotel has gained recognition, not just in our local market, but also on a regional and national basis. Additionally, the diversity of our client base across many verticals, including healthcare and non-for-profit has meant great stability in our business as well as consistent growth. Finally, in 2010, we acquired an additional 5,000 square feet of office space in downtown St. Louis and brought all of our employees under one roof.
15/BR: What are your top selling account packages, and why are they enjoying so much success?
Historically, colocation has certainly been a strong service offering for Datotel, but over the last 18 months or so our virtual servers and cloud recovery solutions have seen strong adoption. Over and above the technical and economic benefits of those individual solutions, I think one reason for their success is that we can deploy them in conjunction with our other offerings. These hybrid solutions allow us to meet our clients where they are as opposed to trying to fit them into a standard one size fits all solution.
16/BR: Are there any new products/services you are developing that will soon be available?
Our virtual desktop platform, built upon VMWare View technology is our latest service that we’re introducing to the market place. It allows clients to securely access their desktop from anywhere at any time; be that from their thin client at their desk, PC in a hotel lobby or on their iPad in a coffee shop. It provides great flexibility to the mobile workforce.
Talking of mobility, our next generation backup and recovery platform based on Asigra v11 will be coming later this year and will enable us to extend beyond the server and PC to mobile devices. That’s key as a we’re seeing more and more companies allowing their employees to use tablets and smart phones as their data entry devices and it’s just as important to be able to protect that data.
17/BR: Do you charge by account or by PC? Do you offer unlimited backup and restore?
Whether it is our clients power consumption in the data center, number of email accounts they’re using or in this case backup, we charge our clients based on the amount of storage they actually use.
Whether it is servers, PCs, iPads or iPhones that are being backed up, we charge based on the actual amount of space the compressed and deduplicated backups take up on our sans.
18/BR: One of the biggest concerns of online backup users is data security and privacy. How have you addressed those issues?
At Datotel, we host and process critical information in a number of industries from banking, through to healthcare, legal and corporate data. There are a number of requirements and audits we successfully pass in order to do so, so as you can imagine we take the security and integrity of data very seriously. Whether it is the multiple layers of physical protection we surround it with in our data center, through to the levels of encryption we use while the information is transmitted and stored, or the levels of background checks we do on potential employees, it is all designed and continuously evaluated by ourselves and verified by independent 3rd parties to ensure the optimal level of protection is in place for our clients.
19/BR: How does your proprietary technology compare to the proprietary technology of your main competitors?
We don’t spend a lot of time trying to figure out the technology behind our competitors’ solutions, but rather spend the time making sure that we are solving to our clients goals.
20/BR: What are the key competing technologies in the online backup industry and what are some of the advantages you offer over the competition?
Datotel partners with Asigra for cloud backup solutions. We believe that offering their solution is a decided competitive advantage since Asigra is a holistic solution. First, the Asigra platform is a single, turn-key solution that streamlines the management process. Second, the Asigra platform is agentless architecture, meaning that the companies don’t see any disruption or denigration of service during software upgrades. Finally, Asigra’s solution is an automated one that continually monitors backup files before data corruption becomes a serious issue.
21/BR: Does your solution take into consideration compatibility across the major platforms, mobility, flexibility and constant access to data?
Absolutely. Asigra has effectively addressed the mobile access issue with their latest v11 release. With the proliferation of non-traditional endpoint devices serving larger mobile workforces, employee tablets and smart phones often contain confidential customer data and corporate Intellectual Property (IP). It is no surprise that many companies today have elevated the status of data on these mobile devices to mission-critical. Asigra v11 is the industry’s first end-to-end cloud backup solution that is purpose-built to leverage physical and virtual environments, has built-in, scalable mobility support that includes support for tablets and smartphones, helping you meet regulatory compliance, while aligning the value of data with the costs of protecting it.
22/BR: How has the online backup business evolved in the past few years, and how do you see it further evolving?
The backup of servers and desktops is now seen as basic functionality. I see the online backup business evolving beyond simple backups to include increased recovery capabilities and secondly move into the mobile device space. With the proliferation of non-traditional endpoint devices serving larger mobile workforces, employee tablets and smart phones often contain confidential customer data and corporate Intellectual Property (IP). It is no surprise that many companies today have elevated the status of data on these mobile devices to mission-critical.
23/BR: Whom do you consider your main competitors? And Why?
While we’re certainly aware of our competitors, our focus is on growing Datotel’s business.
24/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?
No, we don’t fear companies like Microsoft and Google. We have a very strong local and regional footprint, with the majority of our business coming from St. Louis-based clients. Our ability to localize the conversation, engage with customers directly and offer flexible, customized solutions means that we’re competitive, regardless of what is being offered by others in the industry.
25/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 (Backup.com), VaultLogix acquiring US Data Trust], DSCopr.net acquiring SafeData.net, and Backup-Technology merging with Terian Solutiuons. What is your strategy? Do you think that the acquiring companies got a good deal or the acquired companies sold too soon for too low?
I think that it may be too soon to know in most of these cases; time will tell if these acquisitions were sound.
26/BR: In the next two years or so, what new developments do you expect to see in the online backup and data storage industry?
Due to the rapid rise of mobile devices, the online backup and storage industry has debuted enhanced solutions recently (including Asigra v11). I expect to see even more investment in this area.
27/BR: Do you feel that Google (and Apple) will dominate the online storage market?
No. Google is good for addressing certain applications, but is not a complete solution.
28/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?
There is always downward pressure for commodity offerings. We’re not focused just on cost, racing to the bottom to offer the lowest-priced solutions. Instead, we’re offering a great product at a reasonable price, backed by process and expertise.
29/BR: Many have exited the online backup and storage business, including, Xdrive, Yahoo! Briefcase, MediaMax (Streamload), OmniDrive, Zoogmo, Iron Mountain Digital and many others. Do you have any comment on that?
It’s not a great surprise to see acquisitions and consolidation across certain segments of the industry as the online backup and storage solutions become more sophisticated and see greater adoption.
30/BR: In the past few years, many small companies and even some banks 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?
Companies that offer a one size fits all backup solution will have difficulty with differentiation. To distinguish ourselves within the industry, we take the opposite approach: offering many products and services that can evolve with the client’s needs over time and a personalized experience with our team. Additionally, we not only focus on backup, but recovery as well.
31/BR: Any advice for IT companies planning to launch an online data backup and storage business?
Not at this time.
32/BR: Cloud computing (or SaaS) isnâ€™t yet a mainstream technology. How are you educating potential customers of its benefits?
I disagree that could computing isn’t mainstream already, especially with the business and consumer markets heading in the same direction. Consumers have moved in droves to SaaS type of applications such as Facebook, Twitter, etc. and expect the same type of lightweight apps and on-demand access that they enjoy in their business lives.
33/BR: How can a file sharing and document collaboration solutions like your product help increase the productivity of a mobile workforce?
The smartphones and tablets are increasingly becoming the tools of choice and means of data entry for end users as there’s a gradual move away from the traditional office environment. We offer virtual desktops that enable easy, on-demand access to data, documents and applications. Additionally, we offer our datavaulting solution that backs up and protects the vital data stored on these mobile devices.
34/BR: Your solution is built specifically for small businesses, for mobile professionals and virtual teams. What are the main advantages of your service compared to the raft of other document sharing services on the market?
Datotel’s solutions are viable for small and medium businesses as well as large enterprises. Regardless of the size of company, number of users or industry, we offer flexible and customized products and services to fit the needs. This approach is a decided advantage over a one-size-fits-all package.
35/BR: What is the most regrettable mistake that you or your company has made in the past? How would you handle that mistake if you were given a second chance?
While we strive to be perfect, no company is infallible. Once a mistake is made, the important thing is how, as individuals and as a company, we respond to and correct the issue.
36/BR: On a personal note, tell us about your life: married or single, children, your hobbies, where you were born and grew up, where you got your education, where you get your inspiration, and whether you will be around in this business, say 5 years from now?
Prior to the founding of Datotel in 2004, I spent five years working in the United States and the United Kingdom as a consultant for Oracle, specializing in large-scale enterprise systems integration. I am an active board member of a number of organizations, including; United Way of Greater St. Louis, Entrepreneurs Organization (EO), President of the Scottish St. Andrews Society, on the Washington University Olin Eliot Society committee and a member of the Young Presidents Organization (YPO). I have a Bachelor of Engineering degree with Honors in Information Systems Engineering and a Master of Information Management from Heriot-Watt and Washington University in St. Louis respectively and a Masters in Business Administration from the John M. Olin School of Business at Washington University in St. Louis.
Feedback and General Comment
37/BR: Do you have any thing you would like to add?
No, except that I appreciate the opportunity to discuss Datotel and our approach to online backup and recovery.
38/BR: Now that we know about you, we want to ask you about us. As you know BackupReview.info has been providing useful information about the online backup and data storage industry since 2004. We post daily news, write reviews, rank the top 75 online backup companies on a monthly basis, we keep a directory of companies, conduct interviews, and publish all of our posts in 61 other sites. How can we improve our website and its services?
Regarding the website, the user experience could be improved by moving the recent news items to a more prominent, higher area on each page.
We sincerely thank David Brown for this interview opportunity.
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