The voice for the medical software reseller community.

HIPAA Security mandates not only the confidentiality, but also the integrity and availability of data. System backup is a top priority safeguard for medical practices, and in fact will soon become a HIPAA requirement. The importance of a robust backup has been underscored with the recent Florida hurricanes. Businesses as far north as Pennsylvania have been destroyed by subsequent floods – a painful reminder of the importance of an off-site backup.

Responsible resellers have always stressed backups and offered solutions. While there are a myriad of technologies available – tape, CD, DVD, optical disk, Zipdisks and portable USB hard drives – one attractive and emerging option is internet backup.

Internet backup offers a number of end-user advantages:

• No daily intervention necessary

• Off-site storage

• Low cost for the reseller to add value by monitoring and periodically testing the backup

For resellers, the subscription pricing model with internet backup can offer an important recurring revenue stream.

You should be aware that even with broadband connections, the initial upload of a GB is not something you will sit at your desk and wait for. Internet Backup may not be the best option for data intensive EMR applications.
 

Reselling Internet Backup

VARs have no shortage of options for internet backup services to resell – the problem is finding one you trust. Hundreds of internet backup services have emerged over the last several years, as a quick Google search will reveal. The barriers to entry have become very low with the availability of packaged software for on-line backup providers. While it is impossible to track every backup company, you can find a detailed comparison at Home Office Reports Off-Site Backup Review.

I spoke with one of these companies, FirstBackup (http://www.firstbackup.com/), who offers a channel partner program. They will backup 1 GB of your client’s data for under $15/month. You could add value by monitoring these backups on a daily or weekly basis. A web interface will show all your clients' backups on one page with a color-coded interface to help you quickly identify any problems. A drill-down is available to review log files. As a further value-added service, you could test the backup quarterly. If this service were resold to 30 practices for $35/month each, you gross $12,600/year and net $7,200/year.

Due diligence is of course necessary with a matter as serious as system backup. The provider should offer data-center class physical, technical, and administrative security procedures. Data encryption for data during transmission and on the server would be appropriate. Financial stability, responsive customer support, and good references are important. You need to have a sub-contractor agreement with the provider which meets the requirements of the HIPAA Business Associate agreements you sign with your clients.
 

Becoming a Internet Backup Provider

Larger resellers with hundreds of clients may elect to take the leap and become on-line backup providers for their clients. One company which offers on-line backup solutions is RPS (http://remote-backup.com/) of Memphis, Tennessee. They will put you into this business for as little as $895. They claim to have over 6400 customers backing up over 1 million computers. An increasing number of VARs are joining the ranks of their client list.

RPS’ value proposition is that they will quickly and easily put you into the business, by offering:

• Software, both server and client licenses

• Business kit with contracts, risk management suggestions, marketing tools

• Maintenance and support agreement

• Hosted servers, if you desire

Offering this service for your clients is a serious undertaking which requires careful attention to the physical, technical, and administrative security procedures. Most resellers would be advised to use a hosted server at a data center with robust security procedures. Even with an outsourced service, careful attention to your internal policies, procedures, and management is vital. As with the small reseller, a variety of value-added services can also be included in your offering.

To briefly explore the economics of an on-line backup offering, the RPS server software, 100 client licenses, the business kit, and 1 year of maintenance sell for $5497. Hosting costs, internet connectivity and in-house labor must then be added. On the revenue side, selling 100 subscriptions at $50/month will generate $5,000/month of recurring revenue.

In the end, backup is one of the HIPAA related services which resellers will continue to offer. Internet backup offers some compelling advantages for both the client and the reseller. Whether or not you choose to promote internet backup, it is certainly appropriate to take a look at the many new options, update your offering as you find appropriate, and offer a robust solution to your clients.

Gary Pritts is not affiliated with InvestMed; he is a healthcare, business and information systems consultant with 25 years of experience.  To contact Gary with questions about this article or HIPAA in general, visit his website at:  www.eagleconsultingpartners.com