In the month of April 2011, Compton Computers was conducting the regular revamp of their data center in Delhi. There were 8 to 10 old servers that were out of use and the technical team with consultation with management decided to sell them to the scrap. “The servers could not be used as protection for our data centers. With the hype around cloud, the management was bit reluctant to infuse fresh investment in IT for this emergent technology,” says Sandeep Vahi, Director, Compton Computers.

The company formed an internal team of five people including marketing/technical support to capitalize on this piece of hardware and start some value-added service. The team thought of foraying into an online back up offering especially for SMEs who do not have manpower to manage the online backup. “The old hardware was anyways going to scrap for a few thousand rupees. It seemed like perfect equipment for online backup,” says Vahi. However, Compton Computers needed to align with the right software vendor that could be compatible with the servers over the cloud and over the WAN.

Seize the Opportunity

Compton checked with couple of popular software vendors that, surprisingly, did not run efficiently on old servers. After a month, the company tied with Vembu Technologies for its cloud data protection solution, StoreGrid, which fitted perfectly with the existing hardware for online backup. “The solution’s option to white label the software was a big plus for us and for our customer base,” says Vahi.

The solution offering good data compression including 48-bit encryption was tested extensively for 45 days by Compton team. These WAN-related applications were not very processor–hungry, and hence, these servers worked perfectly, says Vahi.

Since past couple of years, the backup requirement for enterprises will be huge due to data proliferation across services. Compton Computers was offering cloud through managed service since many years but the online backup on cloud was the new foray. “All the components were available including hardware, clients, connectivity and with no investment on hardware, we sensed a colossal business opportunity,” he says.

Worth the Risk

Compton Computers is monitoring over 3000 end points within ten months of its foray. These are 50 to 100 end-point SMEs charged as OPEX model on a monthly pay per use.

“New servers would cost anywhere around Rs 10 Lakh to Rs 15 Lakh but the only cost for this business model was marketing collateral for customers” says Vahi. With 2011 being a year of consolidation, venturing into Cloud with a fresh hardware investment would have been a strict no, he says.

Data security was initially a concern with few clients. Compton conducted pilot for 200-odd end points with regular alerts, management of data and other online backup features. They have also applied for the data center certification viz. ISO27001.

A ‘Goldmine’ Future

In the next three years, we aim to connect over two lakh endpoints for online back up. It will be the second big business line for us, says Vahi.

With a strong foothold in cloud, the company might not invest in more hardware until 2013 for online back up until demand swells up. “We registered healthy bottom lines in cloud due to minimal zero investment in this business model,” says Vahi.

The 500-plus customers for online back up includes eighty percent of existing clients, he adds.

Compton Computers with its unconventional idea and high risk appetite made “Gold out of  Scrap.”

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