Channel Insider content and product recommendations are editorially independent. We may make money when you click on links to our partners. Learn More.

Managed services in general, and in the cloud, specifically, are attracting the interest of small-medium businesses, according to a new study from AMI, and a number of vendors are looking to tap into this growing market. Although the study doesn’t break down the current size of the opportunity, it does say that SMB annual spending on remote managed IT services is expected to more than triple in the next five years, and that’s a very attractive opportunity for 3X Systems and the channel, says founder and CEO Alan Arman.

Previously a provider of offsite data backup and recovery services, Arman says there is huge demand but there are problems with the traditional solutions — they’re unreliable and subject to human error. According to his data, 77 percent of businesses which test their internal backups regularly "found they were unable to fully recover their data."  Throw in manual processes and the situation worsened: 78 percent of IT managers cite human error as the reason for backup failure.

Other problem areas include the proliferation of laptops — security and backup — remote offices, and lack of control and access. Most solutions force customers to select either local or remote backup, but not both. Or, the remaining online exceptions are too expensive for SMBs, he says.

The optimal solution, contends Arman, is automatic offsite backup that is simple, secure, fast and inexpensive. On Tuesday 3X will roll out its line of portable Remote Backup Appliances (RBA) that enable businesses to deploy a private backup cloud that combines high speed on-premise backup with online remote backup without monthly recurring fees.

"We’re providing an appliance solution that is completely inclusive of all hardware and software," says Arman. However, while targeted at SMBs, the solution was designed with enterprise features, especially security. High-end features include deduplication, block level backup, and common file elimination.

Sold only through the channel, the appliance will enable users to perform their initial backup on premise using the local network, then move the device offsite for continuous remote data protection and disaster recovery. With its patent-pending locator service, the RBA automatically connects to and backs up data from servers, desktops, roaming laptops and remote offices, regardless of the physical location of these endpoints or of the appliance itself.

The company currently has 160 partners in North America but hasn’t been in active recruitment mode, says Rocky White, director marketing and sales. The SMB market is really fragmented and 3X offers its partners three ways to sell to their customers: as a standalone product; the product bundled with service and support; or as a service, with the customer’s appliance connected to the partner’s own cloud.

"A lot of SMBs are really concerned about data going to the cloud," says White. With this third offering, the partner can be the cloud owner and the customer can be assured that their data is secure locally.

The RBA stores data on a physical appliance that is owned and controlled by the business. All data on the device is protected by HIPAA Compliant 128-bit AES encryption with digital access keys, hardware signatures, IP filtering, and hierarchical permission levels of administrator authorization. Remote backup sessions are secured using SSL encryption at both ends of broadband connections to prevent data theft.

Throw in ease of use and pricing, and it’s very attractive to the channel, he says. "Partners don’t have to spend a lot of time going through training and certification. It’s very easy to use and they can start generating revenue right away."

White has been in the channel business for 20 years and understands it’s not enough to have just a great product. The company has put resources in place to support partners in both pre and post-sales efforts and help them start generating revenues right away.

There are three levels of authorization, all based on revenues, and providing different benefits, including margins. Authorized partners for those with the least involvement with 3X, and can earn margins of 18 percent. Premier margins range from 25-30 percent while Elite partners can earn from 30-38 percent.

The company is in the process of recruiting partners and has focused on making it as easy as possible to sign up, says White. The market is looking for an affordable solution that handled both local and online backup. "We see huge demand in the SMB market."

3X RBA capacity ranges from 100GB to 2TB of backup space, with a 6TB model in development. Pricing starts at $2,495 and includes an unlimited number of endpoint licenses and a year of unlimited technical support and software upgrades.