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Earlier this month, the mammoth financial services company Citigroup had to make the embarrassing admission it was missing a backup tape with confidential records of almost 4 million people.

The tape, containing Social Security numbers and customer transaction histories, seems to have disappeared from a UPS truck on May 2, according to Citigroup.

Proponents of data replication technology say such a compromising incident would not have occurred had Citigroup been using replication technology as opposed to backup tapes.

One such proponent is high-performance data-transport vendor NetEx (Network Executive Software Inc.), of Minneapolis, maker of an appliance that accelerates the data replication applications of such vendors as EMC Corp. and Veritas Software Corp.

With data replication, large enterprises can protect their intellectual property, sensitive customer information and lots of other data without having to use backup tapes. NetEx technology makes replication more efficient by accelerating it, said Bob McIntyre, NetEx vice president of business development and marketing.

“The message is simple: We’re shielding our customers from network data interruptions,” he said.

NetEx traditionally has sold its technology directly to large corporations, but now is looking for a few good VARs with expertise in selling high-end storage networking solutions, said program manager Steve Pheneger.

The company this week is launching its HyperChannel reseller program with an eye to engaging VARs and integrators experienced in selling and servicing replication software from such vendors as EMC Corp. and Veritas Software Corp, Pheneger said.

Click here to read more insight about compliance from columnist John Moore.

Spun off from Storage Technology Corp. about six years ago, NetEx is the maker of an IP-based appliance, called HyperIP DRO, that speeds up data replication.

In so doing, HyperIP significantly reduces the time to share large amounts of information between corporate locations, according to the company.

Because the appliance is IP-based, it eliminates the complexity and expense of FCIP (Fibre Channel over IP) solutions, without hindering performance, Pheneger said.

Benefits to resellers for joining HyperChannel include the upfront profit of selling the solution, recurring licensing fees for service and support and the potential for additional revenue as the companies using the technology grow and need to boost their bandwidth to handle more data, Pheneger said.

“It’s not just, I sell the product today and walk away,” he said. “It’s a solution that continues to pay royalties, if I can use that term, to the resellers as the customer grows.”

Marc Staimer, president of Dragon Slayer Consulting, said he thinks HyperIP DRO is a good product for the channel.

“It is easy to set up, easy to use, and easy to manage. It provides excellent visibility into the network, and it enables VARs to provide data migration services at an excellent margin,” he said.

The appliance addresses the need of any large company for disaster recovery, business continuance and the need to share information between locations, said Pheneger.

While the company so far has focused on the largest of enterprises, namely the Global 500, with the help of the channel NetEx hopes to penetrate the Global 10,000, said Pheneger.

Potential competitors include storage-product vendors such Hitachi Data Systems, SunGard, IBM and DataPeer, although Staimer has said NetEx has an advantage in its ability to eliminate bottlenecks during replication across the WAN.

The company decided to turn to the channel after taking a cue from such successful vendors as EMC and Veritas (recently acquired by Symantec Corp.), which use partners to expand their market reach, he said.

So far NetEx has enlisted fewer than 10 VARs, one of which is in Minnesota and another in Ontario.

The others are in Europe, Middle East and Asia, Pheneger said, adding that the company is interested in recruiting a limited number of high-quality VARs and integrators with the requisite networking and storage background.

The company is offering support and education, including an online seminar, to help resellers get up to speed quickly on the technology.

“Demand is being driven by the increased emphasis on disaster recovery, business continuity and data migration,” he said.

“The first two are a direct result of the much more demanding regulatory environment from Sarbanes-Oxley, HIPAA, etc. The third is being driven by the ongoing exponential growth in data and storage as well as regulations, which means new storage and ongoing data migration.”

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