EMC's $76 million acquisition of Berkeley Data Systems, the American Fork, Utah-based developer of the technology behind the Mozy online backup business, is the latest move by tier-one storage vendors to move into the on-line backup market, and shows the increasing importance of the technology.
However, for as much as Mozy's competitors applaud the acquisition by EMC, they are quick to remind customers and solution providers that there are alternatives out there.
David Friend, CEO of Mozy competitor Carbonite, a Boston-based provider of on-line backup services, said the $76 million EMC spent on Mozy was a good deal.
"It's expensive to build the infrastructure, to make it work and scale," Friend said. "To handle thousands of Tbytes of data is not easy. The complexity goes up as a square of the number of users. Mozy has been around, like Carbonite, for some time, and has worked the bugs out. EMC would need two years to do it themselves."
Actually, Friend said that Mozy sold out way too early. "I would never have sold out of $76 million," he said. "If they had waited a couple of years, with the growth of IT outsourcing, they could have added another zero to that."
Adi Ruppin, vice president of marketing for BeInSync, a San Jose, Calif.-based on-line backup service provider, said that Mozy did a good job of marketing itself. "Obviously, on-line backup is a hot thing," Ruppin said.
BeInSync is unusual in that, unlike Mozy and Carbonite and many others in the market that have built their own data centers for their core business, it decided instead to use Amazon's S3 on-line backup infrastructure.
"If we had started 18 months ago, we probably would have built our own data center," Ruppin said. "But since then, Amazon has made on-line backup a business, and is making on-line storage both reliable and cost-effective."
In the 60 days since BeInSync started working with Amazon, it has had tens of millions of files uploaded without a glitch, Ruppin said. Amazon replicates its data in different places, which allows a company like BeInSync to focus on its own features, such as continuous data protection (CDP), which allows customers to keep an unlimited number of data snapshots, he said.
BeInSync offers its services direct to customers, but also has an OEM, affiliate, and reseller program. Resellers who sign with BeInSync can purchase discounted licenses, Ruppin said. The company is also gearing up to provide more capabilities to managed service providers, including the ability to remotely administer on-line backups, he said. BeInSync bills customers on an annual basis, and offers its resellers the opportunity to participate in renewals, he said.
BeInSync offers several levels of services. Home consumers can access up to 1 Gbyte of storage capacity, with backups, sharing, and remote access, free of charge.
The company also provides a pro version for small businesses and professionals that travel a lot, Ruppin said. The pro version is priced at $60 per year and includes 5 Gbytes of capacity. Customers can upgrade to 50 Gbytes for an additional charge.
This compares to Mozy's MozyHome version, which offers consumers 2 Gbytes of online storage capacity free-of-charge, and charges $4.95 per month for unlimited storage capacity. The technology includes open and locked file support, 128-bit SSL and 448-bit Blowfish encryption, automatic backups based on the customer's schedule, automatic backups of changed files, and block-level incremental backups.
Mozy also offers MozyPro to small businesses, and includes private encryption key options, near continuous data protection (CDP) to backup new and changed files every two hours, bandwidth throttling, snapshot support, and support for Windows Server 2003 and Windows 2000 operating systems. It charges $3.95 per month for a license for each computer to be backed up, plus 50 cents per Gbyte per month.
Both Mozy's and BeInSync's pricing models contrasts to that of Carbonite, which has a single offering of unlimited capacity for $50 per year, Friend said. Offering capacity for free is just not a good business model, he said.
"Mozy was offering 2 Gbytes of capacity for free, but has been backing away from it," he said. "They have buried the offer where people can't find it. With free, paying customers have to subsidize non-paying customers. It's hugely expensive. And the conversion from free to paying is poor. There are a lot of people who only take it if it's free. And who wants customers like that?"
The free model works for businesses like Woburn, Mass.-based peer-to-peer vendor LogMeIn.com, or Skype, because the cost of adding an additional user is nil, Friend said. "But that doesn't work with storage," he said. "If the product has a real incremental cost, the free model looks pretty bad."
Carbonite currently has over 100,000 customers, about half of which signed up via its 400-or-so resellers, who resell the service, and affiliates, who get a bounty for each copy sold, Friend said. Most of the resellers are mainly small outsourcers or break-fix shops who work with schools or small businesses. "They go in and say, you need to protect your data, Carbonite is simple, let me install it for you," he said.
Carbonite markets its services using endorsements from celebrities such as Howard Stern, Bill O'Reilly, and Kim Komando. "We find that that kind of endorsement helps get over the question of, who is Carbonite," Friend said.
EMC's acquisition of Mozy is only the latest in a line of major storage vendors to offer online backup services, either via partnerships or, more common, through acquisitions.
Hard drive vendor Seagate last December acquired online backup developer EVault to go after the small business data protection market for $185 million. EVault recently unveiled its new EVault Unified Recovery platform, which now includes such features as data deduplication, replication of data to a secondary site for disaster recovery, and data self-healing capabilities.
Other storage hardware and software vendors who have recently moved into the online backup market include Hewlett-Packard, Dell, Iomega, and Symantec.
In addition, several small vendors are also targeting the online backup space, often with a channel model that allows solution providers to either resell the services hosted by the vendor or host the services themselves.