Free Cloud Storage: Customers Get What They Pay For


While free online storage or free online backups may sound sweet to small businesses looking to make the best use of their limited budgets, the reality is that the cost of a properly managed, fully compliant backup is worth far more than its cost.

That's the word from providers of cloud-based storage and backups that every day deal with clients who are attracted by the lure of free storage but who may not understand the potential ramifications of trusting their precious business data to technology more targeted at consumers looking to back up photos and audio files.

Cloud-based storage, whether used for backing up data, adding disaster recovery, or even storing primary data, is becoming a major part of the IT business.

Analyst firm IDC in October estimated that spending by public cloud service providers on storage hardware, software and professional services will grow at a compound annual growth rate of 23.6 percent from 2010 to 2015. IDC also expects combined worldwide spending for public and private cloud storage to hit $22.6 billion by 2015.

As a result, traditional solution providers and managed service providers have found a wide range of technologies from a variety of developers that make it easy to add cloud storage to their line cards with a minimum of investment.

However, channel partners who work with SMBs looking toward the cloud to protect their data often run up against competition from a growing host of companies that provide cloud-based storage, backup, and disaster recovery services at no charge.

Many providers of free online storage have their roots in the consumer market where the typical user may be using the service to store and share photos, videos and music files. Some also provide the ability to back up or collaborate on business documents. And, for many of these providers, the free storage capacity is limited and is focused on getting potential customers to try the service before upgrading to a paid service.

For many SMBs, a free service for protecting data is a welcome way of taking the pressure off IT budgets.

However, said Luis Alvarez, president and CEO of Salinas, Calif.-based solution provider Alvarez Technology Group, such a move would be a mistake for small businesses.

Alvarez said that when customers talk about free online storage, or cloud storage for $30 per year, he responds by pointing out the limitations of such services, including no protection for SQL or Exchange data, no unlimited backups and no backups of open files.

"We also tell customers we can't be responsible for their backups when using a free service," he said.

The idea of a customer trusting its precious data to a free online service is actually quite scary, said Matt Bernard, CTO of One Click Technology Group, a Warren, Ohio-based provider of IT services to small businesses.

"For no exchange of anything, I'm going to trust you to back up my data?" he said.

Bernard said he reminds customers that when a product is free, they are no longer really customers of the provider. "The providers have to be making money by selling your data, or marketing to you," he said.

Bernard said that whenever he hears about a free storage cloud service, his first question is how and why the provider does it.

Next: Understanding The Limits Of Free Cloud Storage