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Online Backup Booming
Services for online backup are the SSP success story
November 19, 2004
3 Min Read
A handful of companies specializing in online disk backup claim the market for their services isn't just growing, it's booming, thanks to companies' burning need to be rid of backup headaches.
This might surprise observers who consigned the storage service provider (SSP) model to the dustbin of industry history a few months back. Indeed, it looks like online backup, wherein companies offer disk-based storage on their own or others' facilities for remote backup of data centers, may be the chief success to come out of the general SSP malaise. Consider the following:
AmeriVault Corp. claims to have "upwards of 500" customers, and marketing director Scott Bush says the market has been steady, not erratic. "We've seen no less than 25 percent growth per year in our six-plus-year history," he says.
IPR International LLC is about to close $10 million in first-round funding. The online backup service provider also announced in October that ATX Communications Inc., a local exchange carrier in the Mid-Atlantic and Midwest U.S., will be reselling its services.
LiveVault Corp. claims revenue grew 226 percent year over year for the third quarter of 2004, and spokesman Jim McManus says the amount of new data the company took on last quarter exceeded what it protected for the first two years it offered the service. LiveVault claims to manage more than one petabyte of data.
These aren't the only online backup providers claiming to be on the move. Arsenal Digital Solutions Worldwide Inc. and EVault Inc., among many others, say business is better than good.
Table 1: Selected Online Backup Service Providers
Company | HQ location/Year founded | Funding | No. employees (approx.) | No. customers (approx.) | Resellers |
AmeriVault | Waltham, Mass./1998 | $7M | 30 | 500 | Compaq, HP, Sungard |
Arsenal Digital | Cary, N.C./1998 | $86M | 80 | 850 | AT&T, NTT Verio, others |
EVault | Emeryville, Calif./1997 | $22.7M | 130 | 5,000 | N/A |
IPR International | Conshohocken, Pa./2002 | $8.3M | 35 | 70 | ATX Communications |
LiveVault | Marlboro, Mass./2001 | $25M | 50 | 1,500 | Compaq, HP, IBM, Iron Mountain |
At least one analyst says the online backup providers are doing better than other segments of storage services, thanks to the sheer pain relief they offer: "Backup is one of the most onerous tasks of any IT department, and it's typically assigned to the most junior person," says Adam Couture, principal analyst at Gartner Inc. Ironically, companies who've resisted outsourcing the management of their primary disk storage, he says, seem less chary of handing over backup duties.
Also helping the online backup providers is a complex series of partnerships, wherein they often sell one another's services to bring up volume and cover more markets and geographical regions. This smart approach enables them to sell their services indirectly, avoiding the astronomical cost of sales that have hobbled other SSPs.
But he cautions against having too enthusiastic a view of this market. While most online backup providers say they're growing at over 100 percent annually, that's usually from a very small base. Since most are privately held, it's nearly impossible to judge the financial reality of their claims. But Couture says he's skeptical that one has yet broken $20 million in annual revenue, though he notes that several claim they will do so this year.
Mary Jander, Site Editor, Byte and Switch
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