The History of Online Backup

I am the guy you can blame for this. I invented Online Backup in the mid 1980s.

The Online Backup Guide for Service Providers is a complete 196-page guide on starting and operating an Online Backup Service – the latest revision of Rob Cosgrove’s industry defining RBS Book originally published in 1987. The entire book is being published here, chapter by chapter.

It started out as an experiment in the days of 300 baud telephone modems to see if I could speed up data transmission by compressing data on one computer, transmitting it in its compressed state, then decompressing it on a second computer.

The computers were Kaypro portables, and the modems were acoustically coupled. We would place a telephone call, put the telephone handset into the modem’s cradle, and hope they talked to one another.

What I learned was important – I could effectively increase the throughput from 300 baud to five times that speed by compressing the data, with no data loss, while storing and retrieving the data over the modems.

Years later I took two of these old telephone modems apart and used them to build an apparatus to do the world’s first Remote Backup over tin-cans-and-string.

The first real world data recovery from a Remote Backup took place in June of 1985. A few weeks earlier I had, at the request of a friend who worked in a hospital’s prenatal unit, installed a rudimentary Remote Backup system that used some scripts and FTP to send the hospital’s data through telephone modems to a computer at my office.

My friend phoned me the morning after a particularly nasty lightning storm and told me the bad news – the prenatal server (a small Netware Server) had been destroyed by a lightning strike, along with its important data. He wondered if those backups had been running.

It turned out that they had. In fact, the most recent backup had ended just thirty minutes before the lightening strike. By 5PM that same day we had a new server in place and all the data restored. Not a single byte was lost.

I offered the same service to a few other people, and word spread about Remote Backup. This gave me the idea for a commercial software product and a business opportunity. To test the idea, I wrote the first edition of The RBS Book: How to Start and Operate a Remote Backup Service. It sold a few copies and interest kept building as readers asked for more information, more guidance, and software.

Magazine editors started calling. I went on TV and radio to discuss Remote Backup. Finally, I decided that there might be something to this whole “remote backup” thing. I took the time to design software to operate the service, and started selling it. That was in 1987 – version 1.0 of RBackup. It sold for $99 with no limit on the number of clients.

A year later a Canadian company came out with a product that did Remote Backups. It cost $125,000. They didn’t sell very many.

In the subsequent years RBackup went through many revisions. Features were added as times and technology changed. Windows, the Internet, and the Web were born. Service Providers suggested upgrades and new features that made RBackup better.

I experimented with ways to prove the technology. I did the first remote backup from an airplane, a sailboat, a cell phone, and an erupting volcano. I moon-bounced a backup packet using amateur radios. It didn’t restore, but at 476,000 miles, I was happy just to hear it come back!

I used a portable satellite ground station, the DirecPC Internet service, and an Iridium satellite phone to do a backup and restore through three different satellites at the same time – three round-trips to space – more than 88,000 miles, and still the world’s longest Online Backup and restore.

1994 saw my first real competitor in my price range. A company called Novastor liked what they saw in the new market and modified an existing network backup product to run on the new Internet. They called it Novanet-Web, and it is still around.

So, in 1994 there were three companies selling software designed to operate Online Backup services. There were hundreds of small companies, mostly customers of mine, offering the service. Most of them were small Internet Service Providers (the only kinds of ISPs there were back then) computer shops and independent computer consultants working from home.

The industry grew.

During the 1990’s dotcom boom several companies came online with millions in venture capital and their own home-grown software. They offered Online Backup for free, in an effort to garner “market share,” a marketing tactic that proved fatal for most of them.

One of these now defunct companies called DriveWay even bought a spot during the Super Bowl. Their spokesgoul was a character named Lord Insidious. I don’t remember much about Lord Insidious. I remember watching that commercial, though, and commenting that DriveWay had finally jumped the shark, and I wouldn’t have to worry about them for much longer. Their domain name was eventually bought by iDrive, who would become my fourth competitor.

Now remember – by “competitor” I mean a company who provides Online Backup software meant to be used to offer commercial Online Backup Services (called Service Providers) to clients. By definition, the software includes both server software and client software.

Some Online Backup software companies also offer Online Backup services to the general public, which is considered bad form because it competes directly with their customers, often at prices their Service Provider customers cannot match

Service Providers who do not also sell their software to other Service Providers are not considered competitors, but I’m going to talk about them because they’re an important part of the landscape.

The first successful large scale Online Backup Service was born in Pleasant Grove, Utah in 2005. Mozy was started with $1.6M by storage genius Josh Coats, who already had an impressive track record.

With a really cute Web 2.0 name, and virtually no traditional advertising, Mozy grew quickly because of two things: Their completely irrational $4.95 per month price for unlimited backups, and their non-traditional advertising methods.

Mozy first gained traction on the then-new social networking scene by paying bloggers to write nice things about them. This included outright cash payments for endorsements that sounded truthful, and progressed into a lucrative affiliate program where bloggers could post a link to Mozy and have their sales automatically tracked. So, Mozy was paying for a lot of testimonials – not exactly kosher.

The Mozy service itself was ho-hum. The Client was clunky, and the restore process was an absolute mess. They fixed those problems in later years.

Mozy’s slightly younger brother was born in 2006 across the country in Boston. Carbonite was founded by David Friend, a serial entrepreneur who promoted his company in more traditional ways. Carbonite had a similar price structure and unlimited backups.

David took a very public and personal interest in his company’s advertising and promotion. He had a habit of personally responding to blog entries about Carbonite, sometimes writing long responses as comments.

The first Carbonite software was better than Mozy’s. Restoring files was easier, and file selection was automatic.

Today Mozy and Carbonite are the two most recognized names in the Online Backup business in the USA. They both support Windows and Mac computers, and they both have a Personal version with “unlimited” backup space for a low price, and a more expensive Business version sold by the gigabyte.

Then in 2007 a bombshell landed on Pleasant Grove, Utah.

With very little warning, the huge storage company EMC bought Mozy for a whopping $76M. This huge deal took almost everyone by surprise. I spoke with many industry analysts who were scratching their Treos over this one. Mozy had been founded only 18 months earlier with a market cap of only $1.6M.

Other than the size of this deal and Josh Coates’ excellent leadership at Mozy’s helm, there was nothing extraordinary about Mozy (the company), their software, their service or their business model. They didn’t have their own data center, they had little experience in the market, and they were using a business model that has been tried and failed before – MANY times.

Remember DriveWay? FreeDrive? No? Neither do most people. They dropped out of existence along with dozens of others using the same business model back in the 90s.

So, why did EMC spend such an unbelievable amount of money for Mozy, and why now? According to the grapevine, highly placed spokespeople inside EMC said the answer was as simple as this: EMC wanted a share of the Online Backup business, and had some research indicating the market was a time bomb with a short fuse, oh, say as short as six to twelve months, after which time Online Backup would become the default method for backing up most microcomputers. (This time line would later be delayed by the Big Recession of 2008-2009.)

I expected the Mozy acquisition to trigger a land grab among large storage companies who didn’t already have an Online Backup solution. I was right, and many storage companies bought up smaller Online Backup providers within the next few months.

For the previous 18 months I had watched Online Backup Service Providers grow by leaps and bounds. The number of potential customers seemed limitless, they didn’t seem to be price conscious (within limits) and in the light of MySpace and FaceBook they were very quickly becoming comfortable storing their personal information online.

Regardless of how Mozy built its $76M worth of perceived value, EMC’s acquisition was very good news for the Online Backup business, and for service providers, new and old alike. It showed that the Online Backup industry, which until now had been the red headed stepchild of the Storage industry, was about to join the adult’s table.

If Mozy could do this with ho-hum software and an unimaginative service, imagine what could be done by others with full featured software and more experience in the marketplace. Online Backup was on the cusp of its evolution into the preferred way to back up microcomputers and their networks, and Online Backup service providers were finally in the right place at the right time.

Between 2007 and 2010 the industry evolved. Online Backup Service Providers added more features to gain competitive advantages – features like file sharing and web access to backed-up files. Prices for Personal Online Backup Services dropped, and everyone in the business gained new customers.

A few companies tried to match Mozy’s and Carbonite’s “Unlimited backups for $5/month” plans. Carbonite attracted (as of this writing) $67M in venture capital in several rounds of financing. Mozy, previously absorbed by EMC, was rolled up into a new company called Decho.

Both companies came out with rudimentary products for the Mac.

By the end of 2009 the general public, only a year earlier very leery of storing their data online, came to accept it as safe and private. For the first time in history, Online Backup Service Providers were gaining new customers simply because people phoned in and asked for the service.

Until then, Service Providers sometimes had a tough job of selling the service because of privacy concerns, and because it was hard to convince end users that their hard drives were not immortal.

Also by this time many personal and business computers had been in service for five to ten years, and were starting to fail with catastrophic consequences. So, the necessity of doing proper backups hit the consumer news more frequently. By this time everyone knew someone with a data loss horror story.

During this time there were also many high profile news stories about massive losses and thefts of data on hard drives and tapes, including national secrets, credit card numbers, and even nuclear secrets. These stories helped promote the Online Backup business as a way to safeguard important data.

In 2007 two other of my competitors came on the market with hastily assembled software built out of Open Source modules they downloaded from the Internet. One popped up in China, and the other in India. Neither will communicate with me (after years of trying), and both are private companies, so I know little about them.

I DO know a lot about their software, however, since I buy it at least once a year to make sure I can talk about it with authority.

The Online Backup business started in the United States, but there are now more than 8,500 Service Providers using my software (RBackup) in sixty-four countries, with an estimated 2.5 million clients. This is more than the combined clientele of all of my competitors (whom I wish warts well, of course, even if two of them won’t return my calls)

In late 2009 I released what I think will be the next generation of Online Backup technology. Until then RBackup had been my only Online Backup platform. It contains features designed primarily for the Business market, although it is flexible enough to be used in the Personal market as well.

However, it wasn’t as easy to operate, configure, and install as Mozy or Carbonite. I needed something to leapfrog both of them. After more than a year on the drawing board, I released my Mercury Online Backup Platform.

Mercury runs on Windows and Mac, and is designed for inexpensive consumer backups. It is not designed for business use. Mercury is available in twenty languages, and is localizable. It runs on all versions of Mac OS-X and Windows 2000 and above.

Some of Mercury’s features include automatic updates, continuous backup, scheduled backup, web-based distribution, trial versions, web restore, fully integrated web payment and software deployment, the ability to store customer-defined metadata, and the amazing and exclusive Remote Security Suite.

The Remote Security Suite can remotely erase sensitive data from a stolen computer. It can also take pictures and record sound, and send technical details with geo-location information that can help locate and recover a lost or stolen computer.

Mercury has everything Mozy and Carbonite have, and more. Its innovative database-driven storage technology is more robust, faster, more redundant, a MUCH safer than either Mozy or Carbonite.

The Mercury platform became a success for use on laptops and workstations, and for the first time allowed other companies with far less capital than Mozy and Carbonite to compete with them at their own price point.

Rob Cosgrove is the President of Remote Backup Systems, founder of the Online Backup Industry, and a vocal advocate for maintaining the highest standards in Online Backup software. His latest book, the Online Backup Guide for Service Providers: How to Start and Operate an Online Backup Service, is available online now, on Amazon.com, and at bookstores.

Remote Backup Systems provides brandable, scalable software and solutions to MSPs and VARs enabling them to offer Online Backup Services.

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