Brand Leaders’ Advertising Efforts Help Everyone
A Rising Tide Lifts All the Boats – JFK, 1960
Coca Colaâ„¢ is the world’s most recognized and valuable brand. You’ve seen their commercials on TV and their ads on radio and in print. The 123 year old company makes $5 billion per year in profits. This is up significantly from their first year, which showed a $20 loss on $50 annual sales from an average of 9 servings a day at Jacob’s Pharmacy in Atlanta, GA in 1886.
Within the next few years there were hundreds of competitors, including Pepsi Colaâ„¢, which started out as “Brad’s Drink” in 1893 at Caleb Bradham’s soda fountain in New Bern, NC. Today there are hundreds of thousands of competitors.
Various studies have shown that when high-profile brands like Coca Cola and Pepsi launch big advertising campaigns, sales of competitive products in the same sector also increase as a result.
And this brings me around (finally) to my point. Like the soft drink business, the Online Backup business has a lot of players. Only two of them are spending a substantial amount of money on advertising.
Carboniteâ„¢ spends a million dollars a month. Nobody outside EMC knows how much Mozyâ„¢ spends, but I assume it’s at least half as much as Carbonite. So, here we have $1.5M a month being spent to raise public awareness about Remote Backup, by companies whose solutions are capable of addressing only a percentage, maybe 30%, of the market.
This leaves the other 70% still looking for a solution for their servers, Exchange, SQL Server, in-person consulting, versioning, high security, and all the other things that high-end service providers can offer with Remote Backup Systems‘ products, and Mozy and Carbonite cannot.
It’s probably too simple to say that they are spending 70% of their ad budget ($1.05M a month) advertising for you, but it fits nicely in this spot. I will leave it here.
The online backup industry is one of the very few who are thriving during the recession, and perhaps in part, because of it. As IT budgets are cut, companies are looking for cheaper alternatives to buying large drive arrays, building out data centers, and doing backups themselves. In many cases, it is cheaper to simply outsource their backups.
Add this to all the media buzz about “cloud” storage, the millions being spent on advertising by two vendors, and the underlying upswing in the business simply because “our time has come,” and you get a rising tide that lifts all of us.
Here at Remote Backup Systems we are seeing a dramatic increase in the number of sales for additional client seats. This indicates that our service providers are attracting more business.
Carbonite is hiring. They’ve been advertising for employees for the past six months. They’ve been able to raise $47M in venture capital in the past 3 years from smart people who are willing to bet a fortune on online backup.
A spokesperson for EMC (Mozy’s parent company) said that while EMC plans to cut 2,400 jobs in 2009, the Mozy division is adding employees.
I’ve spoken to dozens of RBS service providers who see the same signs as I do, and are gearing up for more business – buying more bandwidth and hardware, adding employees, and buying more client seats.
It’s a good time to be in the online backup business, and it will only get better.