Delivering Online Backup Services – Best Practices

To activate service you will need to deliver the Client or Agent to your customer and open an account for him on the server. This can be done as two separate actions, one manual and one automatic, or it can be done with full automation.

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.


Full automation is usually the goal for services at a low price point. Partial or “no” automation is the goal for services at the higher price points.

Please see the chapter on “Automating Your Online Backup Service” for technical information on how to fully integrate your service with your web site.


Methods for Full Automation

Full Website Integration and Automation

(Order at a web site, pay with a credit card, download software immediately, recur billing automatically.)

This is the most popular method of automation. It requires the least amount of money to start up, your recurring billing is automatic, and it requires the least amount of manual intervention. Here’s how it works.

A customer visits your web site and reads about your service. He goes to a shopping cart page containing several options for service plans. Maybe some plans have higher storage quotas, or are designed for Personal or Business use. There are usually different prices with discounts for paying in advance for longer terms of service.

The user selects the plan he wants and the term of service. The three choices for term are usually one month, six months, and one year. The user enters his personal information and pays online using a secure order form.

Payment methods are usually limited to credit cards, but some services allow PayPal and other payment methods. Credit cards are usually billed in advance for a period of time, and the payments automatically recur.

After the web site approves the charge, it offers the user a link to download the software, and it might (depending on the design of the website and server software) create a user account on the server and issue a serial number, which will tie the user and his software to his account.

The user installs the software, and can begin using his account immediately.

The shopping cart used here can be outsourced to a company like, or it can be built into the website by your web designer. My company has two products that can fully automate an online sales, deployment, and billing process for Online Backup. For information on the Web Manager and E-Commerce PlugIns, see this link and this one.


Full Web Integration with Trial Accounts

(Download trial-account software from a website. At the end of the trial period the software lets you enter a credit card number to activate a live account and start recurring billing.)

This works exactly like the first method, except that it usually has a much lower storage quota to start out, and requires no payment for the service up front. Rather, it collects a minimal amount of information from the user and deploys a free trial account for a period of time, usually fourteen to thirty days.

The two PlugIns mentioned above can fully manage automated Trial Accounts.

Near the end of the trial period, the software might begin displaying reminder messages, and the customer will begin receiving emails. At the end of the trial period the account will be frozen until the user pays for it or uninstalls the software.

When the software is uninstalled, the server will schedule the account and its data for deletion within a period of days, usually seven. If the account is frozen without the user uninstalling the software, the server will schedule the account and its data to be deleted for a much longer period of time, usually thirty days.

With the software still installed, the user is still receiving messages, so there is a much better chance he will decide to active his account.

When an account is deleted, the server will stop sending emails to the customer, or better, it will move the customer’s email address to a follow-up list and begin a series of “Why didn’t you sign up for our service?” emails.

If customers sign up for a live account, the payment and billing process works exactly like my first example.

The industry is currently split on the efficacy of trial accounts. Some say the rate of conversion to live accounts is less than 15%, and that offering trial accounts can actually reduce ROI. Trial accounts use up more drive space and bandwidth and increase tech support burden.

Other arguments against offering trial accounts are psychological. They allow customers to get away from your hard-selling website with a freebee and plenty of time to compare you with other services. You want to be the LAST website a customer looks at, not the first. Little pop-up messages can’t sell as hard as a website can.

Offering a free trial and no commitment from users could cheapen your service, and is recommended only for the low-end Personal market.


Full Web Integration with Retail CD, No Pre-Pay

(Pick up a CD at a retail store, pay for it at the counter, install it, no credit card required.)

Some Online Backup companies have distributed shrink-wrapped CDs at retail locations. The CDs contain the Client or Agent software and have a serial number on a sticker inside the box.

There are several benefits to using this method. This is often an impulse purchase, especially if the point of sale display is really great, and the retail location services computer buyers or others making substantial retail purchases.

Another benefit is that this method does not rely on the Internet. Customers who purchase a CD are not on the Internet at the time. The point of sale display and the CD boxes should have the Service Provider’s web address in big, easy to remember letters so they can also serve as an advertisement for customers who might remember the name later when they are on the Web.

Customers buy the CD at retail, the price of which is for a specific term of service – six months, one year, two years, and longer. They install the software from the CD, enter the serial number from the sticker, and are automatically signed up for an account. This method can operate with and without a web site.

At the end of the subscription term the software has the same end-of-subscription behavior that I described in the first two methods.


Full Web Integration with Free CD

(Pick up a free CD at a countertop display, install it, pay online with a credit card, recur billing automatically.)

This is like the “retail CD” method but it can be used to distribute trial accounts. At the end of the trial period the software has the same end-of-trial behavior I described above.

A variant of this method is for the Service Provider to give (free of charge) the CDs to retailers, who then sell them for a pre-imprinted price. Each CD with serial number is good for a free one month (two months, three months) subscription, after which the software starts hounding the customer for his credit card number.

Retailers like this because they get 100% profit with no investment in inventory. Service Providers like it because it captures off-Internet customers who might not have otherwise heard of them, it give customers a longer trial period (more time to get hooked on the service), and it gives Service Providers valuable retail shelf space for the advertisements on the packaging of the CDs.


Retail Gift Card

(Buy a gift card with a printed serial number hidden by a scratch-off area, pay for the card at a retail counter. Go to the website printed on the card, type in the serial number, download the software, no credit card required.)

This method can be used both for installing a new account and extending an existing account using a payment method other than credit cards and PayPal. Because the financial transaction takes place at a retail counter it even works with cash and checks.


This method works a little like the “retail CD” method. Instead of a CD, the retail outlet sells a gift card containing a serial number behind a scratch-off section similar to some of those used by wireless telephone carriers to recharge pay-as-you-go phones.

Users purchase the card, go to a web site, and type in the serial number. If the software is not yet installed it is downloaded and installed. An account is activated for the subscription term on the card.

If the software is already installed, the existing subscription is extended for the term on the card.


Partial or No Automation

(Partial (or no) automation is used most often for higher priced business services requiring personal in person service.)

Many Service Providers who service business clients personally install and configure the Client software during an on-site visit. They can charge more for their service in part because of this kind of personal service.

Using no automation means that a technician visits the customer’s site with a CD or memory stick to install the software. The technician installs and configures the software. During a consultation with the customer, he selects files, sets file retention protocol, creates backup sets, defines schedules, and tests the system before leaving.

Please refer to the “Best Practices” chapter for more on on-site installation procedures.

Without automation the technician may have to pre-register a customer’s account with the server, set up billing, and manage the account manually.

The Service Providers with the highest ROI (Return On Investment) use no automation. They spend the least on infrastructure, charge the highest prices, and often serve a small exclusive market. They are often boutique services operating only locally or regionally.

Please see the chapter on “Automating Your Online Backup Service” for technical information on how to fully integrate your service with your web site.


Rob Cosgrove

Rob Cosgrove, CEO Remote Backup Systems

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, and at bookstores.

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

Would you like a FREE download of the complete Online Backup Guide for Service Providers as an E-Book? Only 200 available through May 15. [PICK THIS LINK].

About The Author

Rob Cosgrove /

Rob Cosgrove is President of Remote Backup Systems, developers of the fully brandable RBackup Online Backup software platform, powering more than 9,500 Service Providers, MSPs and VARs wordwide since 1987. He is the founder of the Online Backup industry and author of several books, the most recent, "The Online Backup Guide for Service Providers", available at and bookstores.