Online Backup Service vs. In-House Backup

The key challenge for data backup activity at SMBs (Small and Medium Businesses) is that if there are existing backup processes in place, they are usually not performed regularly and are done in such a way that does not fully protect the organization.

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.

Copying data to CDs/DVDs or tapes that are left on premises only insures that some data will be available for restore if the backup media is accessible after a data loss event – and if this data is taken offsite it is usually unencrypted, making it available for viewing and use by virtually anyone who might acquire it.

Fires usually destroy backup media that are left onsite, and in many cases the affected premises are off-limits to everyone for many days after a fire or other disaster.  Proper backups are done automatically, at non-peak business hours, are securely encrypted, are available for restore at any time, and are taken offsite – every night.

The time and processes spent verifying backups are also a critical component in any backup plan.  The worst time to discover that backups are not current, or that they are incomplete or corrupted, is after the primary data store is gone.

Costs for proper in-house SMB data backup

Employee time – backing up: (daily) ½ – 1 hour per employee
Backup Media: $2 – $200 – depending on format
Hardware: $200 to $8000
Employee time – verifying backups: (weekly) 1 hour per employee
Employee time – swapping media: (daily) .25 hours+ per employee

Assuming that the employee responsible for the backups, removal of media, verifications and restore processes is on a salary of at least $30,000 per year, and using the minimum time dedications outlined above, the cost of properly backing up an SMBs data is about $71.25 per week, $285 per month, and $3420 per year – not including hardware or media.

If you factor in the cost of true manual ‘rotation’ of backup copies to a secure offsite location using a courier service ($300 per month+) and the aggregate costs associated with restoring data from tapes or the internal costs of managing a single total loss/restore event, the costs of in-house backup can skyrocket to well over double the previous estimate.

Compare this to Online Backup, operating automatically at non-peak hours, without imposing on existing staff or adding hardware or media resources of any type.

The costs associated with restoring data backups are perhaps the largest potential cost exposure for an SMB. In most cases, a professional will be required to configure new hardware, restore operating systems and application software, and to properly restore the critical data to its original state.

An Online Backup Provider is typically well versed in network architecture, data construct, and customer touch points.  The cost of restoring data is typically included in the low monthly cost of an Online Backup Service, or is specified in the contract with the Service Provider.

If an SMB is currently handling its own backups in accordance with the guidelines outlined above (and most aren’t), it may already be spending over three times the cost of an Online Backup Service.

However, as I said earlier, only a very small percentage of SMBs do proper backups.


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.

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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.