RealTime IT News

David Friend, CEO, Carbonite

David FriendPC Backup is something most people don't think about until it's too late. There are a variety of backup and recovery alternatives available, ranging from free limited-storage options to full-blown and expensive security and recovery subscription services.

Unfortunately, only about a third of all consumer and at-home business PCs are backed up at all, said David Friend founder and CEO of Carbonite, a Boston-based start-up which has a new twist on an old idea: Unlimited backup and recovery services for $5 per month or less.

The price is the same if you have an 80GB notebook brimming with family photos, or a 500GB business desktop with company spreadsheets and e-mail archives.

Internetnews.com recently spoke with David Friend about his company's all-you-can-eat business model and his views on the backup and recovery market, in general.

Q: There seem to be a lot of PC backup solutions on the market, some free and others for a fee. Why did you see a need for yet another solution?

Most alternatives are too complicated and too expensive. The only other solution is burning CDs, which is what most people do. But, it is just a pain in the neck.

It's one of those things where you spend your Saturday afternoon backing up your PC, or just put it off until someone spills Coke on your computer and it's fried and your data is gone.

Q: Why $5 per month for unlimited backup? Why not $10 or even $1.99?

Our market research showed that a high percentage of people would buy us in that price range. We also used all-you-can-eat pricing with a previous company, called FaxNet, and it just blew our competitors away.

We interviewed our own early customer base and found that more than half didn't even know what a gigabyte was, and 70 percent said they had no idea how much data they had on their PCs.

Everybody else in the backup business gives you 1GB for $10 a month or 5GB for $20 a month, but how the heck is that going to work if people have no idea how much data they have?

Q: Who are your target customers?

We want to sell to the 150 million home PC users who are not backing up their computers. But, we do have a lot of small businesses signing up and discovering they can use Carbonite and throw out anything they are using for backup at the office.

Sometime later this summer we will probably have to come up with packaged prices for businesses looking to back up 10, 20 or 30 PCs.

Q: Does your service and model attract a lot of telecommuters and people who split their time between the office and home?

We are getting a lot of those people, including people who use it in their everyday business. We're also getting calls from IT people asking how we do it for a quarter of what it is costing them to back up in-house in their own servers.

The challenge is to store data very cheaply, so we spent a lot of time on our back-end architecture to make it all work.

Q: Companies like Google and even chipmaker AMD are offering free backup and Internet-based storage services. Do you think this competition will create problems for you?

I think it raises the visibility of the need for backup.

People have been giving away free disk space for a long time, but that's not what I'd call a backup service. The whole thing about backup is you should be able to set it and forget it. It should be like virus protection.

I don't think pricing is an issue, since when you get it for free you probably get service levels that are appropriate for a free service, meaning you get no guarantees. Five bucks a month is such a small amount of money that most people don't really care.

Q: Still, there are people who might argue that free is better than a monthly fee of any size.

There are only two things that matter to us: Price and ease of use. We want to be the lowest-priced provider in the industry, but we also want to be the easiest to use. The mail that we get from our users is all about the ease of use.

There will always be things on the Internet, like Gmail, where you can get free space, and if you are a techie you can figure out ways to use that free space.

But, I don't think it's ever going to be unlimited because that's expensive. It's not like serving up weather maps, where there is very little incremental cost.

Q: How safe is the security of the data that is stored on your servers?

We encrypt everything as it leaves the PC, so we have no idea what the content is and really don't have any desire to know what the content is.

Q: Are any of your customers concerned about having all of their data stored off-site and transferred via the Internet? Granted, a lot of this stuff will be photos and documents, but there may also be some sensitive information transferred, as well.

Most people are getting used to things like online banking, Internet services and online purchasing. We do get a small amount of e-mail from people who really want to quiz us about our encryption technology and how it works and so forth.

About 10 to 20 percent of the people are really worried about using any type of online service, but I don't think it's a huge percentage of the population.

Q: Do you see any competition from the external drive manufacturers who are promoting the fact that your data is safe and secure under your own roof?

Outboard hard drives have been on the market for two or three years and for certain people that's a good solution. Having met and talked with a lot of our customers, though, I can't imagine them fussing around with an outboard hard drive. There is also a big capital outlay from these drives, about 100 to 200 bucks.

External hard drives are still vulnerable if your house burns down or someone breaks in and steals your computer equipment.

Your hard drive is going to be gone, too, so it really doesn't solve the problem of people who are worried about losing all their family photos, Word documents or tax records.