Monday, May 22, 2006


Hub start-up will back up data files for $5 a month

We predicted that online data storage was on its way when we developed our stack for 2010! Let's see if Comcast or Verizon decide to get into this game, which is also what we predicted would happen! A player as large as these could quickly eliminate this start-up!

By Hiawatha Bray, Globe Staff May 20, 2006

Everybody knows they're supposed to make backup copies of their computer files; hardly anybody does it. ''If you ask them why, the answer is simple," said Boston entrepreneur David Friend. ''If it was cheap and simple I'd do it."

Problem solved, claims Friend. His new company, Carbonite Inc., will back up any Internet-connected computer in the world for $5 a month, no matter how much information is stored on the machine's hard drive.

Friend and his colleagues have developed a small, simple piece of software that sits on the user's computer and uploads files to a remote storage facility in New York. Even people with little knowledge of computers can set up a Carbonite account in a few minutes. ''We're decidedly not a techie solution," said Friend, who compared the system's simplicity to that of Apple Computer Inc's iPod music players. ''We think of ourselves as the iPod of backup."

Once installed, it may take days for the Carbonite software to complete the initial data backup. That's because with most home Internet connections, dial-up or broadband, data upload speed is much slower than download speed. But all future updates are much faster, because the software will only transmit new or modified files. All files are encrypted to protect customer privacy.

Internet-based file backup is nothing new, but other companies charge higher prices for larger backup capacity. Friend, an engineer who previously founded Sonexis Inc., a Tewksbury maker of teleconferencing gear, said that with today's cheap data storage, Carbonite can afford to offer flat-rate pricing.

He estimated that the average user will back up about eight gigabytes of data. Friend doesn't worry about the inevitable users who'll upload hundreds of gigabytes of data. ''We'll make money on 98 percent of the users and lose money on 2 percent," he said. Besides, he added, ''storage costs are dropping like a stone, so a guy who's an unprofitable customer now will be OK next year."

Michael Cai, director of broadband and gaming research at Parks Associates, a research firm in Dallas, said that Carbonite doesn't face much competition. ''Right now the online storage and backup market is still nascent," he said. ''There aren't that many subscribers yet."

But Cai said Carbonite won't stand much of a chance if major Internet providers like Verizon Communications Inc. offer online backups to their subscribers.

That prospect doesn't faze Friend, who said he has talked to Internet providers about offering Carbonite subscriptions to their customers as a premium upgrade.

I like the vision of ipod of backup specially since security is an important issue. i wonder what they may do if the rumoured Gdrive actually is offered soon. But still, competition is a good thing.
Actually, there is already big competition. Maybe not Verizon/Comcast, but I'd consider AOL to be big! Check out

Jason M. and I were talking about starting this very same service, but for students. So I decided to call David Friend, Carbonite CEO. We will talk tomorrow, I'll let you know how it goes.
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