After years of unfulfilled promise and false starts, online backup has become one of the hottest segments of the storage market, fueling startups and sending the biggest storage vendors on an acquisition spree.
"Online backup is a very nascent market that is fragmented in terms of the kinds of players," said Doug Chandler, an analyst with International Data Corp. (IDC). "There are about a couple of dozen standalone vendors in this field, many of them very small."
Perhaps as a consequence of this startup dynamic, the online backup field reveals a surprising trend. Rather than relying on tape libraries to hold millions of customer files, most of these vendors appear to prefer disk as a medium.
"We feel tape is a legacy technology that really should have no place in data protection today, given advances that disk offers," said Scott Bush, director of marketing at AmeriVault Corp. of Waltham, Mass.
AmeriVault is tape free. So are DS3 DataVaulting of Fairfax, Va., ElephantDrive Inc. of Los Angeles, Remote Backup Systems of Memphis, and many others. Their tape-less inclination could be a sign of things to come in the broader storage market.
"Many of the established companies started with tape, but some of the newer ones back up to disk," said Chandler. "As a result, we are seeing a move away from tape, with tape becoming more of a medium for long-term retention."
Online backup hasn't merited much attention from analysts up till now. That is about to be remedied, though, as IDC has just released a research report on this branch of the market.
Chandler said the market remains relatively small but is expanding rapidly. IDC expects 33 percent compound annual growth through 2011, reaching $715 million in annual revenues.
While mature markets typically have the top few companies accounting for 60 to 80 percent of the pie, that isn't the case with online backup although consolidation is already setting in. According to IDC, the biggest players are Iron Mountain (acquired online backup providers Connected and LiveVault), EMC (acquired Mozy), Seagate (acquired Evault) and IBM (acquired Arsenal Digital). Nine-year-old Arsenal survived both the dot-com storage service provider era and the first wave of online backup consolidation that began a few years ago before finally succumbing to IBM's offer. Mozy, on the other hand, has a large customer base but a small revenue stream so far, said Chandler.
Other big companies are eyeing this area with interest.
"Symantec has a beta service for online backup," said Chandler. "Imation is another company with an existing customer base and established channel relationships, so they have a good opportunity to grow rapidly."
The majority of these business models, however, favor disk. DS3 DataVaulting, for example, uses Fibre Channel EMC Clariion for primary disk and backs this up with copies stored on MAID (massive array of idle disks) storage from Copan Systems.
"We maintain three data centers: our primary in Ashburn Va., a secondary for replicated data (gold service) in Allen Tex., and a third in Chantilly, Va., for lower tiers of service," said Stacy Hayes, COO and co-founder of DS3 DataVaulting.com.
Primary backup is in the $5 to $7 per GB stored range based on volume and level of service. Archive is cheaper, at $2 to $3 per GB stored.
Hayes said DS3's main competition is the status quo companies either not prepared to spend to protect their data or unwilling to change their existing backup habits. He also said he is facing increasing pressure from in-house solutions involving software (such as Double-Take Software and CommVault Systems) and hardware (such as Data Domain and FalconStor Software) combinations.
"Our customer base isn't interested in building and maintaining in-house solutions," said Hayes. "They recognize the value of utility-based (pay for what you use) service."
AmeriVault harnesses tier 3 data centers, which provide fire suppression, climate controls, redundant power, UPS, diesel and security/entrance controls. Customer backups are stored there on replicated RAID arrays and a third copy is sent to a business continuity site provided by SunGard Availability Services of Wayne, Pa., more than 1,000 miles away. This is on disk.
"We deploy a NetApp replication solution to the continuity vault that serves as a failover contingency should our main data center suffer an outage," said Bush.
For premium service (backup data in triplicate), it costs $7 to $17 per GB per month. AmeriVault also offers an economy version that stores one copy off site and is priced at $6 to $12 per GB per month. For archiving, costs drop to about $5 per GB per month.
"We compete with tape vendors and other service providers," said Bush. "We are able to provide automated online backup, secure offsite storage and a solid disaster recovery plan at affordable pricing."
Yet another tapeless outfit is ElephantDrive. It secures data by replicating it among multiple storage pools within its Storage Virtual Network (SVN). The SVN is a collection of storage network nodes some nodes are high-end redundant arrays, some nodes are redundantly configured JBOD shelves, and some are actually storage services like Amazon's S3.
"Because a core principle of our SVN design is that multiple copies of each object be available at all times, they are all disk-based and we don't employ any tape-based media or any other archiving solution as part of the production application," said Ben Widhelm, CTO of ElephantDrive. "Every data object is available on at least two geographically independent nodes. If a disaster in the vicinity of one of our storage nodes results in the incapacitation of that node, the restore and access requests are automatically routed to alternative nodes."
He admits that all of the top players in the space offer effective backup tools. He said his company differentiates itself by delivering real-time access to all secured objects and the fastest transfer times available.
"Our biggest competitor remains inaction on the part of small and medium-sized enterprises," said Widheim. "There is still a massive amount of unsecured data, completely vulnerable to a variety of threats ranging from spilled coffee and user error to natural disaster and intentional attack."
The Battle Ahead
As IDC notes and most of the vendors are experiencing, online backup is an area that is just beginning to take off. But take off it will and soon. How soon probably depends on how well vendors can scale out their environments to deliver fast, cheap and secure services to vast quantities of users.
"Whoever manages to scale this out will be in the driver seat over time," said IDC's Chandler. "EMC wanted Mozy, as it has an infrastructure based on scalability. To deliver in volume, you have to have the right infrastructure."