Making Sense of Online Backup Options

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When you’re a small business and you can’t afford to lose those accounting statements, graphic design illustrations or medical records, keeping all your files in one location isn’t the best option. Storage industry insiders say backing up your information on external hard drives and CDs is important, but if your office or home is hit by a disaster, your data can be lost.

With extra backup becoming critical for businesses, it’s no wonder that online backup services have emerged as a major industry. Today, a slew of vendors compete for the attention of small to mid-sized businesses looking to the Internet to safeguard their data.

But with everyone getting into the action — from Internet startups to major banks like Wells Fargo, which announced its VSafe storage service earlier this year — how should a small business select its backup service?

One place to start is by considering vendors that store backups in an offsite location and to make sure that even those backups are secured in a second spot.

Vance Checketts, COO of EMC’s (NYSE: EMC) Mozy online backup service, cited the horror of backup tapes from the University of Utah Medical Center being stolen from an offsite facility. If the facility had used an online backup service, he explained, the health records for 2.2 million patients would not have been lost. (They were recovered later, however.)

Choosing a service that backs up the data to a separate location “will cost the service provider more and cost you more, but you have to decide for yourself how much risk exposure you want to take,” said Adam Couture, an analyst at research firm Gartner (NYSE: IT).

Set and Forget

According to David Friend, CEO of online backup provider Carbonite, the service must be “dead simple” and automatic. “When you’re out in the field and sitting in a Starbucks, your backup should be working,” he said.

“You want to find someone that is a big, well-financed business, because when you need your backup, you want your vendor to be there,” said Friend.

Daniel Stevenson, director of channel marketing at Iron Mountain (NYSE: IRM) Digital, also stressed his company’s pedigree. He suggested that buyers ask, “Is this a fly-by-night operation or a vendor that truly understands what it means to protect customer information?”

It’s important to check the reputation of the provider you choose, especially for small businesses such as doctors’ offices, writers and consultants. In those sorts of businesses, consumers rely on the information produced by the business.

“We are producers of what other people consume,” said Joseph Martins, managing director of the research firm Data Mobility Group.

Insiders suggested trying out the services before committing to a plan. “Make sure you do some test restores and can get the data back if you need to,” suggested Sam Gutmann, CEO of backup service Intronis Technologies.

Also important is making certain that a solution can address all of your business’s systems. Mozy’s Checketts, for instance, said his service offers an online dashboard that allows users to control the backup settings for all computers in their company.

Likewise, Gartner’s Couture pointed out that an ideal service should support multiple operating systems. Some do not support Mac, for instance.

Security and Capacity

Experts such as Checketts and Gutmann of Intronis, also stressed the importance of encrypting data before it leaves your machine — and ensuring it stays safe throughout its trip to the datacenter. In particular, they recommended using a method such as Advanced Encryption Standard, or AES.

According to Stevenson, “Security tends to come up very early in the conversation.” Vendors ask Iron Mountain, “Where’s my data being taken? Is it encrypted when it leaves your office or when it gets to the storage location? Who’s storing the information?”

Page 2: Capacity, retention and getting your money’s worth

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Checketts advises choosing a service that allows for at least 10GB of storage, while Carbonite’s Friend stressed the need for unlimited storage due to the possibility of users having to contend with a convoluted purchasing process at the moment they need to add capacity.

“Users will get a confusing message — they won’t know what to do with it,” he said. “You shouldn’t have to think about that stuff.”

According to Data Mobility Group’s Martins, you want to make sure the service is geared toward small businesses rather than home users. Some services will only back up based on this category.

Relying on Retention

Several insiders, including Lauren Whitehouse, an analyst at the Enterprise Strategy Group, and Iron Mountain’s Stevenson, said an ideal service should be able to retain data for any period of time.

“Does it only store my data for 30 days, or can I select a certain amount of data for one year?” Stevenson suggested users ask. For example, according to Gutmann, his company lets users specify precisely how long they want to keep their data, for periods such as four days, 12 months or seven years.

You should also be able to save copies at various stages, Whitehouse said. This way, it’s quicker to back up the files with just the latest changes and you can restore from any point.

“That’s a very key component to an online backup solution,” agreed Robert Haines, business development manager at Pro Softnet, parent company of the iDrive service.

Laura Dubois, an analyst covering storage for research firm IDC, said the online backup service you choose should let you recover data either through download or a quick shipment of discs. Brick-and-mortar office supplies retailer Staples offers one option that provides physical and online backup.

And when you need to need to recover the data from physical sources, how long does it take? Shail Khiyara, senior vice president of Seagate Technology’s (NASDAQ: STX) i365 EVault unit, said some online backup services have a three- to five-day waiting period to receive CDs in the mail.

Getting Your Money’s Worth

With all of the options out there in the market, it still may not always be clear how to ensure you’re getting the biggest bang for the buck. Fortunately, there are a number of ways a small business can ensure it’s not overpaying for its storage service.

For starters, the services should allow users to choose which types of files they want to back up, Couture said, enabling the services to pick up only business-critical documents like Microsoft Excel XLS files, PowerPoint PPT documents and others.

“If I’m a businessman paying for the backup, I don’t want to pay for MP3 recordings, just XLS, PPT, Word files — things that are truly related to the business,” he explained.

It’s also important to consider whether a solution offers simple setup and doesn’t require any additional, hidden expenses. Stevenson suggested asking, “Do they need to go out and purchase multiple components to make it work, or is it an out-of-the-box solution?”

Martins advises users to find out what the total cost per month will be for a service they’re considering, including any hidden fees.

According to Gutmann, one fee worth paying for is compression. That way, you can fit more data into the space you’re purchasing. While some vendors charge $1 a gig for uncompressed space, Intronis will charge $2 for compressed space, however.

“Make sure you really know whether it’s compressed,” he explained. “Otherwise, you can’t make a correct comparison.”

Greg Schulz, senior analyst and founder of StorageIO Group, warned that some companies may charge a fee for extra bandwidth consumed, to send or recover data, and for extra copies made.

Couture said to watch out for files being copied more than once, since this can run up the bill. Vendors like Carbonite charge a flat fee for unlimited storage, such as $49.95 a year, while others like Mozy charge per gigabyte for its business product.

Therefore it’s important to make sure the vendor offers de-duplicationand backs up files only once. “If you’re not doing de-duplication, the amount of storage you can consume is going to be a lot larger than if you’re not doing de-duplication,” Couture said.

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