Carbonite CEO Speaks on the Growing Online Storage Trend
David Friend, founder and CEO of Carbonite, is always good for a thoughtful -- and colorful -- analysis of almost anything in the online data storage sector.
If you have custom radio (XM, Sirius and the like), you've probably heard of Carbonite. The company advertises on new media more than any other data storage company The Station knows.
When Symantec announced its acquisition of SwapDrive June 10, Friend was quick to offer his take on the deal. SwapDrive has provided the backup element of Symantec's Norton 360 security and backup service for about two years, so it wasn't that surprising that the big company would eventually take over its online storage supplier.
"From what we hear, the take rate on the Norton 360 backup option has been pretty good," Friend told us. "The bundle definitely makes sense: You can protect your PC with anti-virus, anti-spyware and so forth, but the most important thing is to protect your data. And only online backup provides that protection. No anti-anything can keep your hard drive from crashing or keep a burglar from stealing your computer.
"One by one, our competitors have been snapped up by big old companies. LiveVault, EVault, Connected and most of the old-line enterprise online backup companies have been bought. Mozy was recently bought by EMC for $76 million. And now SwapDrive for a reported $123 million."
Friend said his own company's ambitions "go far beyond the 'white-label' strategy of SwapDrive."
"In the consumer space, Carbonite now has 11 percent brand recognition," he said. "SwapDrive is probably 0. Norton was one of the early providers of anti-virus software and built a brand that, for a while, was almost synonymous with anti-virus in the consumer and business markets.
"We're trying to do the same thing with backup -- that's why you hear our endorsement ads on radio shows with hosts like Howard Stern, Rush Limbaugh, and others [all of whom are politically somewhere in between those two]. In fact, I often tell our employees that we're going to be to online backup what Norton is to anti-virus.
"While we have lots of co-marketing and reselling deals, it should be clear to everyone that one of our goals is to be the trusted brand name in online backup."
The online backup space is hot, Friend said.
"Everyone is suddenly interested in getting into the game," he said. "We just cut a deal with a leading PC manufacturer (announcement to come shortly) that is starting to ship their PCs with a free subscription to Carbonite pre-loaded. In a few years, online backup will be part of the pre-install on every PC.
"Why? Because when your hard drive crashes and you lose all your family pictures, you don't blame Seagate or Western Digital -- you blame your PC manufacturer. It's a big brand liability issue for the PC manufacturers. Carbonite can make that problem go away for a PC manufacturer. Similarly, bundling online backup with anti-virus makes sense and we're pursuing partnership deals.
"When you look out five years, I think almost everyone will be backing up their PC using services like Carbonite. Broadband is getting cheaper and faster, and disk storage costs are dropping like a rock. The alternatives don't look very attractive: a) don't back up and risk losing everything; b) buy an external hard drive.
"External hard drives are not ideal for backups because they usually sit right next to your computer, so if someone breaks in and steals your computer, or if it is damaged by fire, flood or virus attack, both the computer and the hard drive will go bye-bye. Plus they are prone to failure (roughly 3 percent per year die). A RAID6 array that stores your data at Carbonite is 36 million times more reliable than an external hard drive.
"We think Carbonite is a much better product than SwapDrive (we are, of course, biased in that regard). It's much simpler to use, and much less expensive.
"We just want to keep building the best online backup company in the world and hopefully take it public in a couple of years."
Hey, thanks, David, for doing my blog for me today. We all learned something new, and that's the point of this column -- no matter who writes it.