Carbonite CEO: Online Backups Sell

My post, How to standout in a sea of storage startups resulted in a spirited conversation, including some really insightful comments here and else where on the web. Raghu Kulkarni, CEO of Pro Softnet, a Woodland Hills, Calif.-based company said not only he is selling his IDrive and IBackup offerings, he is making a hefty profit. Apparently he isn’t the only one seeing brisk sales of online back-up services.

David Friend, CEO of Carbonite emailed to let us know that his Boston-based company is doing well. “We’ve enjoyed 26 consecutive months of double-digit month-over-month revenue growth,” he wrote in an email. He claimed “hundreds of thousands people paying about $50 every year in subscription fees. Theoretically, at 100,000 subscribers, the company could bring in an estimated $5 million a year.

While he agreed with the premise of the original article — little or no hope for ad supported services — he points out that many online storage services are doing too many things when people are looking for simple solutions. “Pure, simple, set-and-forget online backup is thriving,” he wrote in an email, pointing out that “Online backup is a great subscription business.  You pay your money and your worries go away. The user’s problem is clear:  “Protect me from disk crashes, theft, fire, viruses.”

Maybe that explains why EMC acquired Mozy for $76 million and Symantec paid $123 million for Swapdrive. Carbonite wouldn’t mind a pay-day like that: three year old company has raised a total of $17.5 million in two rounds of funding from Menlo Ventures, 3i Group and Common Angels.

“I think that when the dust settles in four or five years, the online backup market is going to look a lot like the anti-virus market. Almost every PC is going to ship with online backup built-in,” Carbonite Friend writes. Dell currently sells such a service. In such a scenario, broadband service providers who are looking to pad their ARPU might snap up some of these back-up services and offer them to their customers. Broadband Service Providers have already started to experiment with support and other such value services.

Related stories:

* Options for back up your files (WebWorkerDaily)