Is There An Online Backup Price War?

Is there an online backup price war underway or just price confusion?

It could be a bit of both. The good news for smaller companies: The number of viable online backup services for SMBs continues growing. The bad news? The number of viable online backup services for SMBs continues growing. As a result, time-strapped owners and IT pros have more to think about when making a purchase decision.

Ultimately, though, that could be a nice problem to have--particularly for SMBs that have been rolling the dice on data protection and disaster planning. The latest entry to the field is Code 42's CrashPlan PRO. It launched on Wednesday with both an unlimited data plan and an unlimited computers plan that offers up to 4 TB pooled capacity. (Though "unlimited" is technically true, a rep for Code 42 notes that once a company hits 200 computers, it's likely better off moving to the CrashPlan PROe, the vendor's enterprise tier.)

Dave Simpson, senior storage analyst at The 451 Group, said that unlimited capacity plans like CrashPlan PRO help simplify things for SMBs uncertain about their data backup needs.

"It does get more confusing with vendors such as Mozy that price on a per-GB-month basis, but I think the math would be simple assuming that an SMB knows how much capacity they need to protect," Simpson said via email.

That's a key distinction, according to Mike Evangelist, chief marketing officer at Code 42. He said in an interview that as Code 42 was building the new PRO platform, it considered two key types of SMBs: Those with limited IT resources that have only a hazy--if any--sense of their data requirements, and more technically sophisticated firms with a precise grasp on how much capacity they need.

"It's kind of a problem," Evangelist said. "How can you have the right product for those two extremes?"

The answer is the two different plans: The unlimited data plan, at $7.49 per computer, per month, is geared for SMBs that don't want to worry about how much capacity they need. The unlimited computers plan, on the other hand, allows SMBs to choose how much space they need and likely save money as a result. For example, an office with 100 PCs that wants 1 TB of total backup could pay a little more than two bucks per machine, per month (if it's willing purchase two years in advance). Evangelist readily admits that businesses are often better served by pay-per-use models rather than unlimited structures.

"We love selling unlimited backup," Evangelist said. "In an absolute sense, it costs a little bit more than if everyone just paid for precisely what they used."

Simpson of The 451 Group said that continuous, real-time backup and support across Windows, Mac, Linux, and Solaris platforms are key features of the PRO service. He also notes that CrashPlan PRO's two different plans help it stand out from the online backup pack.

"Code 42 competes primarily on price," Simpson said. "The company's services are usually less than its more well-known competitors, which continues to be true with the SMB-focused CrashPlan PRO."

Evangelist said that as data continues growing at companies of all size, so too will the myriad backup tiers out there--as a result, it's likely that unlimited and other large-capacity services will grow in appeal.

"I do think it will have to go that way," Evangelist said. He said even low-end backup plans will inevitably have to increase capacity to accommodate larger piles of data; he also noted that makes unlimited capacity plans more complicated for vendors. Because Code 42 handles all of its own storage infrastructure rather than outsourcing to other vendors, Evangelist said it's well-positioned for data growth. That industry direction was likewise noted by Simpson of The 451 Group

"Despite Mozy's discontinuation of its unlimited capacity plan, I think the trend will be toward that style of pricing; that way there are no gotchas down the road as the SMB grows capacity," he said. "The downside of that is that it decreases margins on the vendor/supplier side. It will be interesting to see who dictates pricing in this space: users, who I think would prefer unlimited capacity plans, or vendors, which would make more money from per-GB pricing."

You can't afford to keep operating without redundancy for critical systems--but business units must prioritize before IT begins implementation. Also in the new, all-digital InformationWeek SMB supplement: Avoid the direct-attached storage trap. Download it now. (Free registration required.)