The importance of backup

Over the last 12 to 24 months, those watching the industry have seen a great deal of activity with companies entering the online backup market; sometimes called storage and service or a variety of other names. The basic premise is that individuals or companies use a service to back up files, rather than doing it in-house with their own equipment.

IDC forecasts that the worldwide online backup services market will increase at a compound annual growth rate (CAGR) of 33.3 percent between 2006 and 2011. This emerging market is being driven by unprecedented growth in the creation of digital data, much of it in the form of consumer-based, unstructured data types such as photos, video, and music. This market also is being driven by businesses that increasingly find it difficult to effectively back up and protect their server and PC based data using traditional backup-and-recovery methods and technology.

One person who has been watching the market with some interest is Doug Chandler, research director for IDC's Infrastructure Services research group. “What's been interesting in the last year or so has been many of the large storage companies have entered the market one way or another. For example, EMC acquired a company called Mozy a few months ago, which was a start-up company around online backup and has largely a consumer base, although they also have some business customers as well.

“Seagate, the disc-manufacturer, acquired a company called E-Vault about a year ago; that was a company, another online backup company. Symantec announced that they were going to enter this market, Dell announced a service in this space, so as you can see – and there was an acquisition by IBM about a month ago.”

It is clear to see from this that many of the larger players have decided that there is an opportunity here. The fact that many startups have entered the market is also an indication of future growth. In relative terms, it is still a relatively small market: “We started off with US$170 million in 2006, and we forecast growth to somewhere over US$700 million by 2011”, Chandler confirms. This is good growth, but as he points out, it's not even a US$1 billion market by 2011, although that could change depending on how much traction some of these services get. In IDC’s opinion, the sweet spot right now is consumers and small businesses.

Regional
Although this is a trend that is currently North America led – with well over 50 percent of spending – there are also key players in Europe. The IDC also identify great interest in Asia Pacific, where reasonable growth is also expected to take place over the next four or five years.

Surprises
The most surprising thing in his research, according, to Chandler, occurred around seven years ago. “There were a bunch of companies that started businesses around this model to some degree; it's basically the same model. It's called storage service providers, and there was a lot of investment at that time, and people said, "This is the wave of the future," but it all kind of collapsed around 2001, 2002.

“I don't know if it's a huge surprise but the most interesting thing for me is seeing this model revive itself in different market condition. Things are obviously very different from how they were back in 2000; but again, companies are saying, "I think we can do this as a service and save customers the cost and the resources that are involved in running their own backups."

There is another difference that Chandler mentions, in the shape of the more sophisticated consumer base. Today, individuals have considerably more digital data they want to store and protect. Large music files, photo and video files, Web 2.0 content: all of these are things that didn't really exist in 2000 on the scale they do today. According to the IDC, a backup service will be the easiest and in some cases the cheapest way for most people to store their data.

Power usage
While we’ve all noticed our electricity bills rising recently, this is a particular concern for large organizations, which rely on considerably more power than SMBs. “But over time that becomes an issue for just about all businesses,” says Chandler. “So in this market, the small businesses – the home offices who are aware of the power issues but are struggling with other things – won’t be able to successfully do backups because they don't have an IT staff and can’t afford equipment.”

Looking to answer this problem, it’s possible that SMBs will look to the hosting model. “That's a model that's been around for a while, but it has new relevance now with the issues about power, cooling and the overall cost of space. The sheer storage capacity that companies are adding is growing at the rate of around 60 percent, based on disc capacity. The sheer amount of space that's needed for that is a challenge for a lot of companies. So there are bound to be companies that say, “What things should we outsource or have hosted, and what things should we keep in-house?” Some of that will be storage; some of and the online backup model is part of that kind of broader so-called storage service.” While it might not be breaking the bank yet, the online storage looks certain to take everyone by surprise. Watch this space…

Backup benefits
In evaluating online backup services, businesses will weigh concerns regarding data security and time-to-restore performance versus their need to protect data offsite and meet corporate or regulatory compliance requirements regarding data retention and disaster recovery plans.

Cheaper, more readily available secure broadband connections, especially into the home, will make online backup a more practical and affordable option for consumers, home office workers, and small businesses.

Massive growth in data generation
IDC data shows that the amount of digital information that will be created, captured, and replicated will grow from 161EB in 2007 to 988EB in 2010, a six-fold increase. By 2010, nearly 70 percent of this information will be created by individuals. The fastest growth is occurring in the realm of file-based, unstructured data types, much of it fixed content. Structured, transaction-oriented data accounts for a declining portion of overall stored data.

These are unprecedented developments that, among other things, are driving individuals and organizations to consider alternatives to traditional storage solutions. For businesses, the sheer amount of storage capacity that needs to be procured, provisioned, and managed over time is becoming prohibitive as datacenter floor space, as well as power and cooling costs, becomes an issue. As is well documented, the soft costs of managing storage far outweigh the hard costs of the technology itself.

Backup Facts
• 100% of Best-in-Class companies achieve remote office data recovery more than 90% of the time.
• On average, 82% of remote office data is backed up in Best-in-Class companies.
• 92% of Best-in-Class companies store their remote office backup data in a secure offsite location, company headquarters or at a managed service/online backup service provider to ensure their data can be recovered when needed.

(Source: September 2007 Aberdeen Benchmark Report)

Why people don’t backup
• They are too busy with their business
• They’ll do it later
• Their current backup system, tape, etc. is not functioning
• They’ll fix it later
• They don’t remember to do it
• They don’t really expect to have a problem with data loss
• It happens to other people, not them
• They assume that someone else is doing the backup

Disaster preparedness!
• Make backups of all critical records such as accounting, employee data, customer lists, formulas, inventory
• Keep a backup copy of computer’s operating system, boot files, and critical software.
• Store a copy of all vital information on site, and a second copy off-site.
• Make pre-arrangements with computer vendors to quickly replace vital hardware. Keep documentation of systems offsite.
• Surge protect all computer and phone equipment through power and phone lines.
• Consider business interruption insurance.
• Don’t assume that just because IT hasn’t happened before, that IT never will.

About Doug Chandler
Doug Chandler is research director for IDC's Infrastructure Services research group. Mr. Chandler provides insight and analysis for IT professionals, investors, resellers, distributors, ISVs, OEMs and services firms. He delivers forecasts and analyses on storage services segments including storage-related consulting, integration, management and support services. He also focuses closely on the managed storage and online storage services markets, as well as data center-focused professional services.