Last week we learned that online backup provider, and KeepVault competitor, Carbonite had filed a form S-1 with the SEC, a proposal for an Initial Public Offering (IPO) of their stock. Estimates have them looking to raise USD$100m. But it was the content of the filing that generated most of the emails/calls to my desk; over 1m customers, losses of USD$25m in 2010, and last quarter revenues of USD$12.8m.
We’re hugely excited to see an IPO in our industry; a hopeful sign of acceptance and maturity in a business where KeepVault’s 5-year track record makes us elder statesmen! As fear of cloud based backup continues to dissipate and services improve, so the market is consolidating (mostly) around strong companies with solid business plans. Carbonite’s ~1m users makes them one of the largest online backup services, and to paraphrase ‘things are just getting going’! Their last quarter revenue of $12.8m is certainly impressive and again talks to the increasing rate of acceptance. KeepVault has seen approximately 70% yearly growth, almost entirely through word-of-mouth ‘advertising’ (BIG thank you to our loyal customers!).
Similarities and Differences
While KeepVault and Carbonite are both in the Online Backup business there are significant differences in the two services. An article today in The Register asks why now and why Carbonite? Why isn’t Nirvanix (an online storage provider) filing for an IPO?
The Register proposes that Carbonite needs money to sustain their current business model, e.g. the ‘land grab’ approach reminiscent of Web 1.0: give the service away and spend any revenues on attracting the next customer. Carbonite and some other services (livedrive, Backblaze et al) offer ‘unlimited’ storage, for one computer, for a low monthly fee. The downside for Carbonite? Significant $ loss each quarter and for the foreseeable future (according to the Carbonite IPO filing).
As Mozy recently announced, ‘unlimited’ storage is not sustainable; the growth in customer storage is fast outpacing any reductions in storage costs. Hence, Mozy has adopted a pay-for-use model similar to that offered by KeepVault for the past ~3 years. Not to toot our own horn, but it didn’t take a rocket scientist to see that unlimited plans, while an easy way to attract new customers, were not the key to long term success.
Many companies offer online backup, but how many are in it for the long term? Do you want to re-upload your data every time your provider runs out of money? KeepVault’s pricing is, we believe, walking the fine line between feeding our families and protecting the digital memories/files etc you entrust to us; there are no investors looking to cash-out or reap huge returns on investment, and no questionable business models. Backup is about conserving, and we’re taking a conservative approach!