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Data Startup Wins GE, Reveals Hot Online Backup Market

A 25-employee startup in Utah has snared a multimillion-dollar contract to provide massive General Electric Co. with software that automatically backs up files on office computers, jolting a market that appears to be getting hot.

The deal, expected to be announced this week, calls for MozyPro backup software by Berkeley Data Systems Inc. to eventually be installed on more than 300,000 PCs used by GE employees around the world. GE declined to comment, but people familiar with the situation said the company had been backing up its PCs with software from more established vendors, including Iron Mountain Inc.

Henry Baltazar, an analyst for The 451 Group, said Berkeley Data is reaping the benefits of an efficient data-storage setup, designed by founder Josh Coates, that lets the company profitably charge 10 times less than other automatic-backup providers.

As a result, American Fork, Utah-based Berkeley Data says it has signed up 3,000 companies since December, when it launched the business version of Mozy, which previously had been a consumer-focused product. Most of those business clients have been smaller organizations, which is why the GE contract -- which could be worth roughly $10 million annually -- is so striking.

"Overnight it makes them a leader in the space," Baltazar said. "It's going to drive pressure for the other vendors."

Like antivirus software, automatic backup programs run in the background on PCs, copying files and sending them over the Internet to remote servers -- which can fire replacements back to the PCs in case of a disaster or a computer crash. The technology has existed for a long time, but several factors are increasing its popularity. Among them: cheap data storage and proliferating broadband connections that make it easier to ferry big files around.

For consumers, online backup is insurance for all the videos, photos and documents stuffed on the home PC. Companies have a similar motivation -- plus new regulations that demand an ever greater lockdown on business information, even stuff residing on individual PCs.

Among the leading vendors for corporate backup has been Boston-based Iron Mountain, a $2.4 billion company perhaps best known for picking up business records and storing them for safekeeping.

John Clancy, president of Iron Mountain Digital, acknowledged that several competing online backup products have sprung up, but he said that was good for the market. He contended that Iron Mountain hasn't had to lower prices significantly, because huge customers require its high-end level of service.

That could be about to change. Baltazar said MozyPro snared GE not only on price but also with flexible features not found elsewhere. And overall, Stephanie Balaouras, an analyst with Forrester Research, said it appears that many large information-technology vendors "aren't meeting the needs" for big-company backup.

"They're missing the boat," she said.

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