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