Lyons: Computer Crashes Needn't be Fatal

Many of us have suffered a data-destroying computer crash. But some stories are better than others. Josh Diulio, a marketing exec from Monroe, Mich., left his HP laptop sitting on a ledge on the balcony of his apartment building while he ran inside to get a drink. When he came back a crow was perched on the open laptop. The crow, startled by Diulio, leaped up and away, tipping the laptop just enough that it fell seven stories to the street below—where, just for good luck, it was run over by passing cars. Then there's the tale of Duncan Mowatt, a graphic designer in Seattle, who was having trouble with an external hard drive. The cause was a mystery until one day Mowatt's girlfriend picked up the drive and saw thousands of ants and ant larvae pouring out of it. She freaked out (as one might) and threw the drive across the room, where it smashed into Mowatt's laptop and wiped out its hard drive, too.

I share these tales not only because it's fun to laugh about other people's calamities (which, let's face it, it is) but because both of these guys were driven by their experience to sign up for an online backup service called Mozy—and because online backup is something that all of us ought to be considering. A Harris Interactive study from 2005 discovered that 35 percent of Americans said they weren't backing up at all. My guess is that the actual figure is even higher. Why? Because backing up is a pain in the neck. The only way to get people to back up their data is to make the process automatic. Apple has a feature called Time Machine that backs up your Mac to an external drive, automatically. But what if the disaster that wipes out your computer also takes out your whole office? Mozy (and others, like Boston-based Carbonite, Mozy's chief rival) is selling the advantage of having your data stored thousands of miles away—in Mozy's case, in three data centers in Utah, and, for European customers, one in Dublin, Ireland.

Three years after its launch, Mozy has 900,000 user accounts. Most use its free service, which lets you store up to two gigabytes of data at no cost. But 340,000 people pay Mozy and get unlimited storage (the basic consumer package costs five bucks a month). You create an account and tell Mozy which files you want backed up. Your first backup can take more than a week, depending on how much data you're sending out over the wire. After that, Mozy runs in the background, backing up only files that have changed since the last backup. Mozy officials won't talk much about financials, but they say revenues are in the "eight figures" and revenue this year will grow 300 percent. "We've kept growing even in the past few months as everyone else is struggling," says Vance Checketts, Mozy's chief operating officer.

Data-storage services have come and gone. Storage Networks did well selling storage as a service to corporate customers in the late 1990s, but it flamed out during the dotcom bust. The main drawback to Storage Networks was its hefty cost: the savings (if there were any) came from paying by the month and from clients' not having to shell out millions up front for their own storage systems.

Newsweek subscription offers >

But now the technology has evolved so that instead of buying huge, expensive storage machines the way Storage Networks had to, Mozy stores 10 petabytes of data (each petabyte is a million gigabytes) on the same low-end drives that are used in ordinary PCs. And there's more demand now than there was then. Researcher IDC says the market for consumer-based online storage will grow from $171 million last year to $920 million in 2012. Mozy started out with a focus on individual consumers, but it's now winning business from corporations too. GE became a customer earlier this year after one of its executives started using Mozy at home and realized it would be great for the company. GE now has several thousand employees using Mozy and plans to add more, says Greg Simpson, GE's chief technology officer.

But Mozy has even bigger ambitions. Last year it was acquired by EMC, a $13 billion maker of storage hardware that is trying to transform itself in two ways: first, by moving into software and services, largely through acquisitions; second, by going after cloud computing, the big megatrend over the next decade in which our data will be kept not on individual computers but on computers located somewhere out on the Internet.

In November, EMC merged Mozy with another of its acquisitions, a company called PI Corp., which was formed by Paul Maritz, the well-known software engineer who spent 14 years at Microsoft as Bill Gates's right-hand man. PI is working on soon-to-be-released tools that will help people store and manage data in the cloud. It has named the new mash-up Decho,

and envisions this company doing for information what banks do for money—not only storing information but also letting you share it, move it around, manage it and access it no matter where you are. "Decho is a company you can trust with your personal information, the way you trust a bank with your money," says David Goulden, chief financial officer at EMC in Hopkinton, Mass. He says people will pay extra to be able to do more than just store and retrieve files. That's great, but let's face it—not having to worry about ant colonies and curious crows is a pretty good thing all by itself.

Newsweek subscription offers >

Lyons: Computer Crashes Needn't be Fatal | News