Obviously I think the answer to this is yes (Simply Offsite is my company) as do Fred Wilson and Jeremy Zawodny, (see their posts Online Backup's Inflection Point, and Swimming Pools and Hard Disks), however, I still don’t think its practical to backup an enormous amount of data but not because of bandwidth. The cost of storage is the problem.

The cost of storage is cheap, but not cheap enough. If storage (hard drives) were truly cheap then we would all have multiple USB drives that we used for our data storage. At the very least we would all have RAID (which is not a backup) built into our own computer systems. The truth of the matter is that storage is not cheap and when you start looking at media that is portable, reliable and robust enough to be used for data backup and data archiving the price only gets higher (Seagate’s portable drives for example).

How does this translate to online backup service providers? Well a “good” online backup service provider cares about their data (your data) enough to have fault tolerant systems; redundant servers, RAID based storage arrays, tape backup or other offline storage solutions, offsite data storage, data archiving policies and enterprise class equipment, which is not cheap. There are a lot of hard drives and other equipment associated with providing this type of storage. The storage that your service provider is using, or should be using is not cheap, not to buy, not to implement and not to maintain.

Not only do I think you get what you pay for in terms of storage space but I also question the reliability, security, support or business intent that you get with free services or p2p backup. If a complete stranger gave you a “free” car you would wonder what their motives were, or you would probably have a Junker on your hands.

To make my point, I recently visited a service provider that is about to start offering online backup services and yes they are using Dell PowerEdge Servers however, they have no backup, they don’t offer data archiving, their drives are all SATA based (SCSI is still better in terms of speed and reliability) and they really don’t want to provide support. They do are thinking about offering free online backup storage however… for a year.

I can’t tell you how many times have I read posts or comments like “their service was great until they changed the prices/started charging.” This is an old marketing trick, get them hooked on the free service, saturate the market, and then change the rules.

Anyone can offer free service. All they have to do is pay for a DSL connection to their house, use a home built server and charge a set-up fee of $50. One new user a month and the DSL connection is paid for. Two+ new users cover the cost of online game subscriptions.

P2P, you’re kidding right?  Is this a good idea? Parking your data on someone else’s computer, someone you don’t know, someone who, potentially, has all the time in the world to try and access your files. Not only that but how many computers is your data stored on, one, two, are they all in the same earthquake zone?

My view and experience with p2p is that if you want viruses then go right ahead.

Not only that but what about liability. Who do you hold responsible when you can’t restore your file? Who holds you responsible when it turns out that you have been providing data backup for some unscrupulous member of society or terrorist group?

Backup using p2p, no thanks, not me.

Yes I offer free services and yes there is both marketing intent, and charity behind it. I offer 1 GB of free service to those that don’t have a ton of data, like students, the elderly or low-income families. I do this because I think everyone should be able to backup his or her data. It is not uncommon for these groups to have computers. The price of computers is low and there are many programs to help low income families get a computer and online access.

My hope is that when students move on in the world and have a bit more money they will value their data enough to pay for a backup. I also hope that those who use the free backup service will talk about, tell their friends and blog about it. In other words I hope they are happy and will advertise the service through word of mouth.

Personally I’ve never understood the desire for free backup. You value your data, but not enough to pay for it? Seems odd. Not only that but the whole concept of paying to get access to your own data when you need it (the pay to restore plan), is also a bit disturbing. There is nothing to prevent you from being held for ransom and if you don’t care enough to pay for a backup then why should your online backup service care about your data?

So it sounds like I think online backup has not come of age. That is not the case at all. I think that online backup makes sense because it is automatic, it’s secure, it’s reliable and it’s offsite, and that is what you are paying for, or not. If you have never backed up your data or if you have ever missed a backup or you have ever lost data then online backup makes sense. Personally, I don’t pay to backup my music, it’s too expensive, but I do backup my pictures all 20GB of them (I pay full price for my own service). I do wish the cost of storage was lower, and then I might consider backing up my music, but probably not.

Yes the cost of storage is coming down, but our need for space is increasing at the same rate so no matter how cheap storage is you always have to balance cost of replacement (or loss), versus convenience and reliability, versus how much you are willing to spend.