Consumers, especially internet consumers, like getting stuff for cheap…even for free.  And this is great.  Free offers and free services can be great ways to extend the reach of a brand.  However, sometimes free can be too good to be true.  Sometimes, it can be a signal of a company that is not sure how to run itself, or how to turn a profit.  It can be a sign of leftover dot-com era thinking, which was too often: we’ll be free for a while, sign up millions of users, and then sell out to someone big, and they can figure out how to monetize the user base.  That only worked when the business had a unique or perfectly executed idea.  In many many other cases it failed.  Those millions of users who were happy paying nothing may not be so into the site or service with a fee attached.

Anyway, a while back there was a PC World article by Tom Spring, addressing the issue of data loss related to online backup services going away.  He lists some of the major and not so major players, including AOL with AOL Pictures and XDrive, HP’s Upline, Sony’s Image Station, and Yahoo’s Briefcase.  These offerings have been yanked from the marketplace.  Most of the big companies that pull their service give the users plenty of notice and time to move their files to another location.  Some of the smaller services simply ran out of money and vanished, and their customers’ backups right along with them.

In the article, Kurt Scherf, VP of market research firm Park Associates, says, “Companies without a business model are going to fail.”  I agree with that, and that is what I want to stress.  When selecting a firm to store your precious data, pick one you trust.  Pick one whose business model, pricing, and service make sense.  Pick one who has been doing it a while, or seems like they will be able to stay around.  At The Backup Plan, for example, out business model is not to collect as many free users as possible, or even to target home users and compete with lots of other companues at unrealistically low rates.  We follow a managed service provider model.  We have developed a strong service, at a reasonable and sustainable price.  But rather than market direct to customers, we prefer to resell this service through IT consultancies and shops.  Why?  2 main reasons:
1. Ownership…the customer has a trusted IT partner, and that IT partner leverages our service…we now have 3 parties involved, each of which has an equal stake in making sure the backups are solid and useful.  Each party has a sense of ownership of the process, and I think the result is a much stronger offering than a polished self-service web site
2. Overhead…ours is lower without the need for field agents and a massive first-level-support staff.  By supporting our authorized resellers we can be more efficient, our rates can be a little bit lower.
It may seem that by stacking a middle-man in the model we are creating a more expensive, less efficient model.  I think in this case, it is more efficient to have the trusted IT partner, which already has a relationship with the customer, continue that relationship, learn from our experience, and offer the best service to the customer.  I think it is dishonest for some of the low cost or free services to suggest they offer a realistic backup service, when often their business model is simply unsustainable.