Need for cloud-to-cloud backup options creates new market

Organizations wary about entrusting critical information to Software-as-a-Service, or SaaS, providers are exploring cloud-to-cloud backup options.

Backing up your data to the cloud is one thing, but backing up data already in the cloud is another.

As cloud services gain popularity, data protection should become a greater concern for organizations. Critical business data stored off-site should have the same level of protection as on-premises data.

According to a Gartner report released in February, the public cloud market is expected to grow by roughly $20 billion this year, reaching an estimated $131 billion by year's end.

Gartner estimated that "strong demand is anticipated" for all types of cloud services, including Software as a Service (SaaS), which represented about 14.7% of the market, or about $19.2 billion. The largest segments of the public cloud market are cloud advertising, which represented 48% of revenue in 2012 and cloud Business Process as a Service, or BPaaS, which makes up 28% of revenue. Infrastructure as a Service, or IaaS, represents about 5.5% of revenue; cloud management and security, about 2.8%; and Platform as a Service , or PaaS, about 1%.

Those services -- particularly SaaS -- require an organization's important business data to reside in the cloud. As such, they are generating demand for a new type of data protection called "cloud-to-cloud backup." These cloud backup options ensure that data stored in such popular platforms as Google Apps and is safe.

Dave Simpson, a senior analyst covering storage for 451 Research, said cloud-to-cloud backup options are a "very small, early-stages market" but have been growing steadily, with vendors such as Backupify, Gladinet, Spanning, CloudAlly, LTech and SysCloudSoft specializing in protecting data in the cloud. Asigra, a general-purpose backup product popular with service providers, added the ability to back up in the latest release of its cloud backup product.

These vendors let customers automatically back up and encrypt data stored in SaaS accounts.

"When I first heard about this [cloud-to-cloud backup options], maybe about a year ago, I thought that's not much of a market, that's a niche market," Simpson said. "But these guys are sort of proving me wrong. They're racking up pretty good numbers. Spanning told me they had 1,700 business customers. Backupify, they've got 5,000 business customers, and that's all in a short period of time … they both launched in mid- to late 2010. That's a pretty good customer win rate for two years."

Dave Russell, a research vice president at Gartner, said organizations shouldn't leave backup of critical data stored in the cloud to the service provider. Cloud-to-cloud backup provides another copy in case something goes wrong.

"You can't abdicate responsibility," Russell said. "It does need some amount of oversight. So don't assume you will have no involvement in the backup process."

Like many forms of security or data protection, it might take a few bad experiences before cloud-to-cloud backup catches on.

"People will learn the hard way," Russell said. "If they have a provider or a SaaS model that may not be dependable, or they get into that situation where they accidentally make a mistake to, they'll find out, 'Well, it's going to cost me to have this restored or rebuilt, versus if I had my own copy, then I could have had another option.'"

Acquisitions coming?

Simpson said if the cloud-to-cloud market grows large enough, you can expect to see larger backup vendors enter -- possibly through acquisition. Backup software giant Symantec already has a financial stake in Backupify as a strategic investor in the startup's 2012 funding round.

"I would not be surprised if some of the big boys get into this space, most notably Symantec," Simpson said. "I think it's interesting that Symantec is an investor in Backupify. That would suggest the potential for a possible acquisition there."

Other industry heavyweights -- for example, EMC and IBM -- might wait until customer numbers reach into the tens of thousands, but Simpson noted that an acquisition now would be cheaper than waiting and trying to pick up a firm with a larger customer base.

But if cloud-to-cloud backup is a relatively small pond, it could radically change if one of the tech industry's biggest fish -- Google -- decided to move in. That's a remote possibility, Simpson said, but it could be fatal to the cloud-to-cloud upstarts if it happens.

"There's a big black cloud hanging over these guys, and that's if Google goes out and offers the [cloud-to-cloud backup] service, which they could easily do," Simpson said. "That would kill these guys … I'm not saying they would, it would be highly unlikely, because Google, generally speaking, does not shoot their partners in the face."

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