“We sold our last company for $200 million, so $76 million would be a big disappointment for our investors.” (Friend is referring to FaxNet, a Boston-based Internet fax service for corporations, which he sold to Critical Path in 1999.)įriend says Carbonite’s strategic advantage-and the factor that differentiates the second-generation backup companies from older rivals such as X Drive-is its data storage system, which was designed to store data more efficiently and to be scaled up at low cost. “When we exit I’d like to see an extra zero on the end of that number,” Friend says. But Friend is so sure of the future of the online backup market that he doesn’t bat an eye at that price. So the sale of Mozy, in a way, reduces the threat from our most able competitor.”Īt $76 million, EMC would be lavishly overpaying for Mozy, in the view of some observers, such as Om Malik of GigaOm.
But the consumer side is a big investment right now, and I seriously doubt that EMC will want to sustain the kind of losses that our VCs are expecting us to incur for marketing. “They have been pushing into the enterprise market-they announced a big sale to GE a couple of months ago-so makes sense, because EMC has thousands of enterprise customers. “Mozy is more of a ‘techie’ product than Carbonite, which we have tried to make as ‘feature free’ as possible,” says Friend. Just as significantly, EMC’s absorption of Mozy might ultimately leave a bigger chunk of the consumer market to Carbonite. “We want to be to backup what Norton is to antivirus, and that’s the kind of money those guys had to spend at the beginning too,” Friend says.
Did carbonite cost go up series#
While online backup services offer a low-cost, low-maintenance alternative to storing data on an external hard drive, consumer awareness of the category has been growing only gradually, and Carbonite has been spending a million dollars a month lately on marketing (money coming out of its $15 million Series B round, which closed in May). Now that Mozy is off the table, there will be less competition for investment capital, Friend says.Īnd that could be important for Carbonite. “That’s going to make the money-raising task much simpler for us.” Mozy and Carbonite are often mentioned together as the two examples of so-called “second generation” online backup services-those designed and launched within the last couple of years, when the economics of broadband connections and hard drives have made it feasible to offer large amounts of storage for only a few dollars a month. The sale “puts a real peg in the ground and shows that somebody is willing to pay real money for one of these companies,” says Friend.
And now Mozy’s sale to EMC will fetch a cool $76 million, according to an unconfirmed report in technology blog TechCrunch.
Did carbonite cost go up software#
Both provide software that automatically encrypts and copies the information on users’ hard drives to servers on the Internet.
David Friend, CEO of Boston-based online backup company Carbonite, says the rumored acquisition of rival Mozy by Hopkinton storage giant EMC (NYSE: EMC) is great news for his company, too.īoth companies launched in 2005 with bankrolls of around $2 million.
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