Posts tagged ‘online backup’
Online backup provider Carbonite (NASDAQ: CARB) announces its financial result for the third quarter of their 2012 fiscal year, and most indications were quite positive.
Storage Newsletter provided a nice summary of the results, the highlights of which are:
- Bookings for the third quarter of 2012 were $24.3 million, an increase of 19% from $20.5 million in the third quarter of 2011.
- Revenue for the third quarter of 2012 was $21.6 million, an increase of 35% from $15.9 million in the third quarter of 2011.
- Gross margin for the third quarter of 2012 was 66.6%, compared to 61.6% in the third quarter of 2011.
- Net loss for the third quarter of 2012 was ($3.4) million, compared to ($7.4) million in the third quarter of 2011.
The improvements all make sense and our part of the natural progression of the recurring revenue model (i.e. since bookings are in advance, revenue will continue to grow and since costs of storage tend to decline with scale, their margin improvement is expected). It seems like the should be profitable at this point, so the lag in generating earnings is likely due to high marketing costs, high G&A, and/or customer service.
The most confusing element is their churn report (“Quarterly retention rate was in the 96% to 97% range, consistent with prior quarters since 2009.”). Carbonite reports churn on a quarterly basis, which makes it harder to discern what is really happening there.
Question to our audience — does anyone know if other SaaS companies that report churn on a quarterly basis?
If you are considering a cloud storage solution for your home use, there are a variety of resources for you to peruse to make the most informed decision. We keep a list of the consumer focused offerings in our directory of cloud storage services for individuals, but some other sites have more comprehensive reviews.
One that seems like a useful cheat sheet is OnlineStorage.org. This site has a number of useful links and reviews of seven major cloud storage players in the consumer space. The detailed review of each offering provides the pros and cons of the various options. Check out a sample: online storage review for ElephantDrive.
In response to our recent post regarding Carbonite’s lawsuit against its hardware vendor, we received a comment from Carbonite’s CEO David Friend. The entire comment has been approved and published, but we wanted to make sure that his key points were recognized with a full posting, as opposed to just showing up in the comments of the original.
Key Point 1: Friend notes that the incident happened over a year ago and is “not an ongoing problem.”
Key Point 2: Friend asserts that while approximately 7,500 users were originally affected by the problems, only 54 users actually lost data (and most did not lose all of their data).
Key Point 3: Friend asserts that Carbonite has change its practices and its vendors to increase the reliability of its systems such that, according to the CEO, the chances of failure “are almost nil.”
It seems like a positive indication that Carbonite’s CEO is addressing this issue head on. The questions that remain are: 1) who is ultimately responsible for the problems that occurred, 2) is the new design Carbonite is using sufficiently reliable, and 3) how will this issue affect cloud storage providers and consumers?
Online backup company Carbonite alerted the public that it had lost data belonging to over 7,500 customers over a number of separate incidents by filing a law suit against a hardware vendor and systems integrator. Carbonite claims that the cloud storage disaster was the result of $3M in faulty equipment provided by Promise Technology Inc. and has brought suit in Suffolk County. The Boston Globe reports that Promise denies any wrongdoing or liability.
Regardless of the outcome, events like this do not bode well for cloud storage providers. Failures, regardless of who is at fault, damage the critical consumer confidence that cloud storage requires to thrive. The impact of this breakdown, from a well-funded (the Globe indicated that Carbonite has raised over $46m) and well-known player in the online backup space, remains to be seen.
Thoughts? Please let us know what you think…
Earlier this week at the German trade show CeBIT, networking solutions provider Netgear (NASDAQ:NTGR) announced their entrance into the cloud storage space. In an extension of their fast growing network attached storage product, the ReadyNAS, the firm is offering a cloud based data protection service that comes pre-installed on new devices. A spokesperson described it as “the first NAS-Linked Online Disaster Recovery for consumers and SMBs.”
Closer inspection reveals that the service is delivered by existing cloud storage player ElephantDrive. The details of the partnership were not disclosed, but it looks like the accounts will differ dramatically from the regular small business storage accounts profiled in our directory.
The New York Times reports that online backup provider Carbonite was caught posting positive reviews about its service. The tech columnist for the Times, David Pogue, highlighted a similar discovery around reviews posted on behalf of components firm Belkin (they paid people to post positive or “five-star” reviews), but certainly aimed most of this blog entry at Carbonite.
Pogue’s column was inspired by one of his readers. The reader was a troubled user of Carbonite who chronicles he problems and sleuthing at his own blog in a post titled “Question of Trust”. As Pogue notes, this blogger “is not a user you want to disgruntle.” The comments include a response from the Massachusetts-based company’s CEO pledging to eliminate these reviews (many have already been taken offline by the review publishers) and ensure that no similar problems occur in the future. Also, he notes that at the time they were posted the company was much smaller and did not yet have the appropriate policies in place.
USA Today provided coverage of Carbonite’s early success in the online backup space. Interesting note for the other online storage firms – they seem to have had a lot of success marketing their product on the radio. Who knew?
There were also some interesting numbers reported. Carbonite claims 250,000 subscribers and that the average user backs up about 18 GB. Those sounds realistic and reasonable – however, USA Today also mentions that their datacenter manages “3.2 million terabytes” of data. Sorry USA Today, but that is just crazy. For one, it implies that the average user stores 12 TB instead of 18 GB – we’re pretty sure that’s a typo.
Also, it reports that Carbonite has spent about $10 million on radio ads. We assume their spending a lot online too (their ads are all over the paid search and affiliate networks), so it seems like their cost to acquire a user must be somewhere between $40/sub (absolute best) and $80/sub (assuming that the radio budget is 2/3 of their total spend – could they be allocating even more?).