The demise of The Linkup, formerly known as StreamLoad and MediaMax, shows that hosting free online backup and storage services will create a imperative cost burden in the long run:

http://www.demo.com/community/?q=node/160512

This should raise legitimate questions on Carbonite’s and Mozy’s business models. Carbonite has had comparable bad attention and although Mozy is now backed by EMC, that doesn’t seem to reduce the likelihood of a termination. The recent shutdown of Upline by HP demonstrates this risk.

For BackupAgent it means that our continuing advice to our partners will be to ignore the competition in the market that are hosting the services for free. We know local companies in the Scandinavian and European markets with these business models and we always steer clear from a pitfall discussion on competing with free services.

Free services kill the perception on value these services provide. Any small business or professional user will understand that securing data is a value-add to their continuity. They are more than happy to pay for it and are willing to pay a little more for good service and swift responses in case of an emergency. So far this business model is far more straightforward and profitable then the free alternative.