Comments on: Carbonite CEO Feeling Rosy about EMC Reportedly Buying Mozy

By: Alan

Alan — Mon, 14 Jan 2008 16:47:14 +0000

I know there are many startups around the world about backup online, the most are in USA and only few in the rest of Europe. One of this is MemoPal direct from Italy. Mozy and Carbonite are now on the cover pages, but soon I think we will see other big competitors from outside USA.

By: Backupforbusiness

Backupforbusiness — Fri, 28 Sep 2007 19:15:56 +0000

I have to say that I am in the space and I am with a company that has grown organically from a $100,000 initial investment to a $3 million a year company in under 5 years. Mozy may have only taken about $2mil in VC, but there were founding partners that each had a multi million dollar investment put in. Mozy has never been making money. So what they got GE as an account. The logistics of the deal put Mozy as a preference for their individual users, NOT backing up the corporate data. They do offer a great service for the cheapo home user, but when it comes to building a business, the model is not very efficient.

As for carbonite, Friend says right in this that he developed a ‘feature free’ product. Great, you developed a dummy proof product. Good luck selling it. EMC did not buy Mozy for their customers, EMC bought Mozy for the technology. EMC has been saying for months now that they were working on developing an online backup, turns out their development team couldn’t get it done fast enough.

Also, what happened when Seagate bought eVault and Iron Mountain bought LiveVault? I give you a hint, they didn’t get cheaper. There is no way that EMC is going to pay $76 Million for Mozy and not start charging the customers. Thus, Friend is right, its good for Carbonite. Keep spending your million a month on marketing, if my math is correct they have about 9 months left before they are done blowing their VC, then we will see how well they are doing with their 100,000 free customers and their 20,000 “paying” customers.

By: dorkie trekkie

dorkie trekkie — Wed, 26 Sep 2007 13:56:35 +0000

vulcan returns – you need to work on your math skills.

How is it that Mozy is spending $1M per month, when they raised less than $2M over two years ago??

I can’t verify what Callaway Driver is saying, but at least his numbers seem to work out.

Carbonite is doing the classic “throw money at the problem” and buying customers, where Mozy is obviously *making* money. There is no other explanation for how they have flourished the last two years with only $2M raised. They really figured it out, and now EMC has.

By: Callaway Driver

Callaway Driver — Wed, 26 Sep 2007 04:13:13 +0000

Our firm conducted extensive DD on Mozy/Berkeley Data a few months ago when they were considering raising a Series B. While I can’t share too much because of NDA, I can say that they are doing extremely well financially and spending next to nothing on marketing. Keep in mind; they raised *less than $2 million* over two years ago.

If I remember correctly, roughly 1/3 of the Mozy free customers convert into paying customers and they have somewhere north of 100k Mozy unlimited subscribers paying $55 per year. Furthermore, the MozyPro business is very high margin for Berkeley Data and adding 100+ new business customers per day. Add in the $10mm (reported) deal they signed with GE and well… do the math.

I think Mr. Friend has a nice business with Carbonite, but it’s a bit concerning that he’s spending $1mm per month on marketing and still lagging so far behind Mozy. Also, contrary to his belief that this acquisition “reduces the threat from our most able competitor”, EMC has been giving every indication that they are prepared to make a major push into the consumer and SMB markets.

http://www.vnunet.com/itweek/news/2199395/online-storage-extending-appeal

By: vulcan returns

vulcan returns — Tue, 25 Sep 2007 18:19:07 +0000

Have to agree with Vulcan… you guys are clueless as well. Both Mozy and Carbonite spend in excess of 1 million dollars per month in just marketing to hit their numbers. The vast majority of their accounts are free accounts. They spend an average of $40 to get each free account. The more free accounts they want, they can get, they just have to buy them!

By: VentureWatcher

VentureWatcher — Tue, 25 Sep 2007 17:45:18 +0000

I have to agree with Dorky Trekkie on both points – 1) Mozy has/had a real business, and 2) Carbonite is going to have to sell for a truckload given the investment they’ve taken.

The two other interesting companies in the space are Box.net and ElephantDrive. As far as I can tell, ElephantDrive (online backup plus sharing) does not appear to have taken any VC money,and Box (basically a locker service) took a small investment from DFJ.

If I had to guess, you’ll be reading about another deal soon.

Sidebar – can some clarify whether Mozy’s 300K customers are free or paid? At 4.95/month, that’s $18M in annual revenue (if they are paying). If they aren’t, is if fair to call them customers?

By: dorky trekkie

dorky trekkie — Tue, 25 Sep 2007 16:21:59 +0000

Right evil vulcan, EMC just bought Mozy without looking at their financials. Last I heard Mozy has over 7,000 businesses using their corporate version – and I don’t think Mozy pays for them.

And flush with capital? $1.9M in venture capital to last over 2 years is flush?? Mozy was making REAL MONEY off their business which why they didn’t have to raise money.

And Carbonite is going to sell for $760?? Yeah, they wish – because they are so deeply buried in liquidation preferences from their investors. LOL.

By: evil vulcan

evil vulcan — Tue, 25 Sep 2007 15:32:56 +0000

I don’t think EMC understands the economics of Mozy or online backup in general. They just bought a company that pays users to store data with them. That’s right. Mozy pays users to store data with them. That is fine in the startup world when you are flush with venture capital, but how long will EMC continue to pay people to use it’s consumer service?