SpiderOak: The Online Backup and Sharing Service Where Privacy Counts

8/29/12Follow @wroush

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seem happy to use easily guessed passwords and to share all the personal details of their lives on Facebook.

But Oberman says SpiderOak has built up a rabid following among developers and other geeks, and that this same group is now helping the startup get a foothold in the corporate world. “Our customers have traditionally been very tech-oriented,” Oberman says. “They appreciated our Linux support, and we do a lot of open source things, and as a result we developed a cultish following. When somebody at a large company says, ‘Look, we can’t have our employees using all these third-party services, what companies do you guys like that does things in a private way?,’ a lot of these techie guys were already using SpiderOak, so they’d say ‘Why don’t you give them a call.’ It wound up being a grassroots way to grow our enterprise business.”

Growth at SpiderOak’s competitors has been anything but grassroots. Box has raised an astronomical $284 million from a Who’s Who of Sand Hill Road investors, and Dropbox has raised almost as much—$257 million. Carbonite went public in 2011, raising $62.5 million, and Mozy is owned by deep-pocketed parent EMC. SpiderOak’s ability to get traction with Fortune 500 customers on only $900,000 in angel capital is a testament, in part, to the company’s frugality. It’s got 27 employees, but it doesn’t have an office—Oberman is in San Francisco, and the rest of the team is scattered across the Chicago area, Kansas City, Seattle, and Bulgaria.

Ethan Oberman, CEO of SpiderOak

Ethan Oberman, CEO of SpiderOak

There’s also a rugged-independence aspect to the story. “For us, the goal was always to be self-sufficient,” says Oberman, who co-founded the company in Chicago 2007 with Alan Fairless. “We were always in the mentality that we should drive toward controlling our own destiny. We like to have a say about what we do, and we make decisions about raising money that are directly in line with that. That also allowed us to be a little more patient and wait and see where the market was going, as opposed to over pushing into one area and then realizing it wasn’t the right one.”

Then there’s the company’s hidden weapon. “Every company needs one or two secret advantages to really make it work,” Oberman says. “For us that advantage was that my father’s company has owned and operated a data center since the early 1980s.”

The Northbrook, IL-based company is Omeda Communications. (The name is an acronym for Oberman: Matt, Ethan, Daniel, Aaron, a reference to the four brothers in the family.) The company offers a range of marketing-related IT services, including database-heavy applications like e-mail marketing, and it’s where Oberman had his first real job after stints in filmmaking, shooting commercials, and furniture making. (It’s also where he met Fairless, who’s now chief technology officer.) Oberman says SpiderOak is able to store data at the Omeda facility at below-market rates, which meant it didn’t have to build its own data centers or outsource the job to cloud services such as Amazon S3.

The company claims that it has suffered zero downtime, and that the fault-tolerant architecture of its own backup systems means that it can never lose a piece of customer data. So if you’re in need of storage and synchronization help and you’re interested in reliability and privacy, SpiderOak sounds like an option worth checking out. But one capability where the company lags, Oberman admits, is mobile. The company doesn’t yet offer customers an easy way to access their stored data from their smartphones or tablet devices.

“I’ve never claimed to get everything right the first time around and sometimes not even the second time, and mobile is the one area that we kind of screwed up,” Oberman says. The startup didn’t anticipate that mobile devices would become such important conduits to business data, he says, and its first mobile interface was something quick and dirty that didn’t serve users’ needs. But the company’s programmers are working on an HTML5-based interface that will … Next Page »

Wade Roush is a contributing editor at Xconomy. Follow @wroush

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