The State of Backupify: An Open Letter To Our Customers

For the past year I have been kicking around the idea of an annual letter to our customer base. My initial plan was to email it out so it would be kept private, but then I realized that with almost 10,000 customers, it would probably get passed around anyway. On top of that, there are still a fair number of VCs and analysts who don’t understand our market, so it made more sense to publish the letter here on our blog so that a wider audience could read it.

The goal of this letter is to summarize where we are, where we are going, and any industry trends that might impact our customer base. Ultimately, Backupify exists to serve our customers and so I hope this letter can be informative and useful if you are a customer today, or are considering a cloud to cloud backup solution. The letter consists of four parts: “Metrics and Milestones”, which includes some of our key numbers from the past year, “Product Vision” which talks about where we are taking the core Backupify platform, and “Issues and Challenges” which discusses some of the core challenges we face, and “Going Forward” which discusses where the cloud to cloud backup industry is headed.

Metrics and Milestones
The past 12 months were significant for the cloud to cloud backup industry. The problem of data loss in the cloud is the biggest problem that nobody talks about. Why? Because even though we restored 12,800,000 files in 2013, and 9,000,000 files in Q1 of 2014, many of our customers may not want to go public with a case study about how they lost data in a cloud application and Backupify saved the day.

Over the past year though, the market seems to have caught fire. Every month is a new record month for our sales team here, and leads are coming in faster than we can handle them all. I think there are 5 reasons this market reached an inflection point in 2013.

1. The Aberdeen report on SaaS data loss was the first good sized study done on this problem, and the results were surprising. The study showed that 32% of organizations using SaaS applications have lost data. It was the first quantification of how large a problem this really is, and showed that data loss in the cloud is almost as prevalent as data loss on-premise.
2. The Forrester report on the cloud to cloud backup industry was a great milestone as well. It was the first independent look at the players in cloud-to-cloud backup space, and confirmed that this is a problem and companies are adopting solutions. Large companies noticed this report and started looking more aggressively for solutions to backup their major cloud applications.
3. Larger enterprises are moving to SaaS, and they won’t move without a backup system. Over the past year, we have seen a sharp increase in the number of enterprises with more than 5,000 employees that are moving to cloud applications, Google Apps in particular, and they tend not to move without a backup system in place. Many large customers are concerned with the data ownership issues and the “all your eggs in one basket” problem of using a SaaS application and having all their data in a single location. We have seen lots of larger companies considering SaaS now that a way to maintain an independent backup through Backupify is an option.
4. Cloud data loss is increasing with time on the cloud. One of our best sources of leads for us is companies that have been on an application like Google Apps or Salesforce for several years and have now experienced a major data loss incident. We’ve never seen a case where it is the cloud provider’s fault, but rather, the stories are usually around an employee deleting (accidentally or sometimes intentionally) a key file or email, or someone installed a third party application that screwed up the data. In fact, one of our Fortune 500 customers lost 1TB of data in Google Drive because of a third party app. The longer companies spend on the cloud, the more likely they are to experience data loss, and when it happens, they look for a solution. More cloud adoption equals more demand for cloud-to-cloud backup.
5. The final trend we are seeing is a use case we didn’t expect – backup as a data management lifecycle solution. In SaaS applications, if you want to keep data around you often have no option but to keep paying for a seat on the original application. Large companies with lots of turnover end up paying for hundreds of seats they no longer need. We’ve seen the emergence of cloud to cloud backup adoption as a way to archive data for departing employees, for compliance reasons, or for other issues that are tangential to backup.

These trends have driven Backupify to over 2.5 petabytes of data backed up for over 900,000 Google Apps users. In fact, we expect in late June or early July to cross the 1,000,000 seat mark.

To support this growth, we’ve grown as a company from 40 employees this time last year to over 65 employees today.

Product Vision
We were the world’s first cloud-to-cloud backup company, and we have always been the most innovative. The vast majority of innovations in features, business models, core platform technology, and go to market platforms have been pioneered by Backupify’s team. In the past year we launched new features such as:

• Configurable Data Retention – This allows enterprise customers to set retention periods on their Google Apps data.
• Bring Your Own Storage – An abstraction of our storage layer now allows you to store data anywhere. We have first rolled it out to customers who want to use their own AWS bucket, but support for other storage platforms is coming later this year.
• User management API – This allows large enterprises to automate Backupify tasks as part of their I.T. processes.

In addition to building new features for our Google Apps backup product, we completed an 18 month project to build an entirely new platform. This new platform is based on a very specific product vision – the idea that enterprise customers want a “single pane of glass” through which to manage their backups.

There are really two ways to approach the cloud to cloud backup space. The first is to say that the backup and recovery experience for a specific application should be similar to the underlying experience of using that application. So, for example, the experience of backup and recovery for Google Apps should be very much like the experience of using Google Apps, and the backup and recovery experience for Salesforce should be very much like the underlying Salesforce experience.

The second way to approach the cloud to cloud backup space is to say that the underlying backup and recovery experience should be application independent, and should be abstracted from, and consistent across, applications. This is the single pane of glass view that we are building towards and it is the product path that Backupify has chosen. Why? Because it better maps into how large I.T. departments are structured. In large companies with significant I.T. departments, there is usually a group responsible for backup/archiving of all corporate data. That group would prefer to have a tool that covers all of their apps, rather than distributing the backup responsibility to the application managers, many of whom may not be in I.T., and therefore aren’t the best positioned to think about corporate data management and protection.

By contrast, the app by app approach (mentioned first above) works much better for the SMB market, where a very small I.T. department has many apps to manage and backup and recovery of those apps is just one small part of their jobs. In that case, learning a new tool can be a burden, and since they touch every app in the company anyway, it works for them. Since Backupify targets large enterprises (> 1000 employees), we chose the single pane of glass path.

The question arises though, how can we possibly connect to the hundreds of SaaS applications used within organizations so we can cover the entire SaaS infrastructure and protect all the important data for our customers? Our new platform, released last year, solves this problem. By abstracting all the stuff that is difficult about cloud to cloud backup, we made it possible to create a new backup simply by writing a “data definition” for that new application. Our first application launched on this new platform was our Smartsheet backup which is now publicly available. This platform has been exposed through an API so that anyone can write a new backup definition.

Where this really gets interesting is in the following graphic.By combining our “bring your own storage” technology, which allows you to store data anywhere, and our new rapid application platform that can quickly connect to any of your SaaS applications, you can see that Backupify is undergoing a transformation. Whereas we started off selling the things outlined by the orange box on this graphic, we are moving to sell what is in the blue bar – a platform that connects to all of your SaaS applications, stores the data wherever you want to store it, and provides a data management and protection layer that sits between the two.

Over the next year we are launching a bunch of new applications on this platform, including Office 365 backup, Box backup, Jira backup, and Evernote backup. You can read the full list in this article.

Issues and Challenges
The hardest part about building a cloud to cloud backup company is dealing with the differences between cloud to cloud backup and on-premises backup. Customers, who have used the latter for many years, are often confused about what to look for in the former. For example, most cloud to cloud backups don’t work like on-prem backups. The Backupify platform pulls items out of SaaS applications, it doesn’t take data snapshots. Customers sometimes ask us if they lose data from their core SaaS application, will it be removed from their next backup. The answer is “no.” Cloud to cloud backup systems work more like “recoverable archives” than they do traditional snapshot backup tools.

Cloud data is more than just files. Most cloud applications contain lots of metadata and unstructured data that makes backup and restore more complex. When you restore a file from an on-prem backup, you do just that – restore a file. But when you restore a file in Google Drive, you have to restore other things with it, like who it was shared with, or comments attached to it. The metadata is as important as the data. Bringing old outdated traditional backup product expectations doesn’t work very well, and may cause customers to buy the wrong things. There is still a lot of market education to be done to fix this issue and align the market with the way this new class of products works.

There are also a lot of technical challenges to be solved. At Backupify, we constantly look ahead at future bottlenecks in our architecture, which is important because no one has built a scalable, automated, distributed, backup of the cloud, in the cloud, before. It’s challenging and fun. As a result, we have cleared some pretty interesting technical hurdles over the past 3 years, hurdles that the industry laggards who come after us will have to solve later. Part of the reason the traditional PC and server backup providers haven’t done this yet is precisely because the technology is so different. They can’t just add a Google Apps backup connector, but will have to re-architect from a downloadable software model to a SaaS model to make it work.

Going Forward
The cloud to cloud backup industry is growing fast. We constantly see new competitors pop up, and that competition is a good thing for you, our customer base, because it forces the whole industry to be deeply focused on your needs. This growth is going to lead to a few things.

First, I expect to see more providers focused on niche customer segments. Those of us who were early had to go horizontal because that was the only way to reach enough customers. But now that the need and the use case are more well known, and more customers are seeking it out, a profitable business can be built on a single customer segment.

Secondly, I expect to see more big providers try to get into this space through M&A, OEM, and building it themselves. This will really increase the total market awareness and will be the catalyst that starts driving growth far faster than even the great growth trajectory we are on today.

When this happens, you can expect Backupify to occupy the position in the ecosystem we’ve always occupied – the innovative, scalable, security-focused leader in the enterprise space. Our own product roadmap will consist of features and infrastructure changes that give enterprises more control, and more security.

There is a lot going on in the cloud-to-cloud backup industry, and a lot going on at Backupify. This past year was a big year for us, and the next year involves even more interesting product features and progress. I want to thank you for being a customer, and for continuing to support us through the good times and the occasional growing pains. Feel free to reach out to me directly, rob-at-backupify-dot-com, with ideas or feedback about how Backupify can better meet your cloud data protection and management needs.