June 12, 2008 interviews on the news report that Symantec acquiring SwapDrive for $123 Million.

Q: What’s your take on SwapDrive’s $123M price tag:

A: Frankly, I was surprised that the price was so low, given how hot this market is. However, that’s the danger of being a white label provider to someone like Symantec. It’s a little like the lawnmower company that sells 80% of it’s output to Sears. One day they come along and make you “an offer you can’t refuse,” so to speak.

Q: Does it make sense for Symantec to be in this business?

A: SwapDrive provides the 2GB of online backup that is included in every copy of Norton 360. From what we hear, the take rate on the Norton 360 backup option has been pretty good. The bundle definitely makes sense: antivirus, anti-spyware, and so forth are important, but the most important thing is to protect your data. And only online backup provides that protection. No anti-anything can keep your hard drive from crashing or keep a burglar from stealing your computer.

Q: There have been a lot of acquisitions in this space.

A: Yes. One by one our competitors have been snapped up by big old companies. LiveVault, EVault, Connected, and most of the old-line enterprise online backup companies have been bought. Mozy was recently bought by EMC for $76M. And now SwapDrive for a reported $123M.

Q: Is Carbonite going to be next?

A: I doubt it. Our ambitions go far beyond the white-label strategy of Swapdrive. In the consumer space, Carbonite now has 11% brand recognition. Swapdrive probably has zero. We’re out to build the leading brand in online backup, the brand that consumers can trust with their most confidential data. That’s why you hear our endorsement ads on radio shows with hosts like Howard Stern, Rush Limbaugh, and others. We don’t want to sell out to a Symantec. We want to be a Symantec. The online backup market is going to be big enough to support that goal and we can emerge as the trust brand, especially now that our most capable competitors have been gobbled up.

Q: What’s the next big move for Carbonite?

A: The online backup space is hot. Everyone is suddenly interested in getting into the game. We just cut a deal with a leading PC manufacturer (announcement shortly) that is starting to ship their PCs with a free subscription to Carbonite pre-loaded. In a few years, online backup will be part of the pre-install on every PC. Why? Because when your hard drive crashes and you lose all your family pictures, you don’t blame Seagate or Western Digital – you blame your PC manufacturer. It’s a big brand liability issue for the PC manufacturers. Carbonite can make that problem go away for a PC manufacturer. Similarly, bundling online backup with anti-virus makes sense and we’re pursuing partnership deals.

Q: What do you see as the adoption curve for online backup?

A: As Symantec undoubtedly sees, when you look out 5 years, I think almost everyone will be backing up their PC using services like Carbonite. Broadband is getting cheaper and faster, and disk storage costs are dropping like a rock. The alternatives don’t look very attractive: a) don’t backup and risk losing everything, b) buy an external hard drive. External hard drives are not ideal for backups because they usually sit right next to your computer, so if someone breaks in and steals your computer, or if it is damaged by fire, flood, or virus attack, both the computer and the hard drive will go bye-bye. Plus they are prone to failure (roughly 3% per year die). A RAID6 array that stores your data at Carbonite is 36 million times more reliable than an external hard drive.

Q: How do you think Carbonite compares with SwapDrive?

A: There are good reviews of both products on the web site We think Carbonite is a much better product than Swapdrive (we are of course biased in that regard) – it’s much simpler to use, and much less expensive. We just want to keep building the best online backup company in the world and hopefully take it public in a couple of years.

Related News:

Symantec Buys Online Backup Service SwapDrive For $123 Million

Carbonite CEO, David Friend, Comments on his Official Blog About Symantec’s Acquisition of SwapDrive

Symantec buys online backup vendor SwapDrive

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