Online backup service provider Carbonite has been in the news for some time now. They were recently in the news for the wrong reasons. Hot on the heels of the Belkin fiasco , “biased reviews without disclosing affiliations” are getting a hard rap on the knuckles!
The objective of this post is not to debate on companies’ marketing tactics (that too from 2 years ago – I’m not sure if that’s really relevant now) but to point your attention to something else that’s indeed relevant.
Sometimes, we have a VAR/MSP who uses StoreGrid to offer online backup services to their clients, ask us how they can compete with the likes of Carbonite & Mozy. We simply tell them: “Don’t even bother trying”. The events that led to the Carbonite story are quite relevant in this context.
A customer (calling himself Bruce Goldensteinberg), signed up for Carbonite after hearing ads for it on the radio. The backing up part went well, but when his computer actually crashed, he was unable to restore it from the online backup. When he called Carbonite’s customer support, they kept him on hold for over an hour. Read those last 8 words again – that’s the crux of the problem! The customer elaborates in his post that through his ‘wait time’ in the call, he was offered the option to avail of premium service and a quicker response – by paying US$ 20 more!
This, to me, is the fundamental point of departure between commodity online backup services and VARs/MSPs offering managed online backup services. Commodity backup services simply cannot afford to service customers paying $4/month – even after you do the math on what % of users actually avail of support!
We keep saying – backups are not like Skype (who don’t offer phone support, and whose email support isn’t too great, by the way). You cannot say your call quality was bad on Wednesday and great over the weekend and move on! You data was either backed up or not – there are no shades of grey here. Couple this with the increasing complexity and heterogeneity in the IT environment and the requirements for specialized backups like Exchange & SQL, and the value added by a VAR/MSP becomes a lot more clearer.
This ‘unaccounted support overhead’ is even more evident when you read blogs describing customer experiences with Carbonite, Mozy and other commodity online backup services. Most of those online rants end with “…the guy on the line offered me a full refund / free year of service”. In effect, the call center executives are empowered to execute a refund/freebie as required! Why? Because it happens quite often. Its simply the nature of the beast.
COMMODITY ONLINE BACKUP SERVICES CANNOT AFFORD TO PROPERLY SUPPORT THEIR CUSTOMERS PERIOD!
So, the next time someone asks you (their IT service provider) why they should use your online backup services over a $4/month ‘all you can eat’ service, ask them how they’d like to be treated when they have an acute stomach ache – by a real doctor or by an unknown guy on the phone who might attend to them after they’ve been kept on hold for an hour? How valuable is their health? How valuable is their data?
Luxman,
I somehow disagree there.
Some companies in the past have demonstrated how good products can be delivered just over the web at absolutely negligible costs. The key to success is “perfecting the product” and its usability.
See how VMWare made the impossible happen by delivering Virtualization software available for web download. When they started, IBM had a 1-month PoC period for their competing product which was also 10 times costlier.
I am not saying that’s the case with Carbonite or Mozy. Frankly even till date Mozy can’t handle my backups and complaints “Internet speed too low” or something like that.. even though I am using 2 MBps connection.
But, I am sure this can be done. The base cost of distributing a software is near zero if there is no support associated.
When storegrid is too perfect to have zero support calls associated, you too would start offering it an pennies :)
Jaspreet
I absolutely agree with your point on “the base cost of distributing a software is near zero if there is no support associated”!
However, the ‘if’ is a very very big ‘IF’. While it is a theoretical possibility, I don’t see the support overhead disappearing on most IT products, notwithstanding how well designed they may be…and I believe this is especially true for backups.
If fact, I’d argue that the ‘need for support’ is the primary raison d’être for the entire VAR (and MSP) community – a sizeable number of people & companies who amongst other things are responsible for Microsoft being where they are!
On a related note, if you haven’t seen it already…some of the articles on this subject (zero price software, etc) at Techdirt (www.tehdirt.com) are pretty interesting reading!
lux,
thanks for the answer.
With “support” i meant “troubleshooting” or “hand holding” and not being point-of-contact.
A toothbrush doesn’t need a manual or VAR to be used or sold. Same is _not_ true with softwares because they are inherently complex and buggy.
but, you surely have a point there.
Jaspreet
I just wanted to clear up the matter of “Bruce Goldsteinberg”. Like Vembu, Carbonite charges for telephone support (a whopping $20 per year). Goldsteinberg refused to pay. That’s why he was on hold for 1 hour. He screamed at our people and finally someone agreed to help him even though he would not pay and refused to avail himself of our free live text chat and email support. The average wait time for telephone support is under 2 minutes at Carbonite.
David Friend, CEO
Carbonite, Inc.
So the moral of the story is if someone screams loud enough and long enough you will help them anyway. Doesn’t that make the paying customers feel better. Instead of having some class and hanging up on the guy you decide to break from your model and help him anyway. Wouldn’t it be better to defend your employees and hang up on the a**hole. It seems like your employees may garner more respect for you than allowing someone to not pay you for what is spelled out in your contract and abuse your employees. All I can say is… What a leader.
Hi Mr. Friend,
Did the backup restore properly? What was the issue the user had? The user probably felt like he shouldn’t have to pay for support on something that he was already paying for – and since it wasn’t working, he wasn’t getting what he paid for. The question is if the problem was with the user not understanding something or if the restore actually didn’t work.