Firstly, I want to state upfront that I do not like to beat around the bush to gain some PR advantage. We have no interest in succeeding by hook or crook. We want to succeed by adding true value to our partners and customers and we expect our partners to also want to succeed by adding true value to their customers. I personally hate to make money from anyone who did not gain some value through our product and services. That is one reason I absolutely do not pitch our business to venture capitalists as I do not want to be obliged to investors and do things against my philosophy just to provide returns to them.

Let me first do a reality check on our current business model:

1. 95% of our revenues are generated by our close to 2000 partners. 90% to 95% of these partners are managed service providers who host StoreGrid in their data center infrastructure and offer a managed online backup service to their customers. Between 5% and 10% of our partners would be hosting providers who provide a backup service to their cloud hosting, managed hosting or co-location customers. I want to mention that in our current business model there is no commitment, in terms of meeting some sales targets, we expect from partners – they simply purchase licenses upfront and get a volume discount or purchase licenses as and when they add a customer to their managed backup service. We do not insist on any long term contract or anything. Our partners continue to stay with us because they see value in continuing with us and not because of any contractual obligations.

2. 80% of our partners service customers with less than 100 employees. Most of our partners act as the outsourced IT manager taking care of everything IT for their customers and most of these customers may not even have an internal IT person and fully trust the local MSP for their IT needs. It is also important to mention that we have no visibility into our partners’ customers. We do not even know who these customers are. In the last 4 years of us focusing on this business model, we have never had a situation of a customer of our partner contacting us to purchase our product directly from us. So there is no question of competing against our partners by undercutting them by directly selling to their end customers.

3. Our partners have anything between 10 and 500 customers spread equally across all sizes. 50% of our partners have converted less than 10% of their customers to StoreGrid based managed backup service and 26% say they have converted between 10% and 25% of their customers to StoreGrid based managed backup service. Though we are not exactly sure why our partners have not been able to convert more of their existing customers, I am sure our partners are doing their best to get them converted and it will just be matter of time majority of our partners’ customers are moved to StoreGrid.

4. 92% of our partners say StoreGrid as a product is either excellent or good. We have been adding several new features to the product and would continue to do so and improve the value we offer to our partners and their end customers. Hopefully, as StoreGrid evolves and matures, our partners would be able to convert more of their customers going forward.

5. On the quality of technical support too, we have been rated highly by our partners – the average rating being 4.3/5.0. I want to highlight that this is about the free technical support we provide to our partners as part of their subscription license fee we charge them. We do offer premium technical support with telephone support and guaranteed response times etc. No wonder the number of takers for that is rather small considering our basic free support is one of the best in the industry.

6. It has taken four years for us to get to 2000 partners. We have spent considerable amount of money and resources in acquiring these partners. Our success depends upon the ability of our existing partners to add more and more customers to their StoreGrid based managed backup service and our ability to add thousands of new partners every year.

We as a business have to keep looking for diversification into different market segments and drive growth with the aim for taking a leadership position in this data protection domain. Indeed we like our current business model of serving the small business customers through our dedicated channel partners. We will continue to invest and grow this market going forward. But as StoreGrid evolves, we believe we have a chance to position StoreGrid in the medium sized business segment. Most of our ongoing strategy is based on feedback from our existing partners/customers and also some of our prospective partners and customers. Let me talk about our immediate diversification strategies and why this is not a strategy to compete with our partners or sell directly to their customers.

Why Vembu Home Online Backup Service to Consumers

Consider the fact that we have signed up close to 2000 partners in the last 4 years and that all our active partners put together have converted possibly 30,000 or more business customers to their StoreGrid based managed online backup service. The two well-known current brand names in online backup domain, Mozy and Carbonite started off by targeting consumers and spent quite a bit of money in building a brand amongst consumers. It is a different matter that they may not be really viable, long term businesses trying to treat backup as a commodity for even business customers. But by lieu of building a brand amongst consumers they get lot more attention from the press, the bloggers and even amongst the MSPs than they deserve. That is the reality. We can only build a brand by focusing on the consumer market or by focusing on the large enterprises. It is not easy to build a brand by focusing on the SMB market that too through the channel. Why is a brand important to us? It is important because it will reduce the cost of acquiring a lead for us and it will also help us convert more of our leads into partners as it will give the prospective partners more confidence in partnering with a reasonably well known brand than dealing with what may be perceived as an obscure little company. It is a different matter that we feel we have a very good product backed up by a highly committed technical support. When it comes to signing up large number of customers or partners, a recognizable brand name definitely matters. By providing services to consumers we want to build a brand name in the cloud storage domain.

I see no reason why our MSP partners should feel threatened by our consumer focused initiative. By definition, MSPs focus on business customers who tend to outsource their IT as they see better value in an MSP managing their IT rather than themselves. The data I have provided about our partners establish that very clearly. Of course there are always some businesses which are confused. They may have some IT capability internally and they may look at the commodity storage services available and start comparing them with the MSP provided IT service. Either the MSP has to educate such customers about the value they bring to the table or just let the customer try the commodity service and figure it out for themselves. For the Vembu Partners, even if we do not provide a commodity online backup services to the consumers, these businesses are going to compare the MSP services with the other competitive consumer focused commodity services anyway. The business customer who is confused and does not see the value the local MSP bring to the table is anyway lost and there is no point in MSPs trying to win them over. If someone does not see the value it is better to not win them over as a customer as it will only result in unhappy customers because of mismatched expectations.

Also, our Vembu Home backup service license agreement clearly precludes businesses from using the service. Even those business users signing up as individual consumers would have anyway signed up with a competitor. Vembu, as a business, wants to win the mind share of such business users too. Once we win their mind share, there is a distinct possibility that they realize that commodity online services may not be all that perfect for businesses (as they are for consumers). And they may be more willing to see the value the local MSP bring to the table. When that happens we surely want to provide those businesses as a lead to our MSP partners. The modalities of how that will happen have to be worked out. We need to start somewhere and hopefully it will all work out as we plan.

Of course, there are some MSP partners who claim they also want to go after the consumer market. The same logic as business customers applies here too. If there really is a consumer need which the MSP tries to fulfill and the consumer sees value, it is fine. But if the consumer does not see the value the MSP offers, then she is anyway going to go with a commodity service. Why cannot it be Vembu? Why should Vembu give up serving that consumer and win their mind share if it can help us in some intangible way. That is what we think. Majority of our MSP partners focus on business customers. We do not believe it is possible for the MSPs to easily offer a commodity service to consumers. If they want to do that they have to become SaaS vendors themselves by creating and owning the core IP etc. This is the reality we believe in and we need to follow a strategy based on what we believe in. Commodity consumer offering will always be part of a larger offering as it is impossible to sustain a business by only offering commodity services to consumers. It is always offered with a larger strategic goal in mind. If some MSPs want to also offer commodity services to consumers they cannot do that simply by licensing the IP for the core services from a vendor. They have to own the IP themselves and in that case they are no longer an MSP.

Why Vembu Pro Online Backup Services

Since the time we released our StoreGrid Service Provider Edition for MSPs, we have always had prospective partners express interest in reselling a managed backup service hosted by Vembu rather than hosting it themselves and managing them. As a vendor we initially decided to be a pure software vendor as we did not want to invest in building our own data center and the associated NOC. We have always been quick to offer options to our partners including having the ability to host StoreGrid in “Infrastructure as a Cloud Service” like Amazon Web Services. Now that we have enough experience in working with cloud computing services like Amazon Web Services we believe we now are in a position to host StoreGrid in Amazon Web Services and offer business an online backup service. The Vembu Pro online backup service will be offered exclusively through the channel. That means it is just an extension to our current business model where we license StoreGrid to our MSP partners for them to host and provide a service. Even our existing MSP partners have a choice now. They can offer options to their customers where in the backup is done to their data center or if the customer chooses the backup can be done to the Amazon Cloud. We probably are the first serious vendor focused on the channel providing such a capability. Backing up to the Amazon Cloud, specifically the S3 infrastructure, can be such a compelling selling point to the MSPs. At least that is what we are hoping for.

As I said, Vembu Pro will be offered exclusively through the channel. And we are also putting together an SMB lead generation program through which we want to provide SMBs interested in backing up to the Amazon Web Services as leads to our partners. These are in early stages but it is just a matter of time before all these things come together. And believe me when I say Vembu Home for consumers is an important component of this whole strategy and it is not meant to compete with our partners by undercutting them.

What about StoreGrid Professional Edition – the on-premise or branch office backup solution?

Until now we have never had to face a question about our StoreGrid Professional Edition. It has been there even before the release of our Service Provider Edition. So far, we never actively marketed it. But we do get sales from businesses that is looking for a self managed on-premise backup solution or other larger businesses for consolidating their branch office backups to a centralized data center. Though there are direct sales from businesses we also have about 50 resellers actively reselling the StoreGrid Professional Edition. We have a Channel program for that too and a few of our MSP partners also resell StoreGrid Professional Edition apart from offering an online backups service to their customers. We never really paid much attention to selling the StoreGrid Professional Edition and whatever has been happening is on its own. We are evolving StoreGrid Professional Edition recently and we believe it is just a matter of time before we are in a position to take on the likes of Symantec Backup Exec – by offering compelling features at 1/5th or 1/10th the price. We will then actively seek resellers to push StoreGrid Professional Edition to customers who want to stick to on-premise backups. As I said we do have a channel program already in place which can be fine tuned and evolved based on market requirements. Here again our main strategy is to involve the channel wherever it makes sense. But there are these occasional online sales which happen across the world on its own. If ever such a sale happens because of some effort from our channel partner we will surely compensate them for that. And this is the type of guarantee I can provide the channel as of now. We will also be seriously looking at some kind of customer registration program wherein a channel partner can register a customer with us and we then make sure any direct communication from the customer is always routed through the channel partner. We do have such a program in a small scale in India with a reseller.

I sincerely hope this long post is treated as an honest effort from our side to dispel any doubts in the minds of our partners about our ongoing strategy. I am sure there are some of our partners who are not going to be entirely happy. To them I want to say that we are as open and transparent as it can get. We say things as they are however uncomfortable the facts are. End of the day, our long term success can only be guaranteed only if we can continuously provide value to the end customers. Any strategy which revolves around an assumption of customer ignorance cannot last long and as a company we are uncomfortable in forging any strategy based on an assumption of customer ignorance.

I am open to honest feedback and suggestions based on market reality where the internet and the social media have turned all the existing business models upside down.

The above post was written by Sekar Vembu of Vembu Technologies. Vembu Technologies is a backup software vendor whose product, StoreGrid, powers the online backup services of a large number of service providers across the globe. Besides remote backup, StoreGrid is also used for on premise backups of workstations and servers at various companies & universities.

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Why did we launch only 10 GB storage plan?

With this initial production launch, we want to get to know more about Vembu Home user’s adoption for cloud storage. Based on the results and user feedback we are planning to provide premium storage options in  the coming months.

What shall you do if you need more storage immediately in the cloud?

Please e-mail Vembu Home support at help@vembu.com with your requirements. We will try hard to incorporate your suggestion as we do more updates to Vembu Home.

Besides payment plan and making Vembu Home production ready, lots of exciting stuff has happened with this update. While most of the changes are back-end performance stuff, there has been a prolific effort in fixing bugs and making Vembu Home easy to use. Surely, this update belongs to the Vembu Home Server cluster, which has sort of come of age to provide a smooth and uninterrupted service for our users. Watch out for lots more cool stuff coming your way in our coming updates.

The above post was written by Jay of Vembu Technologies. Vembu Technologies is a backup software vendor whose product, StoreGrid, powers the online backup services of a large number of service providers across the globe. Besides remote backup, StoreGrid is also used for on premise backups of workstations and servers at various companies & universities.

Vembu Home is the only FREE consumer backup solution for free local backups and optional Amazon Cloud backups. Get your FREE COPY now.

[Updated @ 09:30 AM PDT] Maintenance operation is still going on, we will update you once the service is up and running.

[Update @ 10:30 AM PDT] Maintenance in our Amazon infrastructure has been completed. Vembu Home service is now available. More details on the maintenance update once our initial stability tests are complete.

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Here are the highlights of the new features which are available with the latest update.

I. Network Mapped Drives support:

One of the most requested features since our initial release was the support for mapped drives. With this feature, the users will be able to

1. Backup from a network mapped drive to the Local HDDs or the Cloud Server
2. Store local backups to a network mapped drive

This feature is ideally used by users who have multiple computers/devices with critical data to backup but which have an operating system not yet supported by Vembu Home. Using a simple network mapping to the share or drive of the other systems, users will be able to backup those computers. The users can also backup to and from your Network Attached Storage (NAS) devices.

II. Global Configuration of backup encryption password & CPU Usage:

In our initial release, users had to configure encryption password and CPU usage for each backup set. We have now moved the password and CPU usage configurations under the options tab along with Backup Window configuration. Users will now be able to store a common global encryption password for all their backups. The users can also change the CPU usage dynamically for all the backups at one place.

III. ‘Do not Backup’ Window Settings configured by default:

Now, ‘Do not backup’ window settings are configured by default between 8 AM to 6 PM. Users don’t have to now worry about backups hogging the system resources during those hours. Backups will automatically stop during the ‘Do not backup’ window hours, and will resume after the window. This default configuration has been done only on fresh Vembu Home installations. For the existing installations, you can go to the Options Tab and manually configure them.

IV. Test Connectivity with the Amazon Cloud Server:

With this feature you can check the connectivity with the Amazon Cloud Server.

V. Advanced Graphical Backup Report added:

We have added a more intuitive backup report for

1. Files configured for backup, protected files & skipped files
2. Storage quota in Amazon Cloud, storage used by backup & storage used by the client.

VI. One-Click Configuration of Pre-Configured Backups:

A more intuitive representation for the pre-configured backups available with Vembu Home Console is now provided. This provides one-click configuration of your favorite backups such as My Documents, Outlook, Registry & System State, Browser Settings etc.

VII. Support for Automatic Software Updates:

Now, any future software updates will be automatically downloaded and installed without any manual efforts from the user.

One of the major under-the-hood features included in this update is the addition of an embedded local web service to the Vembu Home Agent instead of the more bulky Apache-PHP Web Service, making the client much more light weight.

The update also includes several other under-the-hood enhancements which improve the overall performance of the Vembu Home Agent.

The above post was written by Jay of Vembu Technologies. Vembu Technologies is a backup software vendor whose product, StoreGrid, powers the online backup services of a large number of service providers across the globe. Besides remote backup, StoreGrid is also used for on premise backups of workstations and servers at various companies & universities.

Vembu Home is the only FREE consumer backup solution for free local backups and optional Amazon Cloud backups. Get your FREE COPY now.

Additionally, if the person making the presentation is a paying client who is launching a new product or service, you’ll typically also have a lot of polite moments where you go “Great Idea, but haven’t companies A, B, E & K done something somewhat similar before?”. Typically, the accompanying thought stream is “Yeah, Yeah, tell me something I don’t already know – so I can stop pretending to be excited”

When we made an analyst/media briefing ppt for Vembu Home, we thought we’d spare them the “nested points in font size 10” approach – and make it really ‘easy to digest’.

We also had something new to say – with our dual backup approach, the iPhone inspired UI, Amazon Cloud backup, etc. That certainly helped!

A copy of the ppt is embedded below. For all you pptholics, it’s a good intro to Vembu Home.

PS: speaking of ppts, there is an amazing tool we came across. Stay tuned for a ‘fluid version’ of the ppt below.

(note: Scribd seems to have ‘mutilated’ slides 3,14 & 20 a bit; forgive the pagination on these slides)

OH NO Not Another Online Backup Service

The above post was written by Lakshmanan (Lux) Narayan of Vembu Technologies. Vembu Technologies is a backup software vendor whose product, StoreGrid, powers the online backup services of a large number of service providers across the globe. Besides remote backup, StoreGrid is also used for on premise backups of workstations and servers at various companies & universities.

Vembu Home is the only FREE consumer backup solution for free local backups and optional Amazon Cloud backups. Get your FREE COPY now.

The response from users during the short Private Beta period (we launched on October 8th) has been awesome. The hybrid approach taken by Vembu Home to provide the ability to backup both to local machines as well as online to the Amazon Cloud, has been singled out for the most praise by users who sent us their feedback.

We are now more pumped up and are working longer hours to add more useful features to Vembu Home. Please do send us your feedback and feature requests. Your input will help us make Vembu Home better.

The above post was written by Kumar Krishnasami of Vembu Technologies. Vembu Technologies is a backup software vendor whose product, StoreGrid, powers the online backup services of a large number of service providers across the globe. Besides remote backup, StoreGrid is also used for on premise backups of workstations and servers at various companies & universities.

Vembu Home is the only FREE consumer backup solution for free local backups and optional Amazon Cloud backups. Get your FREE COPY now.

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The above post was written by Lakshmanan (Lux) Narayan of Vembu Technologies. Vembu Technologies is a backup software vendor whose product, StoreGrid, powers the online backup services of a large number of service providers across the globe. Besides remote backup, StoreGrid is also used for on premise backups of workstations and servers at various companies & universities.

Vembu Home is the only FREE consumer backup solution for free local backups and optional Amazon Cloud backups. Get your FREE COPY now.

We’ve been in business since 2004. Our Service Provider Edition has been available since early 2006.

Our flagship product, StoreGrid runs on over 100,000 computers, and is ‘under the hood’ of about 1,500 service providers across the globe.

StoreGrid is also ‘under the hood’ of our new Vembu Home service.

So, why are we launching our own service?

Are we (shudder) planning on competing with our own service providers? Are we changing our business model?

No, and no.

Hopefully, the following points will place things in perspective…

• We’ve been squarely focused on ‘business backups’ so far. This focus will continue – in fact, it will become a LOT stronger.
• We’ve been focused on Service Providers so far. We will be even more focused on service providers, going forward…
  • Last week, we released v3.0 of our Service Provider Edition. If you thought the v2.x had enough features, v3.0 is v2.x on steroids and red bull! And it is built only with Service Providers in mind. The big news with v3.0 was reseller & customer management, Webservices APIs for integration with service providers OAM systems, etc. Almost all of these are features that are ‘useless’ to Vembu Home. We wouldn’t have a team ten times the size of the Vembu Home team working for months on v3.0 SP Edition if we didn’t ‘want’ service providers.
  • To emphasize our commitment (to Service Providers) any more, we’ll need to run around screaming “service providers, service providers,…” like someone you know did – for developers. That’s not our style (and we don’t have Axillary Hyperhidrosis).
• Vembu Home is built atop the StoreGrid engine – with a consumer-ish, iPhone inspired UI – and a strong consumer focus, to match. The consumer focus is reflected in its focus on backup to local disks, and Amazon Cloud Backup for consumer data. Once we are out of private Beta, our EULA will also reflect this – that Vembu Home is only for Home users, NOT for business users. Does this model work? Can a company do this successfully? AVG Anti-Virus is a good example – running on over 80mn computers, over $140mn of sales, and a valuation of $800 mn.  And yes, they also have a free edition that rocks – and a booming distributor & reseller channel that’s making profits. My kids run their free edition on their laptop; my own copy was purchased from Maptech, a VAR+MSP in Chennai. By the way, I just found out AVG are HQd in little Cyprus (lovely country for a holiday). Anyway, I digress… I’m not saying we’re doing exactly the same as AVG – just that ‘new business models’ that were previously unfathomable – are now ‘happening’ and are ‘possible’.
• YES! The Vembu Home UI will, at a later date, be made available to service providers too – to offer to their customers. In fact, since the EULA (will) allow only for ‘home usage’, business users will primarily be getting their ‘slice’ of Vembu Home – through our channel partners! Vembu Home is still young – it’s in Private Beta. At this time, we are looking for adoption – and feedback. Once all the smooth edges have been further smoothened, we will offer our partners the option of using the sexy, hot Vembu Home UI with their customers. And once we’ve done that for some time, we will also offer branding options. Build-O-Matic (our automatic build generator used by most of our partners) was not built for Flex+AIR. It was built for our browser UI (we were the first to have a browser UI all the way, by the way). We need to reinvent the wheel (rather, Build-O-Matic) here. Reinventing a wheel takes time.

So, honestly speaking, what do we hope to achieve with Vembu Home?

• Building a Brand, for one. We want our partners to be able to go to a customer and proudly say they’re using a “Vembu Powered Solution”. Vembu Home is one way to facilitate this – by building the brand equity for the Vembu+StoreGrid franchises. Since Vembu Home is also “powered by StoreGrid”, partners who are using a “Powered by StoreGrid” badged (advanced co-branding) UI will hopefully walk a little taller. And honestly, it really gets our goat when another vendor introduces a feature we’ve had for some time – and the net-o-sphere behaves like it’s the best thing since sliced bread. We shake our heads in disbelief and go “If only more people knew what we do”. Vembu Home is an effort in that direction (towards making us stop shaking our heads in disbelief)
• Second, Experience. Putting our money where our mouth is! In spite of powering the backup business of 1,500 providers, nothing beats doing it yourself – to understand pain points of your partners. Besides the software part, this also helps us build our capabilities in Cloud hosted backups. Next time a service provider asks us “does this Amazon thingie really make sense for my kinda business” we can look at him squarely in the eye and answer him accurately – hopefully.
• Thirdly, new opportunites: Since Vembu Home is much better than all the backup software that (sometimes) come bundled with External Disk Drives, we’re also hoping to land a few OEM deals with Hard Drive manufacturers who really care about how their customers derive value from their hard disks. So, that’s another objective behind Vembu Home. If you are a hard disk manufacturer, please try Vembu Home. Then, contact us.
• (It’s cliché time) Last & certainly not the least: MARKETING. Having a consumer ‘angle’ allows us to do ‘things’ we typically wouldn’t do – with just a B2B product. Wait till you see our “Cloud Cloud Maybe” parody video to know what I am talking about. Trust me, it’s worth the wait. We’ll be doing a lot more ‘crazy things’ we wouldn’t have done earlier. Vembu Home affords us the canvas to do so. Heck, we even have FaceBook pages for Vembu Home & StoreGrid. Vembu Home tweets; so does StoreGrid. And I’m getting my ear pierced, my arm tattooed, and riding a Segway to work! Scratch that last bit.

Basically, a lot of it boiled down to ‘building our brand’. Honestly, we don’t believe there’s a lot of money (yet) in the way consumer backups are currently pitched. We  believe the existing leading consumer backup services are bleeding – and bleeding bad. Especially with their unviable ‘all you can eat’ models that spend 4X to get a customer whose lifetime value is X. There are many examples of companies that can afford to bleed! Typically, they are acquired by companies that have other priorities, highly funded or bored with what they’ve done for years and looking for new stuff to do.

And we – with our ‘boring’ business focus? We’re doing well (could always be better though) with our focus on businesses. Thank you very much! And we recently started making some profits and reaping off those years of sowing (development). And…we still believe business would be much, much, much better off using a service provider for their backups – especially if they truly care about the data on their file servers, exchange & SQL/MySQL servers. Especially, businesses who want to do online backups. They are better off doing it through a local trusted service provider, who provide more personalized managed services, rather than to a vendor who cannot afford to provide personalized managed services. The reason is simple:  Backup is not Skype. Business Backups require continuous monitoring and management which only a focused IT service provider can provide. No mass market vendor can provide that. Vembu Home will help us improve our brand and ‘business’ business – through service providers.

We also believe online backup doesn’t work for everyone & for all data. Hence the FREE local backup approach for Vembu Home. Of course, we hope the FREE bit will help build our brand – a la AVG. In fact, we will be taking elements of this approach (free / local / online / cloud etc) into a strong reseller play ‘model’ that we’ll be unveiling in a few months – it’s heady stuff. I know that sounded vague. I’d love to tell more but if I did at this time, I’d have to shoot you. Stay tuned for more on “Operation BoDerek”.

I think that about covers almost all we had to say. Any longer and this will be a book on Amazon.com

Thanks for reading. Still have questions? Feel free to post them below, and we’ll do our best.

PS: admit it – you were planning to lookup “Axillary Hyperhidrosis”.

The above post was written by Lakshmanan (Lux) Narayan of Vembu Technologies. Vembu Technologies is a backup software vendor whose product, StoreGrid, powers the online backup services of a large number of service providers across the globe. Besides remote backup, StoreGrid is also used for on premise backups of workstations and servers at various companies & universities.

Vembu Home is the only FREE consumer backup solution for free local backups and optional Amazon Cloud backups. Get your FREE COPY now.