This is the second post this week on how on-demand solutions are also moving behind the scenes to support web applications. Carbonite provides online backups for your personal computer. It works in the background when you are connected to the Web but not using a Web application so as to not reduce performance. Last week I spoke with David Friend, CEO of Boston-based Carbonite. He got the idea when a series of mishaps occurred in 2005. First, a friend’s wife lost two years of professional work and the pictures of her baby. Then David’s daughter lost a term paper she had been working on for six weeks. He spent thousands of dollars unsuccessfully trying to recover those files.

David looked into the market research and found that for consumers and small businesses only 3% do a good job of backing up files. When people have to actively do something like export files to an external hard drive, they generally do not do it. So he and his partner, Jeff Flowers, designed an online backup service that works in the background with the price point of $50 a year for unlimited storage. It only requires an email address and password to get it installed and running. It runs quietly in the background backing up any new or changed files.

David said they have now backed up over 3.5 billion files and are adding 32 million files a day. The company has had double digit month over month revenue growth for the past 22 months. They now operate in 104 countries in 11 languages. Carbonite has restored over 200 million lost files with 13% of their customers requiring a full restore and 46% of their customers requiring a partial restore. Full restores are usually triggered by a hard disk failure and partial restores are usually triggered by human errors such as accidentally erasing files.

By offering unlimited storage, David said he loses money on some clients but makes money overall. With the price of storage continuing to come down, the breakeven point keeps improving. People use Carbonite like catastrophe insurance rather than for file sharing or collaboration. I was all set to sign up but they do not yet have their Mac version ready. Beta is slated for June and people who want to participate in the Mac Beta can send an email to beta@carbonite.com. For now, I have to go drag out my external drive and back up my files again. Here is another Carbonite review.

Carbonite uses encryption to protect the security of files as it leaves your personal computer and then sends the data along the same type of encrypted data lines that are used for credit card transactions for extra security. Microsoft has now bundled Carbonite into its Money software for personal finances. Here is what TechCrunch wrote about Carbonite and here is what Backup review wrote about them.

“While the service is originally targeted for individuals and small businesses that do not have elaborate in-house backup services, the wide spread use of lap tops that are often not connected to a company network, has prompted some employees within large organizations to become users. This is another example of a web consumer service making its way into the enterprise through individual users. Once again, they find something that helps and take it to work.”