How to Choose an Online Storage Service

Online storage – uploading your data over the Internet to a service provider’s data center – makes such perfect sense that the market is now glutted with vendors all hoping for a share of the anticipated revenue. And that is both a good thing and a bad thing.

Storing your data online, also called "cloud storage" however, makes particularly good sense for small businesses, and especially for highly mobile employees. Here’s why.

Online services save you the trouble and expense of setting up and managing backup and archival storage systems. You typically pay the service provider for as much capacity as you need, or sometimes for unlimited storage – and you don’t pay very much for it.

Because the data is stored remotely at a secure data center rather than on your own premises, it’s in some ways safer. If your office burns down, you can restore data over the Internet, from anywhere.

And if you need to restore data or access archived or shared files while traveling, you can do it without having to rely on potentially insecure and hard to set up virtual private network (VPN) connections to your office. Plus, again, you can access files from any Net-connected computer.

An Overheated Market

Competition is generally a good thing – it keeps prices low and spurs innovation – but you can also have too much of a good thing.

A glutted market, especially in this case where vendors are still experimenting with pricing and business models, means that choosing one to serve your needs and provide reliable, secure service over time can be a confusing crapshoot.

You might think that buying from an established vendor would protect you from uncertainty, but Hewlett-Packard recently closed down its two-year-old online storage service, HP Upline. Others have also disappeared, including highly rated sites.

Still, there are reasonably well-established providers. And many of these services are so inexpensive, it’s feasible to use more than one to provide redundancy.

Sorting Through the Options

Online storage services fall into two main groups. Some, such as Google Docs (part of Google Apps), focus mainly on file sharing, providing storage so you can post documents to a server on the Net and let other people see and even edit them. Microsoft’s free beta trial of Office Live, a file sharing and collaboration-type service, includes Office Live Workspace which provides up to 5GB of free storage.

Other vendors, such as Mozy, focus mainly or exclusively on backup. Some companies, such as Box and Egnyte, which we wrote about here, combine both functions. We’ll focus on the backup-type services.

Most companies provide a time-limited free trial of their service. Don’t buy any service without trying it first. And many offer some storage for free, hoping you’ll eventually sign up for more. The online backup providers typically offer 2GB, which may be enough for many small businesses to back up their most vital data.

One other way to differentiate online storage services: some provide downloadable client software to manage your online storage, while others, including most of the file-sharing type, are browser-based.

A browser-based service has the benefit of allowing you to access files from virtually any computer. But client software usually makes managing files easier and faster.