Starting today, Carbonite is shipping an SMB on-premises hybrid backup and recovery solution that threatens to disrupt the SMB BRD oligopoly, that is effectively limiting channel partner choice to just a few high-end solutions. I liken Carbonite in the BDR space to Uber, a company currently breaking up the regulated taxi industry, and this is exciting stuff. Having met with Carbonite last week at its Boston headquarters (see photo right), I can see that it thrives on and embraces the role of being a disrupter.
And its good news for SMB channel partners. By my simple calculation, having more choices will lower prices. That’s what free and competitive markets do. Carbonite lands at about 50% less than the “Big Four” BDR solutions on the market. It all starts at $99/month with no upfront fees (hardware, program or license). And Carbonite further disrupts the status quo by introducing greater duration flexibility. There’s even is a 30-day refund period upfront. As of this writing, there is no annual commitment, so you can use this month-to-month and return if needed, though Carbonite reps said that they will be offering an annual option for clients who prefer that model.
“We are reinforcing our commitment to our channel partners and the small business market with the launch of the channel-exclusive Carbonite Appliance,” said David Maffei, Vice President, Global Channel Sales, Carbonite. “The Carbonite Appliance is a simple, secure hybrid backup solution that’s just right for our partners’ small business clients. The local data recovery and automatic cloud integration allow partners to protect their clients’ most important asset – their business-critical data. The complete bare metal backup and recovery ensures small business clients can get right back to business.”
It’s a well-funded channel play by a company that can afford to be disruptive. Carbonite is a publically-traded company that has to report its financials. With a whopping revenue per employee of $265,613, its overall revenue is north of $107M (US) and it recently enjoyed 27.3% sales growth in 2013. Carbonite also reported zero debt and, here’s the kicker, it’s got around $70m on-hand to enter the SMB channel with. That’s real money! Its stock is at the low end of its trading range ($11.75 share), and while analysts are neutral on recommendations, I’d offer that the Wall Street 1% doesn’t “get it.” The Carbonite appliance is a disruptive game changer.
Now we get to the question on everyone’s mind: Why?
The CEO of the world’s largest SMB IT Pro franchise organization once told me this: “if anything…our guys are cheap.” Carbonite not only brings its cash “war chest” forward, but also a favorable brand (sit in an airplane seat and ask if the person next to you have heard of Carbonite and what do they think).So with the commoditization of IT, Carbonite’s SMB BDR appliance play as the low cost provider is aligned with what I’d call the SMB channel yield curve. Lowering costs for you so you can lower your costs to customers.
Bottom line: Carbonite has signaled it’s in it to win it and it’ll do so by matching the speeds and feeds of the elite BDR solutions at significantly lower costs. More on this later. For now, I gotta run, as my Uber ride share is here, but let me know what you think!
