Imation getting into cloud data backup services [Pioneer Press, St. Paul, Minn.]

Dec. 13--Imation Corp. says it has started offering a new "cloud" data backup service, a departure from its long history of offering backup on physical media like DVDs or flash drives.

The Oakdale-based company, which makes everything from magnetic tape technology that's a half-century old to tiny flash drives that unlock with fingerprints, unveiled on Wednesday, Dec. 12, two services that will allow businesses to store their data on server computers located in data centers far away from the customer.

These servers are part of the "cloud computing" movement that is sweeping technology and eliminating some of the old market for media such as CDs and DVDs that pop into a PC.

"We've had physical media in our hands for the last 30 to 40 years, and that will continue, but as the cloud starts to ramp up, we think this is absolutely a natural evolution for our business," said Ian Williams, Imation group president for Tiered Storage Solutions.

Imation divided its services into two offerings -- Imation ONE Backup Service for just desktops and laptops and Imation PRO Backup Service that can handle business servers as well.

The company believes there is a vast market for business data backup because in spite of all the warnings, 80 percent of businesses still do not back up their data offsite, where it would be protected from a disaster at the business, Williams said.

Imation's service uses software that it bought last year from a Massachusetts company called Nine

Technology. Imation says Nine's technology will differentiate its service from other cloud backup services.

Nine Technology's software eliminated redundant data backups, which shortens backup times and allows quicker data recoveries, said Tom Gelson, who helped found Nine Technology and now works for Imation as director of business development.

Williams declined to say what Imation expects in sales from its new business, but it faces some challenges.

Not only are there many similar data backup businesses, but many of them are not impressing customers.

A survey of 600 companies this spring showed a majority of customers who turned to the cloud for backup storage were dissatisfied, with two-thirds saying it cost too much, according to a study commissioned by StorageCraft and Symform, a pair of data backup and cloud computing companies.

Mark Miller, an analyst who covers Imation for Noble Financial Group, said the edge Imation might have over any other data backup service is if it used its own hardware, "which could cut them a cost advantage over competing services and provide a market for their systems."

Imation isn't running its own data center, though. It is leasing out space on third party servers in Boston and another, undisclosed location, according to Williams and Gelson.

Imation's launch of its cloud backup services also comes amidst a company reorganization announced in October. The company wants to sell off its consumer electronics business and slash 20 percent of its workforce worldwide.

Meanwhile, sales of its oldest media -- magnetic tape, CDs and DVDs -- fell by double-digit percentages in the third quarter, far quicker than the company expected.

Leslie Brooks Suzukamo can be reached at 651-228-5475. Follow him at twitter.com/suzukamo.

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