Silicon Valley Watcher - reporting on the business of technology and media

Fabrik on Monday launched an unlimited backup service for consumers for just $5 per month and a line of external hard drives for professional uses. It is part of an initiative it calls "Storage 2.0."

This young company has an interesting business model which combines physical data storage with data storage in the cloud plus a nifty user interface that is rapidly becoming a simple way for users to manage their media wherever it sits, at the office, at home, or on online services.

This online/offline approach is also reflected in its "bricks and clicks" strategy. Earlier this year it acquired the consumer products business of SimpleTech to give it access to physical distribution channels in large retailers such as Best Buy.

Mike Cordano, the CEO and Founder is assembling an interesting team. He comes from the hard drive industry, he used to be a senior exec at Maxtor. His team also includes ex-Apple people and developers creating online services.

Fabrik is up against giants such as Seagate but it is able to source its components from many drive and component suppliers, plus it has hired top designers for its consumer external drives. It has been operating MyFabrik, an online service for managing media.

"MyFabrik was set up as an experiment so that we could find out what consumers want in terms of manging their media and now we are applyng those lessons in services such as Fabrik Ultimate Backup," said Mike Cordano. He added that over the next few months Fabrik will release additional online services and also hard drives to move the company into the top end of the hard drive business.

Foremski's Take: Fabrik has a bold strategy and it is one that it has little choice in following. If it is to be successful in the data storage business it has to do it offline and online.

If it can build out its online services so that it offers users one-screen for managing all their media content assetts, such as photos, videos and music, it'll be in a very strong position. Others are also heading in that direction such as the big drive makers.

Fabrik has agility on its side and if it can convert its external drive users into online users, it stands a good chance of building a valuable business. I have a video interview with Mike Cordano which will be posted later.

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Please See:

From Fabrik:
Online Backup Service Press Release
SimpleTech Pro Drive Press Release

SVW:

Fabrik's Innovative Web 2.0 Business Model: Media Storage in the Cloud or on Your Desk

Web 2.0 heads offline: Fabrik acquires much larger SimpleTech group in $43m cash deal

Technorati Tags: Fabrik

The iPhone is by far and away the best phone I have ever owned. Bar none.The hype is understated.

The weight and size of it, and the advanced touch screen, and look and feel, are tremendously engaging. The interface is gorgeous and the content is amazing. This could potentially replace my laptop... seriously.

Wherever I went on Saturday, if it was out, strangers wanted to chat and hold it and play with it. Yes, it did take me a while to figure out how to make a phone call, but that was almost an afterthought because it is so much fun to play and tinker with.

Pop the wrap

There is nothing out there that comes close to the iPhone experience.

The iPhone experience starts with popping the shrink wrap and unwrapping it, and getting it free of its box and tightly engineered packaging. You quickly realize that there is nothing to compare it to.

(BTW, if you know what's good for you and your bank balance--do not try this at home :-)

I put a terabyte of data storage in my Cosco shopping cart on Sunday morning, next to the blackberries and the rotisserie chicken. It probably won't be the last time...

Sarah Spitz from radio station 89.9 KCRW-FM in Santa Monica says Dave Goldberg's departure from Yahoo Music was a big surprise since he had just been on a panel discussion that was posted yesterday:

Jason Calacanis hosted, Steve Marks of RIAA, Dave Goldberg, Eric Garland of Big Champagne.com and Celia Hirschman, of indie label One Little Indian discussed the subject.

http://www.kcrw.com/etc/programs/pc/pc070213the_music_industry_a

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2.13.07: Yahoo Music execs resign

UPDATE: Here's the official statement from Yahoo: Statement: David Goldberg and Robert Roback, Vice Presidents and General Managers of Yahoo! Music, have resigned. As the founders of LAUNCH Media and the leaders of Yahoo! Music, Dave and Bob have made...

Posted by Richard Koman on February 13, 2007 10:16 AM

Yahoo exec says removing DRM from music boosts sales

Steve Jobs' recent call to take DRM off music allies him with Dave Goldberg, head of Yahoo Music, one of the top competitors to Apple's iTunes. I met with Dave Goldberg recently, when he was in town along with other Yahoo...

Posted by Tom Foremski on February 11, 2007 5:25 PM

To succeed in the consumer space, scale is very important which means an M&A wave is inevitable. Fabrik, a startup based in San Mateo, late Sunday announced it had acquired the consumer products business of SimpleTech.

Fabrik offers online consumer media storage along with software to manage all types of media such as movies, music, and photos. This deal gives the web services company a physical presence through SimpleTech's retail channels

Fabrik says that SimpleTech is the third largest US "provider of hard disk drive-based external, portable and network storage solutions for consumers and small business users. The purchase also includes the company’s flash memory cards, USB flash drives and memory upgrades."

It is a cash deal valued at about $43m. It also brings together executives who used to work with each other, which will help, since the two businesses are very dissimilar.

Foremski's Take: Fabrik's move is smart because it can acquire new customers for its web services business at a low cost. Customers of SimpleTech's products are very likely to be consumers looking for solutions to storing large numbers of media files, which is Fabrik's business.

Memory/storage  devices can easily be linked to online media management services such as the free version of myfabrik. Then come the opportunities to upsell premium services and other memory products into the consumer media market.

Otherwise, to rise above the noise level in consumer media would cost Fabrik tens of millions of dollars in annual marketing costs. This strategy is a more effective use of its capital.

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Additional info from Fabrik:

 www.simpletech.com.

myfabrik (www.myfabrik.com), provides a simple way for people to store, organize and share photos, videos, music and documents either publicly or privately; and myfabrik lite ( www.myfabrik.com/lite) serves as a free hosting and delivery conduit for large files and personal media. 

The two leading investors in Fabrik are Comventures and Intel Capital.  Wells Fargo Foothill, part of Wells Fargo & Company (NYSE: WFC), provided the debt financing for the acquisition. VisionPoint Capital, LLC (www.vpcap.com), member NASD and SIPC, advised Fabrik on the acquisition and the related financings.

Note: SimpleTech’s OEM/Industrial flash business is now called “STEC” and will be traded on NASDAQ: STEC. Please visit www.stecinc.com for more information.