Mozy Founder Josh Coates launches Instructure today. He’s hoping to disrupt the entrenched player in the University LMS space, Blackboard, and take a big part of its $377 million or so in revenue.

In 2007 EMC acquired Mozy, an online backup solution, for $76 million. Coates stayed for another year, then left.

Since then he’s been helping Nepalese refugees integrate into American society, and he’s a big WWII buff. He purchased and restored a M18 Hellcat Tank Destroyer. You can see the restoration process here (he keeps it in his garage). And here’s a video of his wife blowing the crap out of the side of a gravel pit.

I like how Coates rolls. The guy has a fully operational M18 Hellcat Tank Destroyer in his garage.

When he’s not blowing things up or helping other people, he teaches a venture startup course at Brigham Young University. And that’s where two of his students came up with the idea of making a better Blackboard. If you’ve been in college in the U.S. since around 2000, you’ll know all about Blackboard.

Last year the company raised around $1.5 million, nearly half from Coates himself, and got to work. They now have 20 employees and working with twenty six educational institutions, some of which have left Blackboard entirely.

Instructive is offering their Canvas LMS product as a hosted SaaS solution. Universities can also download an unsupported open source version of the product, or install a for-fee version with support.

Here’s a commercial the team created for the product, based on the Apple “1984″ commercial. That flamethrower is also his. Watch to the very end to really see it in action.

The new company is focused on protecting and managing personal digital data. It will continue to offer Mozy’s personal backup product and will add new products over time. The Mozy platform, which now stores over 10 petabytes of user data, has over a million users, 200,000 of which are paying customers. We were particularly impressed with its Mac product, first launched in mid-2007.

There isn’t much information on what new applications the company will launch. But if PI Corp. is anything to go on, look for rich metadata and contextual information to be a part of it. PI Corp. was acquired before launching their flagship storage/backup product. But their website suggests they are far more focused on managing, organizing and searching files than simply backing them up – something Mozy never tackled. The combination of the two platforms is more than interesting.

Online backup site Mozy is giving away 50 free year-long accounts to commemorate the official release of their Mac backup client.

To get yours, send a message to techcrunch@mozy.com that answers the question, “Why do you deserve free backup service for your Mac?” Data-loss horror stories are encouraged. The Mozy team will select the fifty best responses and will email the winners instructions to claim their free accounts.

Mozy is a cloud-based alternative to Apple’s Time Machine, which works very well but doesn’t have the added security of off-site data backup. And at $4.99 a month for unlimited storage, the price is couldn’t be much lower.

We covered Mozy’s Mac version last April when it was introduced as beta. The final version of the software has introduced support for Apple Mail and Leopard, along with a host of technical features like bandwidth throttling and compatibility for programs with resource forks.

In addition to local backup solutions like Time Machine, Mozy faces competition from online storage sites such as Apple’s .Mac, Sugarsync, and recently-released Syncplicity. Carbonite, one of the leaders in this space, works on Windows machines but has yet to release a Mac version.

First the bad news. ProtectMyPhotos, which launched in October 2006, is done. They spent $280,000 in seed capital to try to make the idea work, but ultimately they couldn’t compete new backup services like Mozy and Carbonite. Mozy was recently acquired by EMC for $76 million, and Carbonite has raised $21 million in capital.

We’re therefore putting ProtectMyPhotos into the TechCrunch DeadPool.

But Shaw also writes to tell us that his second startup, DocSyncer, is going gangbusters. The product auto-syncs word documents on your hard drive with Google Docs. In the last five days, he says, users have auto-uploaded more than 200,000 new documents to Google Docs via the product, making DocSyncer by far the largest single contributor to Google Docs. The product appears to have legs.

There’s still no guarantee that DocSyncer will make it as a business, but users like the product. That’s a good start, and now Shaw can focus all of his energy on making it work.

This was an excellent liquidity event for the Mozy team, which had raised just $1.9 million back in 2005. The company claims 300,000 business and consumer customers for their online backup storage solution.

We first covered Mozy in January 2006 as part of an overview of the current generation of online storage solutions. The company has a dead simple way for users to back up their computer hard drives online. Download their software (Mozy supports both Windows and Mac machines) and the backups occur slowly over time. If there is ever a problem, you can restore your hard drive from Mozy’s servers.

Mozy’s chief competitor is Carbonite, another company we’ve tracked over the last couple of years. Carbonite has raised $21 million in venture financing.

Mozy, by contrast, raised just $1.9 million in capital. The round, closed in May 2005, was led by Wasatch Ventures, with participation from Tim Draper and Novell co-founder Drew Major.

That’s quite an exit for Mozy – $76 million on just $1.9 million raised. It’s almost identical to StumbleUpon, which was acquired by eBay earlier this year for $75 million after raising just $1.5 million in venture capital.

Rumors circulated a year ago that Mozy was close to being acquired by Google for significantly less than this. The company eventually passed on the deal, which must have been a tough call. They clearly made the right choice in waiting.

Look for an official announcement of the Mozy acquisition in the next few weeks. Congratulations to Josh Coates, Mozy’s CEO (who refuses to comment on the deal), and the rest of the Mozy team.

Previously Mozy and competitor Carbonite were excellent ways of backing up Windows based hard drives. Both are very reasonably priced at about $60/year – Mozy allows 2 GB to be stored for free and charges $5/month for unlimited storage, while Carbonite has a 15 day free trial and then charges $5 per month with discounts for pre-payment. Neither charge for bandwidth.

With both solutions you download and install the software and the service then slowly begins to backup your hard drive based on your settings.

Carbonite still only supports XP (and is a great choice for Windows users). Mozy is the only choice for Mac users and I highly recommend it after my testing. You can make a simple request to back up up the entire hard drive, or get more granular and just back up, say, iTunes and iPhoto.

MozyPro is similar to the consumer Mozy service, but includes server backups, 24/7 support and admin control for the IT department. The service launched last December and 3,200 businesses are now using. GE is now one of those businesses.

Mozy and MozyPro are administered through a desktop client and automatically backs up data on the PC every two hours. Thirty days worth of versions are retained, and users can go back and restore any of those versions.

Rate card pricing for consumers is free for up to 2GB of storage, and $5/month for unlimited storage. Businesses pay $4/month for each employee, plus $0.50/GB/month of stored data. Bandwidth is free. As a side note, GE certainly didn’t pay rate card rates – a deal this large would have a substantial discount.

The company is backed by Wasatch Partners, Tim Draper and Drew Major. They have 25 employees.

We first mentioned Mozy back in 2006 when we covered the major online storage providers. On the consumer side, Mozy competes with Carbonite and others. At the enterprise level, Iron Mountain and EVault are the entrenched competitors, although Mozy says they have a 10x cost advantage over those services. Google and Microsoft will also have products in this space.

A very large untapped market for online backups are the OEM PC manufacturers, who should be providing a free trial with every PC. Mozy is now positioned nicely to land such a deal. After a grueling due diligence process by GE, the PC guys should be confident that Mozy is as secure as their competitors. And charging 1/10 of what they do is great for the bottom line.

Since then I’ve been very “don’t let this happen to you” when I talk to people about backing up their files. The number of digital media files alone on my computer skyrocketed over the past few years and to lose that stuff would be devastating. You likely feel the same way about yours.

To that end, I decided to throw down some rules to follow to setup a successful file backup routine.

Pick A Solution and Stick With It:

Bad backup software can deter you from regularly saving your files and give you a false sense of security. A perfect solution not only makes it easy to save your files, but should make it painless to restore them as well.

As former software editor for Computer Shopper magazine, I got to see and test many backup solutions. Memeo AutoBackup remains one of the best, if not the best, I’ve used. I’m not the only one that thinks it’s great either. Seagate added the software to its new line of external drives. D-Link bundles it with its DNS-323 Network Storage Enclosure. And Buffalo Technology includes it with most of its external storage solutions.

Why I like it so much is that aside from a breezy setup it lets you maintain a backup routine without any hassle. Save to multiple locations, easily restore files with one click, encrypt and password protect your files and track changes to all of them as well. The list of features is lengthy for an app that costs just $30, but again, it’s its simplicity and ease of use that’s key. The company seems to understand that if you have to do much of anything to save your crucial data, you likely won’t.

Whatever you decide to go with though, even if it’s just dragging and dropping new files to a different storage location than your hard drive, you have to keep backing up regularly.

Another option is ChronoSync, an OS X solution with lots of set-it-and-forget-it-ness.

Pick A Location and Triple It:

Whether or not you’ve had a desktop or notebook drive fail on you, the fact is, they do. They fail all the time. Regardless of manufacturer, the price you paid, the length of the warranty—they can and will fail. Now think about what’s inside that external backup hard drive. That’s right, it’s a hard drive and it can fail just like the one in your computer.

The moral is, don’t rely on backing up to only one location. Weather catastrophes, forest fires, mudslides, house fires, burglaries—these things just happen. Backing up to an external drive is a good start, but saving to two more places means you likely won’t ever have to worry about lost files.

Keep a set of important files saved to CDs, DVDs or flash drive and give them to a friend or family member you trust or if you have a safety deposit box, keep them there. (You should of course encrypt the files if they’re really important.) Save a set to an external or secondary internal drive. Put some online; services like Mozy.com and MediaMax.com offer free and paid options, and Memeo has a storage service, too. The point is, one backup is good, three backups to different locations is best.

Pick A System Maintenance Plan and Use It:

Much like people tend to skip over their backup procedure with a click of the “cancel” button, they avoid system maintenance as well. Why is this important to backing up your files? Well, it will do you little good to save copies of your files to other locations if they are corrupt when they get transferred.

There are a ton of system maintenance products on the market. One of my favorites is VCOM’s $49.95 Fix-It Utilities 7 Professional. It’s bright-and-shiny interface is easy to follow for novices and the suite has almost everything you’d ever need for keeping your PC tuned and free from spyware and viruses as well.

The Help Key is a weekly article about making the most of your high-tech gear and appears every Monday. Read more of The Help Key here

The online storage market is evolving fast. In the past, users could expect no more than a simple service where files could be slowly uploaded and downloaded from a mapped virtual drive or a simple web based interface. Little competition (and the bursting of the bubble) led to very high prices for a minimal amount of storage.

Over the last year a slew of new services have launched (some are launching in February) with serious web 2.0 features, reasonable pricing (including free unlimited storage) and, in at least one case (OmniDrive), the ability to read/write directly to the file with local applications like Office, on the remote server. This last feature speeds the process of writing to files significantly by skipping the requirement to download the file to the hard drive first.

The Online Storage Gang
We looked at a total of thirteen companies. They are: AllMyData, Box.net, eSnips, Freepository, (the unfortunately named) GoDaddy, iStorage, Mofile, Mozy, Omnidrive, Openomy, Streamload, Strongspace and Xdrive.

Another service, Zingee, has yet to launch and may also (or may not) have a compelling offering.

Of the thirteen companies that we researched for this post, three really stand out. Australia-based OmniDrive (unfunded but not for long) is the clear leader in features. Box.net and Streamload are also very good choices.

The services can roughly be broken down into storage-centric and sharing-centric. Some services, like Mozy and the unfortunately named Godaddy, are centered on storage only. GoDaddy offers online file backup with very basic uploading and downloading features – effectively a remote network drive. They are a bare-bones service with a fairly attractive price point ($20/year for 2 GB). You will not find sharing or other advanced features here.

Other services offer storage but really focus on sharing files. There are a number of options here, but the best (OmniDrive, Box.net and Streamload) offer full private and public sharing. In addition, I really like the way Box.net approaches group folders, where any number of people can have read/write priviliges. Omnidrive is close to launching this feature as well.

Web 2.0 Features
Most of the new players (possibly with the exception of Mozy) are laser focused on key web 2.0 features. The best have multiple folders (private, shared, group, public), RSS feeds for each folder, etc. A couple, including Omnidrive, have also built features that allow subscriptions for RSS enclosures (such as podcasts), so that those files are stored in the cloud instead of your hard drive.

And OmniDrive has one key feature that no one else matches: full read/write functionality on the file, in the cloud. Open a file from your Omnidrive, edit it and write it back to Omnidrive without ever downloading a local copy. Once they release their API, I imagine many, many services will mash the Omnidrive storage service into their applications. It is just too compelling not to.

AllMyData, unique among the group, is a full peer-to-peer solution with “grid storage”. This means you give up storage on your hard drive for other users, and you get theirs in return. Putting aside the fact that giving up storage is exactly what users don’t want when looking for a solution, the fact that others’ computers must be powerd up and online for you to be able to access your files is a serious service limitation.

Pricing
Pricing is all over the place, although I expect it to settle down as competition drives some of these companies out of the market.

Streamload is the most aggresive on pricing – offering a full 25 GB free to every user.

The obvious way to market these products, in my opinion, is to boldly offer unlimited storage for a nominal sum. Costs can be covered via a one-time sign up fee and through charges on download bandwidth (once I need the files, I’m willing to pay to get them).

I firmly believe that online storage should, and will, be packaged with new computers and applications like Windows. The amount of unprotected but hugely important media content out there on hard drives (music, movies, home movies, pictures), is growing every day. People need somewhere to back this data up for a reasonable fee, and it seems to me that Dell and others should package this service with the PC. All initial software would be auto stored, and users would have the option to continuously syncronize their hard drive with the virtual drive.

And while this business has thin margins, this is a multi-billion dollar per year revenue opportunity.

The Chart
The information above simply highlights the much more detailed information in the table linked to the left.

We were not able to speak to every company directly and the information available on websites is usually incomplete or hard to find. Therefore, we’ll be updating this table as more and better data comes in. Also, I’m sure I’ve left out any number of competitors in this space, so I will be updating the list of companies as well.

For the full feature comparison table, see here.

Research by Adam Bouskila
Research for this post was conducted by Adam Bouskila, a 17 year old genius who lives in Vancouver, Canada. I cannot thank Adam enough for his hard work, and I hope to work with him again on future posts.

Update: It’s clear to me from comments and emails that this space is exploding, and that I missed a lot of companies and features. I also hadn’t realized Fred Wilson posted on this subject last December, but he has an excellent post here.