Online backup provider offers software, which has to be installed on the computer. This allows the user to select the backup files, takes care of Internet connection, encrypts and compresses the data and transfers it through the Internet to a secure remote location. The prominent advantage of using online backup is the disaster recovery offered by offsite storage and is easy to use.

Another advantage is that online backup can be done even at odd hours because the providers work round the clock, 24x7. Most importantly, online backups decrease the amount of media needed to keep track of, since much of the backup storage is offloaded to the offsite storage. A person need not purchase new equipment and there are no ongoing media costs, staff costs and so on. The running costs are also meager. Setup and installation of the software is quite simple and can to be downloaded in a matter of a few minutes.

Data recovery is also very fast since the user need not search for the right tape or wait for the staff to recover the lost data. Online backup is automatically completed so that after the process is over, the backed up files can be accessed by anyone (with permission), thus enabling file sharing with traveling colleagues, clients or home PCs.

But the limitations of online backup are that it fully depends on Internet connections and therefore requires permanent broadband connection to handle significantly large volumes. Also, the initial backup will take a long time because a complete copy of the data must be encrypted, compressed and copied. Once initial backup is complete, subsequent backups will only backup the files that have been changed, making the process faster. Since online backup companies compress the data and do only incremental backup, it may sometimes decrease the value of the backup and increase the restoration time.

Though a third party holds the invaluable data in online backup, in reality, they are quite safe and secure because before being transferred, the backup data is encrypted to a military grade -128 bit level. Therefore it is impossible for anyone to intersect or decrypt the data except for the user.

The data storage center is also reliably secure, which has invariably class- A facilities equipped with fire suppression, security cameras, personal access control, electricity generators, mirroring techniques and what not. In fact, the storage premises are far more secure than the client's own premises.

Online backups can be a valuable addition to the data protection but cannot be a replacement for manual, onsite backup.