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Online Backup: What Is It And How Does It Work?


How many times have you said “Back it up” to colleagues, customers, and even friends? A lot, we’d wager! You’ve probably heard it too.

Nothing is worse than having a computer crash and hearing, “did you back it up?” knowing you did not. Online stores and other web-based businesses are especially vulnerable to losing data.

An online backup is one of the best ways to protect your data and business from unexpected disasters. Storing data safely on an encrypted, remote server is an easy and cheap way to safeguard your most important files, customer information, and more. We've got you covered if you have never heard of online backups. Here’s everything you need to know about online backups.

What is an Online Backup?

An online backup is when your data is copied to an “off-site’ or cloud storage solution. Services will consistently and securely store copies of your data in the cloud, so your data is accessible anytime you get online. An online backup is integral to a business’ disaster recovery plan.

It’s important not to confuse online backup systems with cloud storage systems such as Google Drive or Dropbox. These systems require you to manually upload individual folders or files to their cloud services. Typically, you would upload some documents and media files you wish to share with others, and cloud access makes that easy. In contrast, an online backup automatically uploads all files, including documents, media, and systems files, to a cloud server via the Internet—an online backup copies your entire system and all associated data and stores it in the cloud.

How Do Online Backups Work?

Online backups use a high-speed network connection to send data to the cloud. This connection can send specific files (or all the contents of your hard drive) to the cloud and copies of whole websites. Many backup-as-a-service (BaaS) products, including Rewind, integrate directly with online platforms such as Trello and GitHub. This allows the online backup to cover a business’s entire account and all associated data.

When an online backup is underway, your hard drives are scanned for essential files, which are encrypted before being sent to the backup company’s online servers. Much of this is done automatically. Many services allow you to choose how often you want automatic backups to occur. You can schedule them to happen periodically or continuously, or they can be triggered whenever you change your system.

All your data and files can be managed through the storage provider’s web interface or by downloading software to your computer. Online backup services generally provide an admin dashboard that allows you to access your data, view your backups, and monitor the health of your files.

Service providers use many techniques to reduce capacity, including “deduplication” to save server space. This method only copies files once and then performs incremental backups, which only back up changes made to a file instead of storing complete copies.

Online vs. Offline Backups

The standard advice is to back up your data locally on an external hard drive or a local server. Businesses have been using these solutions for decades. Offline backup systems are very convenient. They offer a one-time cost—i.e., the price of the external hard drive—and do not require an internet connection; therefore, exposing your data is less risky.

Online backups are subscription-based, meaning you must pay monthly or yearly fees. Backups are stored off-site, so your data is secure and protected if a disaster occurs at your office. An online backup service also provides you with customer service and security features. They are very user-friendly, and your files can be accessed anywhere, provided you have an internet connection.

Why Should You Back Up Your Data Online?

There are many reasons you should back your data up online. Local storage devices and systems can also be affected when a disaster (such as a flood or fire) strikes your infrastructure, causing data loss.

Major disasters are not the only threat to your data and media. Hard drive crashes, accidental deletions, and cyberattacks are common, but human error is the most significant cause of data loss.

Not all threats to your data result from natural disasters or human errors. 64% of chief security officers believe their company is vulnerable to a cyber attack. Your business may not have the resources to combat a severe attack or survive the loss of critical files. Losing even a few files for a short period could be disastrous for a business, especially when adhering to privacy laws like GDPR. All these things could cause your business or online store to suffer costly downtime. Try our downtime calculator to determine how much data loss could cost you.

You can avoid losing files in a cyberattack by using external hard drives to back up your data. However, external hard drives can quickly go missing or become damaged. Also, if your external hard drive is connected to your computer, any threat that could infect your computer could infect your hard drive, corrupting your data. Backing up locally is a good start when it comes to data security. However, you will also want to use online backups for a complete backup of your files.

Pros and Cons of Online Backup


There are many pros to using an online backup system:

Data Accessibility

Your data is accessible anywhere, any time—as long as you have a network connection. You can also use any device, including mobile, desktop, tablet, etc. Many online backup services also enable your employees to have various levels of access.

Few Hardware Requirements

Using an online backup system means you will have far fewer hardware requirements. You will not need to have additional local servers. While you may still want to keep some data on external hard drives, it is no longer required.

Reliable and Efficient

Online backup services employ the latest technology and innovations. They also use state-of-the-art facilities for their servers. Outsourcing your backup requirements will no longer require maintaining hardware and software upgrades or shouldering maintenance costs. These are all the providers’ responsibilities.


The best online backup services have all-around security. This means they protect your data from all potential threats. They don’t just protect against cyber threats. Their facilities can withstand hurricanes and have fire protocols in place. Many even have 24/7 on-site security to watch over the physical premises.


Automated online backups make life much easier for your team. You don’t have to hire additional staff or contractors to set up a backup infrastructure. Your in-house team can focus on your main product or service, not running and maintaining backups. Your provider’s customer service team ensures that any issue or problem can be solved quickly.


While we found very few cons to online backups, there are a few challenges to remember.

Requires a Network Connection

All online backup systems and services require you to have an internet connection. This would be impossible if you would like to keep your data offline. Most services will also ship you a disk or drive with your data if necessary. However, if internet services are down, for example, due to a local power outage, you may have trouble accessing your files.

Bandwidth Challenges

If you transfer large amounts of data to your online backup, you may run into bandwidth issues if you have a slow or unreliable internet connection.

Complete Data Recovery Takes Time

Smaller files can be accessed easily and quickly. However, a complete data recovery with large amounts of data will take longer and could stress your local system.

Is Online Backup Secure and Safe?

One of the advantages of online backups is the security they provide. While the servers' on-site security is top-notch, you can also expect your data to be protected from virtual threats and your privacy to be treated very seriously.

Most online backup services will provide you with a secure encryption key. This password you chose will allow you to decrypt your backups if necessary. The encryption key is yours and yours alone. Even the backup service can only help you reset the password if it is recovered or remembered. Encryption is a very secure solution with a high degree of privacy. Employees and even law enforcement will not be able to access your backups. Individuals and businesses often use password managers to keep track of their private encryption keys.

If you want even more security, some services provide full security features, including ransomware protection and two-factor/multi-factor authentication.

Choosing the Best Service

When choosing the best online backup service, there are several things you will want to keep in mind. Start by determining how much storage space you require. Will you need versioning? Will you need to scale up in the future?

Once you’ve answered those questions, you must examine encryption options and security. Do you need different levels of access for your team? If so, look for services that offer that capability.

You may also want an online backup service that understands your unique business. At Rewind, we integrate backups for online stores, including Shopify and BigCommerce, addressing concerns unique to the ecommerce niche. Our products for accountants, including QuickBooks Online and Xero, are specifically designed with the unique privacy challenges of financial data in mind.

Hopefully, your business will always retain significant data or face a disaster that threatens your infrastructure. If disaster does strike, an online backup can be a lifeline. In short, moving to an online backup system is one of the best decisions you can make for your organization. While initially daunting, the exemplary service can make it easy and efficient. In no time, you can rest easy, knowing your data is safe and secure.

Special thanks to our friends at Rewind for their insights on this topic.
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