
The initial years of these large industry service providers were about capturing market share and understanding the importance and the role that these online backup providers were playing in the web services arena. More online/remote backup services came into existence during the heyday of the dot-com boom in the late 1990s. During that same period the need for an affordable, reliable online backup system was becoming clear, especially for businesses with critical data. While faster modems and more secure network protocols were in development, tape backup systems gained in popularity. In the mid-1980s, the computer industry was in a great state of change with modems at speeds of 1200 to 2400 baud, making transfers of large amounts of data slow (1 MB in 72 minutes).

Consumer online backup companies frequently have beta software offerings and/or free-trial backup services with fewer live support options. High-end LAN-based backup systems may offer services such as Active Directory, client remote control, or open file backups. Providers of this type of service frequently target specific market segments. There are many products on the market – all offering different feature sets, service levels, and types of encryption. The online backup system typically collects, compresses, encrypts, and transfers the data to the remote backup service provider's servers or off-site hardware.

Other newer cloud backup services run continuously to capture changes to user systems nearly in real-time.

Some systems run once a day, usually at night while computers aren't in use. Online backup systems are typically built for a client software program that runs on a given schedule. Such backup services are considered a form of cloud computing. Online backup providers are companies that provide this type of service to end users (or clients). A remote, online, or managed backup service, sometimes marketed as cloud backup or backup-as-a-service, is a service that provides users with a system for the backup, storage, and recovery of computer files.
