Battle lines were drawn in the UK online digital storage market this week as US firm Carbonite challenged BT’s newly launched Digital Vault offering with a rival service.

Carbonite argued that its Online PCBackup service, which offers unlimited storage to UK customers, will be more appealing than BT’s service which caps users’ storage at 20GB. The Carbonite offering is priced at £30 per year versus BT’s £59.88 per year.

David Friend, CEO of Carbonite said: “If you have a limit on how much data you can store (BT’s product is limited to 20GB), the user is forced to decide what he does or doesn’t want to back up and must negotiate a user interface that allows him to select a backup subset that is less than the backup size limit. Most users find this process too time consuming and give up since it’s just too much trouble. Carbonite’s approach is to back up all the data, whether it’s 5GB, 50GB or 100GB. Almost half our users have more than 20GB of data, so they wouldn’t be able to use BT’s service.”

Carbonite double-encrypts files before they leave users’ PCs, employing techniques similar to those used by banks, the military and ecommerce sites. The firm’s licences are keyed to the specific hardware on which they are installed, so that even if hackers correctly guess a user’s login and password, they cannot access the Carbonite backup without having the user’s physical computer.

According to Carbonite, most people do not back up their PCs regularly. Although hard drive crashes and human error are by far the most common causes of data loss, viruses are still a major cause, even if the user has antivirus software installed.

Carbonite is available online through the firm’s web site or via online retailers such as Amazon.com or Download.com. Widely available through retail stores in the US, it is expected to launch through UK retail channels by early 2007.