As the name implies: BACKUP Data to protect against Data Loss. Data Loss can be in several forms and caused by several things:
1) Virus and their ilk
2) Hardware failure (it's not uncommon for Hard Drives to fail)
3) Accidental/Intentional Data Destruction (An accidental click of the 'Delete' button...inexperienced user on a common computer (children or relatives), Disgruntled family member/employee, Software/hardware caused system crash.
4) Theft/Vandalism
5) Fire/Flood/Act of God
6) This is a long-shot, but let's just mention a loss of the Computer Administrator which causes inaccessibility to computer data (Master Computer has complicated PW and Person in charge of that PW/Data dies). Hey, unlikely, but possible.
Methods of Backup:
1) OS-based Backup Software (typically backs-up to the Primary Hard Drive)
2) Hardware-Based Backup
a) RAID or similar (prevents from single or multiple disk failures
b) Network Backup device (saves data to a location (either HD or otherwise) which is not located on the same computer as the data itself)
3) Burn-to-Disc method (perform regular scheduled backups to a CD or DVD and then store this disc(s) in a safe location (fireproof safe if available)).
4) Online Data Backup (Paid Service such as Cryptonite, Cloud-based storage, ISP provided storage, web-based FTP or similar, etc). This is Storage Space either Free or otherwise which is located on Servers which can be accessed via the Web/internet/VPN/etc...they are NOT located at the same location as the Data/Computer itself.
Each of these options have their strong points and weak-points and each individual much choose the level of protection that they deem necessary as well as staying within whatever budget they have available for such an endeuvour, and all while understanding their own level of computer/technical expertise. Some of these options can be very technical and/or time consuming (usually only at the initial setup).
Many may wish for simple, free, easy Data Backup...For you, I'd recommend OS-Based.
Others may wish for simple & cheap: OS or Software-based Burn-to-Disc.
Others still may want Real-time (or close to it) and aren't so concerned with ease or cost...for you, I'd recommend HW-based options (RAID or Dedicated Backup Drives)
Some may want mobile access to their data and are less concerned about the sensitivity of their data in which case I'd recommend Online-based storage.
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Data stored in backing storage ispermanent so it is NOT lost when the computer is turned off.
To store programs and data.
They are also used for a variety of OS management purposes, Virtual memory, and storage of the RAM image while the computer is hibernating.