I've implemented tapeless backup at several of our customer sites. The cost is obscenely cheap, but it's not for everyone. The advantage it provides is the ability to ship it easily once it's in the final format. It's "reshapable" so that it can be stored on a SAN easily, but can also be "offloaded" to real tape if the requirement arises. Strangely enough, it seems by my quick check that so far only universities have gone completely down this path (at least in our customer base), but there is no reason it couldn't be done anywhere, I think that cost and ease of setup and use are the major factors though. I know that tapes are cheap, but to a university, the network is cheaper.
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