In a blog post today, Microsoft's Scott Gu officially announced that the Windows Azure Backup Service is generally available. The Windows Azure Backup Service allows IT admins to backup files and folders that reside on local Windows Server to the Cloud. Blob Storage is used to store the backups (see Understanding the Windows Azure BLOB Storage Service) and the downloadable Windows Azure Backup Agent is utilized to create the sync conduit between the local server and the Cloud. The Windows Azure Backup Agent supports Windows Server, System Center Data Protection Manager, and Windows Server Essentials. A separate, newly released agent also supports SQL Server Backups (read about that here: Backup All Supported Versions of Microsoft SQL Server to Windows Azure).
Before data is transmitted to the Cloud, it is encrypted using an encryption key that is held and maintained by the customer.
