Yeah you're screwed. Come up with another strategy. My clients are the top N% of security professionals (they're managing source code audits), and I'll bet you $5 they think Mozy security is comparable to yours.

There's a reason you designed tarsnap the way you did. It's not a little bit different from Mozy. It's a totally different model. Explain how in simple terms. And remember even if your beachhead market is sysadmins, most sysadmins don't code. Don't talk down to them, but don't make your value proposition be about code.