Local distributed backup techniques are described, where each client device calculates a manifest of its files and sends the manifest to a central server. The server performs deduplication based on the received manifest to determine which files are missing and need to be backed up, and notifies the client of those files. At this point, instead of uploading the missing files to the central server, the files are instead uploaded to another peer client device that has sufficient disk space and resides in the network vicinity of the original client device. The upload may be done to multiple peers for redundancy. Upon backup completion, the client state may be left as-is, in which case the client periodically uploads incremental updates to keep any changes synchronized with the backup peer. Alternatively, the client can be centralized to the central server, but at a later time when more resources are available.