The Networked Data Shadowing System comprises a memory module that is connected to a plurality of monitored computer systems via an existing communication medium to store the shadowed data. The memory module includes one or more memory devices for data storage as well as software, including a control software component that is automatically installed on the monitored computer systems when the monitored computer system is first connected to the memory module, as well as associated module software for maintaining a record of the data stored on the memory devices and controlling the operation of the memory devices. The Networked Data Shadowing System operates autonomously and achieves a significant amount of data storage efficiency by implementing a “data de-duplication” process to avoid storing multiple copies of the same files.