It takes the form of a red, six-foot-high floppy disc-like device. If Holly is erased from the databanks, or his program becomes corrupted, then Holly can be reinstalled from the backup disc.
Holly had been offline and the ship had been without a computer for decades, with Holly having suffered water damage to his databanks. However, after hoarding salvage from Cargo Bay 15, Dave Lister found the backup disc. The boys from the Dwarf plugged the disc into a large computer slot in the science room and Holly was reinstalled. During the reinstalling process, the terminals in the science room sounded like an old internet dial-up modem from the 1990s.
However, Holly was reset to factory settings, losing his memories and the unique personality he had developed. Classing Red Dwarf as a redundant ship as per Space Corps Directives, Holly forced the Dwarfers off Red Dwarf in a Starbug when he overheard them plotting to erase him.
Months later, when the Dwarfers were in a life-or-death situation, they were able to contact Holly by radio, who fortunately had not yet destroyed Red Dwarf. Rimmer convinced Holly to load up his last saved memories from before the original Holly was erased. Holly regains three million years worth of memories, and once again becomes computer senile. However there is enough of the old Holly in there for him to remember his crewmates and come to their aid. (The Promised Land)