WHAAAAT? Unlimited storage for $4.99 a month not a viable business model?

https://spideroak.com/blog/20110202135038-whaaaat-unlimited-storage-for-499-a-month-not-a-viable-business-model

by DanLar75 • 15 years ago

52 45 15 years ago

latch2• 15 years ago

The argument seems to be that average online storage needs are simply growing beyond what can be provided by a flat-fee unlimited plan.

I don't know if that's true, but there's something important the post doesn't address: the potential declining costs of providing online storage. Might the two not balance each other out for the foreseeable future?

I refer to this most excellent post by BackBlaze, which outlines how they do storage: http://blog.backblaze.com/2009/09/01/petabytes-on-a-budget-h...

While we might not see many additional leaps of over 90% reduction in cloud storage costs, I (a) wonder how much headroom such innovation bought Backblaze, and (b) whether their main costs, hard drive, will keep pace with user demands.

wickedchicken3• 15 years ago

I think there is a difference between 'unlimited' and 'absurdly high.' Many hosting providers offer 'unlimited' storage but limit how fast you can upload -- this effectively caps their storage but makes it high enough for most users to never care. Instead of dubious 'unlimited' marketing I would prefer up-front pricing. GMail tells you exactly how much storage it offers for free with the idea that this is much too high for a normal user to touch. Much easier to deal with than an 'unlimited' service that breaks down under load.

ssmoot• 15 years ago

I've backed up a few hundred GB with Backblaze. I think the implication being made here is unfair. I'm much more likely to believe any issues with my upload were caused by shady AT&T QoS.

You know the kind. Goto any speedtest site and somehow you're getting exactly 12MB down, 3MB up, but it never really seems to add up that way anywhere else. Even to my own office, which I know has an extra 100MB to burst, yet somehow my downloads from the data-center across town are more likely to end up in the 3MB range 99% of the time.

barrkel2• 15 years ago

Explicit pricing is better for moderate users and worse for heavy users. "Unlimited" effectively subsidizes heavy users by overcharging moderate users. As a heavy user, I'm a fan of "unlimited".

DanLar752• 15 years ago

Costs of storage are of course declining rapidly, however so far the massive increase in available bandwidth and storage needs for customers is simply growing MUCH faster.

Part of the catch-22 here is also that with decreased storage costs for online storage providers (that increasingly are building their clusters with consumer component hard drives) keeps an even pace with decrease in cost for home-storage and the amount of data users are wanting to upload.

pangram• 15 years ago

This is why I'm really liking Crashplan as a storage service; they offer the ability to use their software to backup to your friends' drives (and vice versa). It perhaps doesn't work out well for everyone, but I have enough friends that keep up with the latest hardware that I am assured of finding someone with which I can trade backup storage. (My alternate plan was dropping off a disk / picking up the old disk whenever I visited my relatives every couple of weeks!)

rarrrrrr3• 15 years ago

FYI -- The backblaze storage hardware is similar (at least conceptually--specifics differ greatly) to what all the big self hosted backup companies (Mozy, Carbonite, SpiderOak, etc.) do. Custom hardware and data center storage software is the minimum price of entry for the industry these days.

The issue here I think is that "unlimited" really isn't unmetered and it never really was. The industry has often seen that marketing gimmick accompanied with abundant exclusions, fine print, and far less ethical tricks like upload rate limiters, that effectively impose limits behind the scenes.

marcusEting• 15 years ago

If you are a Dropbox Pro user I think you get the packrat addon, which allows for unlimited history / undeletes. So, while the amount of files you can keep in your DB is limited, the amount of data that DB has to keep up with for you could get very large.

I don't see that they have anything to counter this in their model, and it kind of worries me that if people abuse this then they will remove the feature for all users, and I like my unlimited revisions.

DanLar752• 15 years ago

I would say that Dropbox (being a really super company with a great product) has issues that are actually even larger than the storage cost.

Dropbox is based on Amazon S3, which means that not only do they have storage costs to a 3rd party that are so to speak 'out of their control' but they are also dealing with bandwidth and transaction costs.

I wish them all the best, however I can imagine this being quite expensive for them considering the amount of free users they have.

limmeau2• 15 years ago

As the Dropbox clients talk to Dropbox servers instead of directly to S3, Dropbox can just transparently migrate their data to a storage facility of their own when they decide that that has become cheaper than S3.

darrenkopp• 15 years ago

I had about 50GB of backed up data with mozy for that last 3 years, growing from ~20GB when i started. I've been paying $5 per month for almost 3 years now, which means I have paid ~50 a year (very rough to take out transaction fees and bandwidth fees, etc). That should buy them at least 320GB of average sata disk drives per year (assuming all money going into storage).

This means for "unlimited" they can recoup 6x the storage i was using per year through my fees. So the question becomes why it's not sustainable? Too large a company and not sustainable due to employee salaries? Not economical enough storage prices (ie using enterprise SAS disks rather than cheap SATA)? I'm guessing since they buy large quantities of disks, they could get drives for even cheaper than what you get on NewEgg.

This is why I believe that this model _is_ sustainable, assuming that it's done right. Also why I switched from Mozy to Backblaze because I felt that Mozy was gouging me by taking away their unlimited plan and replacing it with a tiered plan.

latch2• 15 years ago

Just playing devil's advocate, since I largely agree with you. I do think you are missing 3 key costs: redundancy, power (including cooling) and people.

I actually don't think bandwidth is in the same ballpark as these three items.

wvenable• 15 years ago

I'd stick with mozy, but 50GB is too small. I have about 89GB in Mozy right now and if I could get that for the $5 per month, I wouldn't go anywhere. Mozy is pretty slow, so backing up even more data isn't very practical. Also, their system doesn't handle large files very well. My 89GB is just pictures, personal movies, documents, and source code.

narad• 15 years ago

I have less pictures and data. I am using Google Storage. It costs very less ( $5 per 20GB per Year).

roel_v• 15 years ago

Have you ever tried a restore from Mozy? I backed away from them when I did. Apparently, there is no 'resume' functionality when restoring. That means putting down a laptop to restore 50 gb, have a connection failure or needing to move the computer from office to home after 30 gb, and then needing to restart from scratch. That make me go %( - and I still haven't been able to cancel my Mozy account, after 2 months, because despite what the documentation says there is no 'unsubscribe' link in your profile and the customer support seems to be an email black hole.

Just venting I guess, but beware if you are trusting your data to Mozy...

absconditus• 15 years ago

It is a good thing that hard drives connect to the Internet by themselves and do not require rack space, servers, power or bandwidth.

wickedchicken3• 15 years ago

I think this (and SpiderOak in general) is pretty instructive for a company starting out and looking to find a way to generate revenue. I plan to roll out a service (unrelated) later this year and will be looking at SpiderOak for a compelling delivery/pricing model.

SageRaven• 15 years ago

Pardon the somewhat OT question, but do any of these services offer standard protocol support so that any OS can store data? I know DropBox supports Linux, and some services support OS X, but I haven't seen anything generic enough for my FreeBSD workstation, though the concept of cloud storage sounds great.

Give me NFS or SMB access if you must, but I'd love to get in on this cheap consumer cloud storage thing without resorting to lame hacks like using VMs or emulation due to lack of native access for my platform.

mauiuku2• 15 years ago

spideroak has a cli linux client.

limmeau2• 15 years ago

Strato claims to offer WebDAV and CIFS support on HiDrive:

http://www.strato-hosting.co.uk/online-storage-hidrive/index...

(not a Strato customer myself)

mml• 15 years ago

Crash plan runs anywhere there's a java vm. Even headless.

razzmataz• 15 years ago

rsync.net might still be around...

rarrrrrr3• 15 years ago

FYI, the reason the big backup providers don't do "standard protocol access" is because it's actually far more expensive to provide.

Take for example, the case of backing up a folder full of files using rsync over ssh, vs. using the SpiderOak client.

Every time you run a backup job, rsync must examine the local folder _and_ ask the server to examine the remote folder, so it can make conclusions about what needs to be transferred. In short, to do a new backup (a write operations) many reads are also required. Furthermore, those reads tend to be non-sequential (seeking to a bunch of different inodes to stat files, etc.)

If you compare that to the SpiderOak client, it already has a near real-time accurate database of exactly what exists on the server. There's no need to burden the server with a bunch of disk seeks (or any actually) to assess what needs to be done. In short, the backup operation can be accomplished by the server using mostly sequential IO, writing only, because of this added intelligence in the client.

Aggregated across a large population of users, this difference in usage patterns greatly influences the hardware requirements and therefore the cost per GB.

...and by the way SpiderOak will run on just about any platform that Python will, with or without a GUI.

mauiuku2• 15 years ago

I didn't read the article but wanted to comment on spideroak:

Really love their "realistic" pricing model, even cheaper with a .edu email address.

Had a lot of problems with CPU usage, may have been the thousands of files in my .git directories...

This leads me to support, they have been overwhelmed and it has been difficult getting then to review my logs. they gave me multiple months free due to my non usage but I decided to cancel when I found arq for mac.

I asked then to cancel my account and give me a years credit so I can give it a try in the future and they credited my account for a year... pretty cool.

Wish them the best of luck!

Written from my mobi...

StavrosK3• 15 years ago

I get horrible CPU usage as well. It's to be expected, I guess, since they have to encrypt data, but what is the encryption code written in, Python?

Also, it's slow to update things. You wouldn't expect this, given that Linux has inotify, but it is.

Their support is rather bad, I've emailed them about legitimate bugs and high CPU usage and SpiderOak not syncing and a whole lot of things, but they never credited me anything. I decided to buy it for a year to back my photos up because my disk is making weird noises and it took them three days to reply to my "PayPal won't let me pay from my balance and I don't want to add a credit card" email, to tell me to add a credit card.

I replied "yes, I don't want to add a credit card", and they haven't replied since I sent it three days ago. With that sales support, I wonder how they sell any copies.

rarrrrrr3• 15 years ago

Apologies for the support delay. As mentioned above, we have seen overwhelming growth lately and are training support staff to scale up right now. Feel free to mail me directly if I can help.

For inotify, the biggest limitation we run into on Linux is that the default system configuration limits a user to watching a relatively small number of folders (6,000 I think, and that includes all subfolders recursively.) You can change this in sysctl if you like, and we may add this change to future packages. In case your curious, the SpiderOak directory watchers are tiny C programs for each platform, and are open source.

FYI -- We've definitely seen high CPU use when syncing hundreds of thousands of small files (source code etc), but this has been greatly improved in the latest beta, which just went out yesterday.

Thanks very much for the feedback.

SoftwareMaven• 15 years ago

Given the change Mozy just instituted, my backup costs are going to go from $4.99/month to $23.99/month. This is an intolerable jump, regardless of the reasons they have for it. I don't expect something for nothing, but bait-and-switch is BS.

Looks like I'm in the market for a new backup solution.

dexen• 15 years ago

This left me wondering; wouldn't use of deduplication storage backend (like http://en.wikipedia.org/wiki/Venti) lessen the incremental cost of servicing each new customer?

Couldn't it be well expected that, encrypted data aside, files with same content are often used by more than one persona?

ovi256• 15 years ago

I'd expect most people use these services for backups of business documents, which are almost guaranteed to be unique.

I seem to recall that Dropbox (or another well known online storage startup) implements this strategy. Maybe it works.

andybak• 15 years ago

Which will be tiny.

Videos, audio and photos and game media will take the bulk of the space. Of those - only photos and a proportion of the videos are likely to be totally unique to a user.

ot• 15 years ago

They are already doing some deduplication. From https://spideroak.com/whyspideroak :

> Greatly reduce backup & sync time through comprehensive compression and advanced de-duplication (saving you time)

> You are only charged for the compressed de-duplicated data amount (saving you money)

Still it is not clear if they do cross-user deduplication, but I think it is very unlikely because all the content is encrypted with an user-specific key, which I think they don't have access to.

StavrosK3• 15 years ago

They don't do cross-user deduplication, yes. They only deduplicate data that belongs to you.

by• 15 years ago

Please don't shout in uppercase in the titles. The guidelines are here:

http://ycombinator.com/newsguidelines.html

I realise the original article uses this title, but a little more peaceful when posted to HN would be nice.

greyman• 15 years ago

What is your experience with online backup solutions in general?

I tried mozy and a few others, but I always struggled with rather slow upload speed, and ultimately found the much easier way is to buy USB harddisk, which I hide in my workplace and just bring it home once per month to make backups. (I store online only a few files I am actually working on, using Dropbox).

WHAAAAT? Unlimited storage for $4.99 a month not a viable business model?

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