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What makes a company like this lose so much money? I'm paying 15$ a month for years for a tiny tiny bit of hard drive space. Where does all the money go? What's

What makes a company like this lose so much money? I'm paying 15$ a month for years for a tiny tiny bit of hard drive space. Where does all the money go? What's the big money sink with something like this? I'm not doubting it, just would like to understand.

buckle8017 1y ago
You're paying for the hard drive, the server it goes into, the rack is in, the building it's in, and ask the power and maintenance for you to be able to access the data.
- abrookewood 1y ago
  And the staff to manage it.
- c0brac0bra 1y ago
  And the salaries, benefits, office space, supplies, etc for their employees.
- motorest 1y ago
  > You're paying for the hard drive, the server it goes into, the rack is in, the building it's in, and ask the power and maintenance for you to be able to access the data. It's not even just the one drive. Data is stored across multiple drives, in multiple servers, hosted in multiple locations. People pay the likes of Backblaze for it's reliability and them fool themselves into believing it's a dude with a HD stashed in a shelf somewhere.
  - rbanffy 1y ago
    > It's not even just the one drive Your data is scattered across multiple drives, but that doesn’t make it take up much more space. A terabyte stored in a RAID-5 array is 1.2 terabytes. Maybe the fixed price for unlimited storage part was a mistake, but the footprint overhead is relatively small. Also, keeping a year of history isn’t that much either unless you change every bit of the files multiple times. Using my BtrFS snapshots and Time Machine backups as a reference, normal data changes very little.
    - motorest 1y ago
      > Your data is scattered across multiple drives, but that doesn’t make it take up much more space. That's besides the point. The point is that storing data in a service such as Backblaze requires more infrastructure than just that one HD in that one server in that one location.
      - rbanffy 1y ago
        That's true. And you are your own support person.
steveBK123 1y ago
I mean very easily. I was skeptical of the wave of "unlimited" (or very large) online backup/storage offerings that came out ~15 years ago, but I didn't expect it to take this long to unravel. Look at the offering at a glance right now they are offering $99/year unlimited, versioned backup of your home storage? That seems like peanuts compared to buying a set of drives, setting up, and managing a truly redundant & versioned backup solution takes home. I spent like $1500 on a RAID NAS a decade ago and fell behind on keeping the thing operational.
- deleted 1y ago
  [deleted]
- Loughla 1y ago
  Economy of scale maybe? You can get better prices at scale purchases? Otherwise you're correct and it doesn't make a bit of sense.
  - colechristensen 1y ago
    There really aren't economies of scale buying hard drives.
  - steveBK123 1y ago
    It’s been nearly 20 years and they are still running at a loss. Sounds like they haven’t found those economies of scale yet.
- gruez 1y ago
  >That seems like peanuts compared to buying a set of drives, setting up, and managing a truly redundant & versioned backup solution takes home. I spent like $1500 on a RAID NAS a decade ago and fell behind on keeping the thing operational. Running storage system is cheaper than you think. Look at hetzner for an upper bound on how much storage costs at scale. They offer 10 TB of storage for $31/month. It mentions having "RAID-based storage" and "backups", so this presumably includes redundancy. If you can get 4 customers paying $99/year, you're already breaking even on the server. Most people probably don't have 2.5 TB worth of stuff. Backblaze only does backups, so it isn't like dropbox where you can upload whatever you want onto it. Most people don't even have computers with 1TB storage, so you'll probably be able to fit far more than 4 customers per server. Of course, this doesn't cover salaries for your engineer or marketing people, but at least it's not like moviepass where they're selling $50 worth of movie tickets for $10. https://www.hetzner.com/storage/storage-share/ https://www.hetzner.com/storage/storage-share/
anon7000 1y ago
That’s even a lot, I’m paying like 75 cents for 135GB on b2. Extrapolating to a TB would be like $5. That’s what makes it make more sense to me.
Gigachad 1y ago
They offer unlimited storage. Probably a bunch from /r/datahoarder who have loaded up 10PB of junk.
fxd123 1y ago
The "Personal backup" pricing plan is $99 USD / year and includes "Unlimited data backup" and "one year version history" which implies they are storing much more than just your data at a given time. $99 would give you 5-6TB of data for consumer HDD costs. And then factor in that they are likely doing some type of additional backup/RAID it would be even less data per dollar. And that's not including maintenance, rent, and employees. Honestly I'm surprised they exist
- TheNewsIsHere 1y ago
  Disclosures: I’ve been a customer for almost a decade. I’m also an early (IPO) shareholder. I’ve never been employed by, or been a vendor to Backblaze. To add some context and background — Their “unlimited” plan has a few major capacity-saving caveats. For example, there are built-in exclusions you can’t modify to prevent the cruft and temporary files of supported OSs (and several common apps like Outlook) from taking up space. Backblaze Computer Backup won’t backup certain kinds of data like Time Machine backups on Macs. They also have an automatic policy of deleting backups of external drives that haven’t been connected to the backup host for 30 days. They have a long list of caveats that to their credit they do disclose, although it’s a bit hard to find and understand if you aren’t technical and aren’t looking. Their backup service is built on their object storage infrastructure to prevent duplicating their own stack, and it also compresses the amount of overhead and capacity accounting they have to worry about between their two product lines. They don’t keep backups of customer data, but they’d need to suffer multiple hard drive and host failures effecting the same file at the same time to lose any single file. Their architecture is proprietary, which I expect adds a lot of human/payroll overhead they wouldn’t have if they just deployed endless ZFS pools “off the shelf”. They build their own servers which offsets the costs of going COTS from a vendor like Dell.

buckle8017 1y ago

You're paying for the hard drive, the server it goes into, the rack is in, the building it's in, and ask the power and maintenance for you to be able to access the data.

abrookewood 1y ago
And the staff to manage it.
c0brac0bra 1y ago
And the salaries, benefits, office space, supplies, etc for their employees.
motorest 1y ago
> You're paying for the hard drive, the server it goes into, the rack is in, the building it's in, and ask the power and maintenance for you to be able to access the data. It's not even just the one drive. Data is stored across multiple drives, in multiple servers, hosted in multiple locations. People pay the likes of Backblaze for it's reliability and them fool themselves into believing it's a dude with a HD stashed in a shelf somewhere.
- rbanffy 1y ago
  > It's not even just the one drive Your data is scattered across multiple drives, but that doesn’t make it take up much more space. A terabyte stored in a RAID-5 array is 1.2 terabytes. Maybe the fixed price for unlimited storage part was a mistake, but the footprint overhead is relatively small. Also, keeping a year of history isn’t that much either unless you change every bit of the files multiple times. Using my BtrFS snapshots and Time Machine backups as a reference, normal data changes very little.
  - motorest 1y ago
    > Your data is scattered across multiple drives, but that doesn’t make it take up much more space. That's besides the point. The point is that storing data in a service such as Backblaze requires more infrastructure than just that one HD in that one server in that one location.
    - rbanffy 1y ago
      That's true. And you are your own support person.

steveBK123 1y ago

I mean very easily. I was skeptical of the wave of "unlimited" (or very large) online backup/storage offerings that came out ~15 years ago, but I didn't expect it to take this long to unravel. Look at the offering at a glance right now they are offering $99/year unlimited, versioned backup of your home storage? That seems like peanuts compared to buying a set of drives, setting up, and managing a truly redundant & versioned backup solution takes home. I spent like $1500 on a RAID NAS a decade ago and fell behind on keeping the thing operational.

deleted 1y ago
[deleted]
Loughla 1y ago
Economy of scale maybe? You can get better prices at scale purchases? Otherwise you're correct and it doesn't make a bit of sense.
- colechristensen 1y ago
  There really aren't economies of scale buying hard drives.
- steveBK123 1y ago
  It’s been nearly 20 years and they are still running at a loss. Sounds like they haven’t found those economies of scale yet.
gruez 1y ago
>That seems like peanuts compared to buying a set of drives, setting up, and managing a truly redundant & versioned backup solution takes home. I spent like $1500 on a RAID NAS a decade ago and fell behind on keeping the thing operational. Running storage system is cheaper than you think. Look at hetzner for an upper bound on how much storage costs at scale. They offer 10 TB of storage for $31/month. It mentions having "RAID-based storage" and "backups", so this presumably includes redundancy. If you can get 4 customers paying $99/year, you're already breaking even on the server. Most people probably don't have 2.5 TB worth of stuff. Backblaze only does backups, so it isn't like dropbox where you can upload whatever you want onto it. Most people don't even have computers with 1TB storage, so you'll probably be able to fit far more than 4 customers per server. Of course, this doesn't cover salaries for your engineer or marketing people, but at least it's not like moviepass where they're selling $50 worth of movie tickets for $10. https://www.hetzner.com/storage/storage-share/ https://www.hetzner.com/storage/storage-share/

anon7000 1y ago

That’s even a lot, I’m paying like 75 cents for 135GB on b2. Extrapolating to a TB would be like $5. That’s what makes it make more sense to me.

Gigachad 1y ago

They offer unlimited storage. Probably a bunch from /r/datahoarder who have loaded up 10PB of junk.

fxd123 1y ago

The "Personal backup" pricing plan is $99 USD / year and includes "Unlimited data backup" and "one year version history" which implies they are storing much more than just your data at a given time. $99 would give you 5-6TB of data for consumer HDD costs. And then factor in that they are likely doing some type of additional backup/RAID it would be even less data per dollar. And that's not including maintenance, rent, and employees. Honestly I'm surprised they exist

TheNewsIsHere 1y ago
Disclosures: I’ve been a customer for almost a decade. I’m also an early (IPO) shareholder. I’ve never been employed by, or been a vendor to Backblaze. To add some context and background — Their “unlimited” plan has a few major capacity-saving caveats. For example, there are built-in exclusions you can’t modify to prevent the cruft and temporary files of supported OSs (and several common apps like Outlook) from taking up space. Backblaze Computer Backup won’t backup certain kinds of data like Time Machine backups on Macs. They also have an automatic policy of deleting backups of external drives that haven’t been connected to the backup host for 30 days. They have a long list of caveats that to their credit they do disclose, although it’s a bit hard to find and understand if you aren’t technical and aren’t looking. Their backup service is built on their object storage infrastructure to prevent duplicating their own stack, and it also compresses the amount of overhead and capacity accounting they have to worry about between their two product lines. They don’t keep backups of customer data, but they’d need to suffer multiple hard drive and host failures effecting the same file at the same time to lose any single file. Their architecture is proprietary, which I expect adds a lot of human/payroll overhead they wouldn’t have if they just deployed endless ZFS pools “off the shelf”. They build their own servers which offsets the costs of going COTS from a vendor like Dell.