4 ms·

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

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 2y ago
[deleted]
Loughla 2y 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 2y ago
  There really aren't economies of scale buying hard drives.
- steveBK123 2y 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 2y 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/
- fxd123 2y ago
  > Most people probably don't have 2.5 TB worth of stuff. But Backblaze is marketing itself towards people who do. The average person is not a backblaze customer
  - camtarn 2y ago
    Actually, kind of the opposite. A few years ago Backblaze posted that the economics of their solution relied on the average customer having less than 1.2TB of data. They explicitly do not support Linux users because they tend to average a larger amount of data and are thus not economical to support, even ignoring the extra costs to maintain a separate Linux client.
- steveBK123 2y ago
  If it’s so cheap to operate why have they continually lost money, possibly even committing accounting shenanigans to minimize the loss to a smaller number?
  - gruez 2y ago
    See: https://news.ycombinator.com/item?id=43804258 https://news.ycombinator.com/item?id=43804258 tl;dr R&D, marketing, and overhead.
Spooky23 2y ago
Capacity is cheap especially if you dedupe. IO is expensive. Most people don’t have that much data, and capacity grows over time with new drives. But… you need to be really disciplined to make money in a low margin business. I remember running the numbers on replicating something like backblaze in-house. It was just barely achievable, although I wasn’t crazy enough to shuck disks or build arrays.
stubish 2y ago
Your $1500 includes all the overheads that a storage provider amortizes over their entire customer base. At scale, the cost comes down to the cost of the hard drives, plugging them in, keeping them on, and bandwidth. The margins are really thin, so you need to reduce costs further by doing things like powering down drives that are not in use, or leaving failed drives in racks until they can be replaced in bulk. And importantly, if you offer something unlimited, make sure that it is actually limited. In Backblaze's case, the only 'unlimited' offering is only for their custom backup software that only backs up a single PC, and more recently allows limited backup of external drives. You can only keep multiple TB in it if you have multiple TB powered up in your PC and keep your external drives attached enough so their backups don't get wiped. It is impractical for archiving and abuse. And if it was a problem, they just need to tweak the terms of service to disallow abuse as is traditional.
- steveBK123 2y ago
  If their price isn’t too cheap then why aren’t they making money?
  - stubish 2y ago
    Their price may well be too cheap. Maybe they make a loss due to unexpected costs (thin margins == risk). Or maybe they are priced too cheap, because they know increasing prices will lose even more money by losing more profitable business than unprofitable.
dylan604 2y ago
I bought a Drobo with the same intent of it being my online redundant array type storage while the original copies were on external HDDs that were placed back in their original retail packaging. The Drobo itself was only connected to computer when necessary but left plugged in to mains when one day it was needed and multiple drives failed to mount--more than could be recovered. I used to really be into all of the hardware stuff like that building 64 disk arrays and maintaining multiples for edit bays. Now, I'm so sick of it. I just want a plug-n-pray system that works out of the box and does not need maintaining. But of course I know that's not how gear works. So make it someone else's problem and throw money at that problem. $99/year sounds like an excellent bargain. apparently, too excellent
- steveBK123 2y ago
  Put another way - if you are a Silicon Valley SWE, spending more than 15-60 minutes per year of your own time is more “expensive” than just giving backblaze $99/yr.

deleted 2y ago

[deleted]

Loughla 2y 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 2y ago
There really aren't economies of scale buying hard drives.
steveBK123 2y 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 2y 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/

fxd123 2y ago
> Most people probably don't have 2.5 TB worth of stuff. But Backblaze is marketing itself towards people who do. The average person is not a backblaze customer
- camtarn 2y ago
  Actually, kind of the opposite. A few years ago Backblaze posted that the economics of their solution relied on the average customer having less than 1.2TB of data. They explicitly do not support Linux users because they tend to average a larger amount of data and are thus not economical to support, even ignoring the extra costs to maintain a separate Linux client.
steveBK123 2y ago
If it’s so cheap to operate why have they continually lost money, possibly even committing accounting shenanigans to minimize the loss to a smaller number?
- gruez 2y ago
  See: https://news.ycombinator.com/item?id=43804258 https://news.ycombinator.com/item?id=43804258 tl;dr R&D, marketing, and overhead.

Spooky23 2y ago

Capacity is cheap especially if you dedupe. IO is expensive. Most people don’t have that much data, and capacity grows over time with new drives. But… you need to be really disciplined to make money in a low margin business. I remember running the numbers on replicating something like backblaze in-house. It was just barely achievable, although I wasn’t crazy enough to shuck disks or build arrays.

stubish 2y ago

Your $1500 includes all the overheads that a storage provider amortizes over their entire customer base. At scale, the cost comes down to the cost of the hard drives, plugging them in, keeping them on, and bandwidth. The margins are really thin, so you need to reduce costs further by doing things like powering down drives that are not in use, or leaving failed drives in racks until they can be replaced in bulk. And importantly, if you offer something unlimited, make sure that it is actually limited. In Backblaze's case, the only 'unlimited' offering is only for their custom backup software that only backs up a single PC, and more recently allows limited backup of external drives. You can only keep multiple TB in it if you have multiple TB powered up in your PC and keep your external drives attached enough so their backups don't get wiped. It is impractical for archiving and abuse. And if it was a problem, they just need to tweak the terms of service to disallow abuse as is traditional.

steveBK123 2y ago
If their price isn’t too cheap then why aren’t they making money?
- stubish 2y ago
  Their price may well be too cheap. Maybe they make a loss due to unexpected costs (thin margins == risk). Or maybe they are priced too cheap, because they know increasing prices will lose even more money by losing more profitable business than unprofitable.

dylan604 2y ago

I bought a Drobo with the same intent of it being my online redundant array type storage while the original copies were on external HDDs that were placed back in their original retail packaging. The Drobo itself was only connected to computer when necessary but left plugged in to mains when one day it was needed and multiple drives failed to mount--more than could be recovered. I used to really be into all of the hardware stuff like that building 64 disk arrays and maintaining multiples for edit bays. Now, I'm so sick of it. I just want a plug-n-pray system that works out of the box and does not need maintaining. But of course I know that's not how gear works. So make it someone else's problem and throw money at that problem. $99/year sounds like an excellent bargain. apparently, too excellent

steveBK123 2y ago
Put another way - if you are a Silicon Valley SWE, spending more than 15-60 minutes per year of your own time is more “expensive” than just giving backblaze $99/yr.