

Mozy - increased prices and no more unlimited plan - Yrlec
http://news.techworld.com/storage/3258988/mozy-increasing-prices-cutting-cloud-storage-options/?olo=rss

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driverdan
I've long believed these unlimited backup services rely on a Ponzi-like scheme
to make money. Home internet connection uplinks are often the bottleneck
preventing users from using excessive storage. As time goes on and bandwidth
increases the profit margins on existing users goes down unless hardware costs
decrease in equal or greater proportion. In order for the companies to remain
profitable their growth has to keep up with the pace of storage use by
existing users or hardware costs have to decrease in equal proportion. It was
only a matter of time before some of these companies got bit by this model.

That said, the new pricing has huge margins built in. In researching the
storage business for some ideas I had I found that the costs are significantly
lower than most consumers realize. With 2TB drives under $100 now it would
take months of a user maxing a 1MBit uplink to kill profits.

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Yrlec
Interesting analysis! I've never considered that the inflow of customers could
be what kept costs/customer down. I just thought their budget was depending on
slow uplinks in the US and that they started getting too many non-US customers
with faster uplinks.

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Yrlec
It will be interesting to see if other backup services will follow.

I've always wondered how they managed to keep prices so low. Considering the
price of S3 (asuming their costs are similar to Amazon's) then only the
storage costs of 100Gb is $14/month (excluding bandwidth). Even if they store
it very efficiently (erasure coding, compression, de-duplication etc) it would
be very hard to reach break even at $5/month.

