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I don't know - the Backblaze guys did several blog posts on the economics of online file hosting/backups and it came out very expensive in terms of hardware. Plus the custom software and management. Dropbox accounts are generally small, so maybe that's making it easier. I'm not saying they aren't doing fine, just that online backups are low margin (Dropbox is special, they aren't regular 'online backup' providers, I realize; and they operate at a premium price point; but still...

The backup services are a different beast. Huge competition, AdWords cost is $5 per click minimum, frequently as high as $15-20. This translates into an insane customer acquisition cost, $50+ is not unheard of, meaning in turn they need people stay with them for 2-3 years just to turn some profit.

The online backup looks simple, and technically it is. It's the business side that is tough.

Plus, Dropbox isn't doing hardware (they use Amazon's). I'd imagine they are S3's largest customer.

They may be S3's biggest customer, but Netflix is easily AWS' biggest customer overall.

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