Thoughts on the price of cloud storage services…

People often wonder about the pricing for cloud storage service because of the low (and falling) prices for external hard drives. You can get an awful lot of disk for a very reasonable price these days, but that’s all you get – a disk. But disks fail all the time. More than their makers say.

From the team at ElephantDrive:

Disks are cheap. Highly redundant storage that is kept in secured and environmentally controlled facilities, made available in real-time by constant power and bandwidth, and maintained by highly trained professionals is a bit more expensive.

If all you want is a disk, then it is probably not economical for you to seek online backup, storage, and access. But, if you want highly reliable, always available, professionally managed cloud storage with a robust feature set that is constantly improving, then we highly recommend you consider cloud storage. Even though the pricing may seem high compared to buying a simple external drive or raw disk, our subscription plans remain very affordable and provide more than enough storage for nearly all of our end users.

ElephantDrive used to offer some unlimited storage plans (now discontinued, referred to as “Legacy plans.” There were other limitations (like bandwidth per month or number of devices you could run automated backup on), but the storage itself was unconstrained as long as users worked within these parameters. The plans were stopped for a variety of reasons, but the three most important were 1) a small set of users with very large storage requirements made it not economical to offer the plans, 2) a small set of users were circumventing the the other restrictions, and 3) the other restrictions were confusing to some users. In the end, it was an easy decision. Even though ElephantDrive realized it would inconvenience some users to have to change plans or find alternatives, it would ultimately lead to improved and lasting service for the vast majority of customers.

Edrive is not the only firm to have come to this conclusion…

Mozy (owned by storage giant EMC) also learned the same lessons – they ended their unlimited plans and offered the following…

Mozy:

We’ve noticed a growing shift in people’s storage behavior. Photo storage demand has steadily risen as higher and higher megapixel cameras became cheaper and cheaper. With the advent of inexpensive video capture devices, including the first video-capable iPhone (and subsequent Android devices), the trend in demand for video file storage began to increase rapidly. From Mozy’s unique perspective, we can see that as people become accustomed to having a video device on hand at all times, they get into the habit of capturing memorable life-moments as video. Couple this behavioral shift with ever-higher media quality (just look at the increase in average file sizes of smartphone media in the table below) and you can see how demand for raw storage increases geometrically.

More Mozy:

We’ve seen other backup service providers respond to this industry storage trend in different ways. Some, like AOL’s Xdrive, HP Upline, and Mediamax, closed down their service. Others continue to offer “unlimited” backup, but restrict bandwidth as a customer’s data grows, effectively choking them off. Others exclude files over a certain size or exclude certain file types.

Rather than claim to offer an “unlimited” backup while imposing bandwidth or file limitations behind the scenes, we want you, our users, to decide what you want backed up and in return Mozy will provide you the best possible service level, regardless of file types or size. We call that “No Fine Print Backup”.

CNET covered this decision quite well, noting that the costs of storage are quite substantial:

And Mozy isn’t alone. Google Docs costs $1,400 a year for 400GB, for example, and Google’s Picasa Web Albums costs $100 per year for 400GB. Jungle Disk, which provides a front end to storage using Amazon’s S3 service, charges a flat rate of $3 per month plus 15 cents per gigabyte per month. Carbonite, perhaps Mozy’s best-known competitor, throttles down bandwidth for big-data users. And up-and-comer Dropbox charges $20 per month for 100GB.

The note about Carbonite is significant. They market “unlimited” online backup, but they enforce rather strict limitations. The below is from their own site:

Our bandwidth policy is allocated into three tiers as shown below. This allows us to ensure that all users are able to backup their most important data as quickly as possible. Actual speeds may vary depending on your Internet connection, your computer’s configuration, other Internet-enabled software you may be running, and how often you use your computer. The current maximum upload speeds are as follows:

  • The first 35GB of data can achieve upload speeds of up to 2 mbps (megabits per second).
  • Between 35GB – 200GB of data can have the upload speeds reach up to 512 kbps (kilobits per second).
  • 200GB or more of data can be uploaded at up to 100 kbps (kilobits per second).

Ultimately, it seems that cloud storage companies are converging are sustainable price points and competing on the ability to deliver a great service with features users want and the ability to effectively market their respective solutions. ElephantDrive is excited to engage in that contest.

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