Are you talking about their B2 product or their backup SaaS? The former has "fee that scales with usage", and the latter probably has enough normal users (ie. not data hoarders backing up 50 TB on the $99/year plan that they're not losing money overall.
$99/year with no limits on data, as far as I can tell. The context here is someone talking about personal backups, not Backblaze’s broader offerings. We know the market rates for cloud storage, more or less, since they’ve converged somewhat, across the industry. This makes it easy to calculate what kind of usage patterns would lead someone to save money at Backblaze.
Cloud services often have a free tier or cheap tier to attract new customers. IMO, this is not it. This is a product. These people are not turning around and signing contracts with Backblaze at work. At least, not many.
So it could be that people are just using it below its limits, or it could be that it’s subsidized by other parts of the business. Overall P&L is irrelevant—you want to be able to explain this product as a profitable product, as some viable sales channel, or as marketing.
My recommendation is to buy storage products where the company is making money off you, or nearly.
The limit is as much data as you have plugged in. Backblaze only backs up your currently-available data, with a 30-day grace for external disks[1]. IMO, if you have a computer with a 1TB drive, you'll probably use <1TB at all times, accounting for you not using the entire 1TB locally and your changed data probably fitting in the excess. (e.g.: 800GB used space and you change <200GB over 365 days)
1: https://www.backblaze.com/computer-backup/docs/external-hard... . Essentially, if you unplug an external drive for >30 days, that drive's backup will be deleted.
So do the calculations? As I mentioned in another comment, their unit economics are sound, with them making more than 50% gross margin.
>So it could be that people are just using it below its limits
That's how many businesses work. Many low end gym chains operate on the assumption that most users won't use their services. There's no way that planet fitness can equip and operate a gym for $10/month per member, if everyone one of them went regularly. That doesn't mean it's a bad idea to get a planet fitness membership (assuming you'd actually go), or that they're at risk of going under.
Is this some kind of personal challenge? It’s arithmetic for chrissakes, not calculus. S3 IA $0.0125/Gb-mo, ingress basically free, $99/yr÷(12mo/yr×$0.0125/Gb-mo)=660 Gb. Reasonable to ignore egress for backups—you may want to account for it, but it’s reasonable to ignore it. Do your own calculations if you have different assumptions.
That’s not hard. The numbers don’t have to be exact.
Maybe I just think it’s easy because I’ve run numbers like these for a living. Given X different storage configurations, under which conditions is configuration 1 cheaper than configurations 2 and 3?
> That's how many businesses work. Many low end gym chains operate on the assumption that most users won't use their services. There's no way that planet fitness can equip and operate a gym for $10/month per member, if everyone one of them went regularly. That doesn't mean it's a bad idea to get a planet fitness membership (assuming you'd actually go), or that they're at risk of going under.
The gym closes I can buy a different gym membership. My cloud storage service closes, it may be difficult to move my data to a different provider, depending on how much data and what kind of rate limits. We’ve seen this before. People with data stuck in an “unlimited” storage service that’s shutting down, trying to transfer it but getting their egress throttled.
The economics of gyms are different because the cost is not only the membership, but also the time it takes you to get to the gym. Cloud services are a much more efficient market, which means the margins are much lower.
There's no way that planet fitness can equip and operate a gym for $10/month per member, if one of them simultaneously used all machines at all locations.
