[klodolph]

I recommend worrying about any service where you don’t pay a fee that scales with usage. This includes Backblaze. Yes, I recommend worrying about Backblaze and I’ve recommended worrying about it for a while.

Storage costs money. People love to dream up creative business models where your personal storage is subsidized by some other part of the business, but I think it’s just a matter of time before the business model changes. At the end of the day, there’s a massive gravitational pull that brings everything in line with market rates. These days, I think we have a pretty good idea of what market rates are for cloud storage. Anything less than market rates should be viewed with suspicion.

From another angle, in any long-term relationship with a vendor, you want the vendor to make money. We know that major cloud vendors do, or at least close enough, because they charge the same for small customers and big ones (or close enough). None of them offer unlimited data… or at least, not any more (most of them used to, but those parts of the business always get shut down).

[rsync]

"I recommend worrying about any service where you don’t pay a fee that scales with usage."

This is the issue and it is a heuristic that people need to develop.

Your provider especially your backups provider needs to have interests that are aligned with your interests.

The non-B2 portion of Backblaze has a financial incentive to keep you from using their product and to use as little of their space as possible. This is a bad, misaligned set of incentives.

On the B2 side, all of our suspicions about the (well timed) "me too" IPO have been confirmed with each and every quarterly report showing increased debt load and the classic "losing money but making up for it on volume".

Now that money isn't free anymore it's just a matter of time.

The sad part is they don't use standard, commodity JBOD enclosures so there won't even be anything useful in the fire sale :(

[mindslight]

> The sad part is they don't use standard, commodity JBOD enclosures so there won't even be anything useful in the fire sale :(

Can you elaborate on this? They mount in a standard rack and it looks like they have a backplane connected to a commodity motherboard. I'd think if you wanted it to be a JBOD you could replace the motherboard with an external SAS connector. Based on your nick I'm sure you've thought this through so I'm curious.

The only thing I see is that it looks like you have to slide the whole unit out to swap a drive, but that seems like an inconvenience rather than a show stopper.

[klodolph]

> Your provider especially your backups provider needs to have interests that are aligned with your interests.

I also think about all those cafés with free WiFi, where you buy a single coffee and take up a table for six hours while you browse Facebook and have your screenplay open in the background. I benefit, but the café doesn’t.

[justinclift]

Don't cafe's tell people to move on if they up space for large amounts of time when the place is busy?

[gruez]

>These days, I think we have a pretty good idea of what market rates are for cloud storage. Anything less than market rates should be viewed with suspicion.

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.

[klodolph]

https://www.backblaze.com/cloud-backup/pricing

$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.

[ricardobeat]

The backup plan has no API access (you need to use B2 which is usage-billed), it’s for a single machine, and external drive data is lost after 30 days from last scan which makes it very inconvenient for anything other than.. backing up a computer’s hard drive. Nothing indicates misuse of this plan is causing elevated operating costs for them.

[immibis]

I believe they're public about the fact they have some users who back up hundreds of TBs and they're still willing to just deal with it to keep the flat price structure.

[klodolph]

I’m aware. That isn’t relevant to my analysis.

[smileybarry]

> $99/year with no limits on data, as far as I can tell.

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.

[gruez]

>$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.

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.

[klodolph]

> So do the calculations?

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.

[gruez]

>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.

This includes AWS's margin, which could be quite handsome. Bandwidth costs for the top 3 hyperscalers have converged to around 9 cents per GB, but nobody seriously thinks that's anywhere close to to the actual cost of bandwidth, or that hetzner/ovh is going to go under because they're offering 1TB ($90) of bandwdith for their $5/month VPS.

Even taking the 660GB figure at face value, that's plausibly within the range of what I'd expect the average person to have backed up, especially when you consider that the pricing is per machine, and the standard desktop/laptop comes with around 500 GB of storage.

You've also failed to address my point about their gross margins. The reliability of their books have been questioned, but even the short report didn't accuse them of cooking that metric.

>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.

It's a backup service. It's not even trying to compare itself with the likes of dropbox or onedrive. You should have at the very least a second copy locally.

[klodolph]

> This includes AWS's margin, which could be quite handsome.

It could not be.

Storage costs are more or less race to the bottom. Storage business model is that it’s cheap and commodified, but sticky. Your data is stuck in S3 because it’s a pain in the ass to migrate. The margins come from non-commodified parts of the cloud (higher-level SaaS products) and I suspect egress costs (I don’t have the details).

There’s three parts to my understanding here. One part is my understanding of the business model, which explains why storage is a race to the bottom, why it’s not subsidized (or not subsidized much), why from a strategic perspective, the margins are getting eliminated. The second part to my understanding is the technical aspect—the calculations for how much it costs to stick hard drives in a data center and run storage systems on top with the desired accessibility and reliability, and I have some fairly deep expertise in parts of this. The last part is my personal experience working for cloud providers.

I can elaborate on the first two parts but for obvious reasons some of my knowledge is proprietary and I can’t share it.

> Bandwidth costs for the top 3 hyperscalers have converged to around 9 cents per GB, but nobody seriously thinks that's anywhere close to to the actual cost of bandwidth, or that hetzner/ovh is going to go under because they're offering 1TB ($90) of bandwdith for their $5/month VPS.

Bandwidth is not commodified like storage. I know that storage cost is close to operational cost because I’ve done extensive calculations and comparisons—and some projects are cheap enough that you have to revisit your theories about how they work on a technical level.

I don’t know why bandwidth is expensive. I’m not an expert on bandwidth or CPU or 90% of the other stuff. I only happen to have expertise on storage.

There are services you can buy where egress is the major cost and egress is significantly cheaper than egress from AWS, GCP, or Azure. Either egress is a complicated product or the margins are high. Probably some combination. Storage is less complicated and the margins are lower.

> You've also failed to address my point about their gross margins. The reliability of their books have been questioned, but even the short report didn't accuse them of cooking that metric.

I guess I don’t understand what point you’re making, or how that point about gross margins makes sense. It doesn’t make sense to me so I’m not sure what I’m supposed to respond to.

[bobmcnamara]

> 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.

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.

[mingus88]

According to the article they _are_ losing money overall, every quarter since the IPo

[gruez]

I meant the unit economics of their backup product, not the company as a whole. They made $69M in gross profit in 2024, with a gross margin of 55%. That turns into a lost only after subtracting R&D ($42M), sales and marketing ($44M), and G&A ($29M). Of course, those expenses can't be ignored in the context of a company that's set out to make money, but at least they're not selling $10 worth of storage for $5, like the OP implied.

[Spooky23]

I’d make the exception for Google Drive, OneDrive and whatever the AWS one is. The hyperscalers are able to get prices way cheaper with economies of scale and price models in a sustainable way.

When O365 launched, they were using spinning disk for exchange. The issue was that they stranded capacity because of the IOPS needs of exchange. So “free”, (low iops) SharePoint and OneDrive for business data utilized that “free” capacity.

[rsync]

"I’d make the exception for Google Drive, OneDrive and whatever the AWS one is."

No - no exceptions.

We must, as sophisticated 21st century actors, insist that providers (especially providers of critical services) have financial interests that align with our own interests.

I don't care how big the parent is or how much money they have to burn - if it makes financial sense to keep you from storing your backups you need to go elsewhere.

[Spooky23]

You’re missing the point. Those companies are providing extremely profitable services, of which data storage is a part. Office and Workspace are lines of business with 50-60% margins.

Non-nerds are going to screw up backups without good UI. If you want to pay by the drink, like I said, use the hyperscalers.

[immibis]

On the other hand why should you not extract value from someone who is giving you free value?

[Spooky23]

Unless you uuencode your photos and chisel them into stone tablets, stored in your personal salt mine, you’re not serious about backups.

[j45]

The economies of scale go into profit for them while still incrementally increasing costs for clients.

If it was aligned with economies of scale, customers would get more storage for the same price every year.

We don't hear about cloud prices coming down that often.

[j45]

Storage is a fixed fee (space on a hard drive). It make money every month when it sits there and is used.

Bandwidth costs can seem like a lot more, but when you purchase a 10 gig fibre, you have unlimited data, up until the full speed of the 10 gig fibre, 24/7. That number in TB can be calculated.

Clouds massively mark up services. Ones that underprice can have the opposite problem.

I have heard good things about the Backblaze service itself, and appreciate the hard drive reviews they put out.

[lud_lite]

Thanks! I suspect that for my use case (actual backup no meed for cloud access) s3 glacier is statistically cheaper.

[gruez]

>actual backup no meed for cloud access

How do you test your backups? You do test your backups, right? Your other comment mentions using dropbox, but that's hardly a real backup solution, and you could easily run into a situation where you need to retrieve files beyond the 30 day window.

[mingus88]

If you regularly test your backups, glacier gets a lot more expensive due to egress fees

And it’s such a good thing to remind people of. You don’t manage a backup service. Nobody cares about backups.

People care about restores.

[klodolph]

Glacier egress is less than it used to be, and you can use a combination of glacier + other storage classes using lifecycle rules.

I would personally be fine running tests on data that is recently backed up and only testing the data in glacier once or twice. Think about why you test backups in the first place—the main errors you’re trying to catch are problems like misconfiguration, backups not getting scheduled or not running, or not having access to your encryption keys. You can put your most recent backup in “infrequent access” and let older objects age out to glacier with lifecycle rules.

Glacier used to have really expensive retrieval costs. That’s now called “glacier deep archive” and as far as I know, major use cases are things like corporate recordkeeping / compliance (e.g. Sarbanes-Oxley). The costumers for deep archive should be sophisticated customers.

[leidenfrost]

What do you recommend as an alternative? I use it as a cheaper replacement to S3

[geerlingguy]

I backup to Amazon Glacier S3 Deep Archive backed buckets. The price is only a little higher for a few TB than other providers, though egress fees in case of restore are a lot higher. That's a tradeoff I'm willing to make as I'd have two have two separate local NAS replicas corrupt or die before I need to rely on the Deep Archive.

[Spooky23]

For raw backup, I use GCP. Pricing is similar to AWS and the deep storage is easier to use.

For most regular people, I suggest Google Drive or OneDrive because you get the value add of the their ecosystem. With Google, Photos are good. With Microsoft, the Office+OneDrive subscription is a great value.

[billfor]

IDrive.

[immibis]

You should worry they'll increase the price and worry they'll delete your data if you don't pay the higher price. It's not necessary to worry they'll go out of business just because they are charging a fixed price. They'll raise the price long before going out of business.

[j45]

Having your own NAS in the mix more and more is unavoidable.

On one side, the cloud is someone else's computer they will always charge more an more for it because customers have not learned the economics of cloud hosting and how profitable it is on the other end.

On the other side, a NAS is your storage computer, in a simplified home appliance form. Connect it to back up to any cloud you wish.

[jillyboel]

Huh? b2 absolutely scales with usage. Here is their pricing page: https://www.backblaze.com/cloud-storage