Backblaze responds to claims of "sham accounting", "customer backups at risk"

Yeah, the extra quotes do help

And the staff to manage it.

And the salaries, benefits, office space, supplies, etc for their employees.

> You're paying for the hard drive, the server it goes into, the rack is in, the building it's in, and ask the power and maintenance for you to be able to access the data.

It's not even just the one drive. Data is stored across multiple drives, in multiple servers, hosted in multiple locations.

People pay the likes of Backblaze for it's reliability and them fool themselves into believing it's a dude with a HD stashed in a shelf somewhere.

Economy of scale maybe? You can get better prices at scale purchases?

Otherwise you're correct and it doesn't make a bit of sense.

>That seems like peanuts compared to buying a set of drives, setting up, and managing a truly redundant & versioned backup solution takes home. I spent like $1500 on a RAID NAS a decade ago and fell behind on keeping the thing operational.

Running storage system is cheaper than you think. Look at hetzner for an upper bound on how much storage costs at scale. They offer 10 TB of storage for $31/month. It mentions having "RAID-based storage" and "backups", so this presumably includes redundancy. If you can get 4 customers paying $99/year, you're already breaking even on the server. Most people probably don't have 2.5 TB worth of stuff. Backblaze only does backups, so it isn't like dropbox where you can upload whatever you want onto it. Most people don't even have computers with 1TB storage, so you'll probably be able to fit far more than 4 customers per server. Of course, this doesn't cover salaries for your engineer or marketing people, but at least it's not like moviepass where they're selling $50 worth of movie tickets for $10.

https://www.hetzner.com/storage/storage-share/

Capacity is cheap especially if you dedupe. IO is expensive.

Most people don’t have that much data, and capacity grows over time with new drives.

But… you need to be really disciplined to make money in a low margin business. I remember running the numbers on replicating something like backblaze in-house. It was just barely achievable, although I wasn’t crazy enough to shuck disks or build arrays.

Your $1500 includes all the overheads that a storage provider amortizes over their entire customer base. At scale, the cost comes down to the cost of the hard drives, plugging them in, keeping them on, and bandwidth. The margins are really thin, so you need to reduce costs further by doing things like powering down drives that are not in use, or leaving failed drives in racks until they can be replaced in bulk. And importantly, if you offer something unlimited, make sure that it is actually limited. In Backblaze's case, the only 'unlimited' offering is only for their custom backup software that only backs up a single PC, and more recently allows limited backup of external drives. You can only keep multiple TB in it if you have multiple TB powered up in your PC and keep your external drives attached enough so their backups don't get wiped. It is impractical for archiving and abuse. And if it was a problem, they just need to tweak the terms of service to disallow abuse as is traditional.

I bought a Drobo with the same intent of it being my online redundant array type storage while the original copies were on external HDDs that were placed back in their original retail packaging. The Drobo itself was only connected to computer when necessary but left plugged in to mains when one day it was needed and multiple drives failed to mount--more than could be recovered.

I used to really be into all of the hardware stuff like that building 64 disk arrays and maintaining multiples for edit bays. Now, I'm so sick of it. I just want a plug-n-pray system that works out of the box and does not need maintaining. But of course I know that's not how gear works. So make it someone else's problem and throw money at that problem. $99/year sounds like an excellent bargain. apparently, too excellent

Disclosures: I’ve been a customer for almost a decade. I’m also an early (IPO) shareholder. I’ve never been employed by, or been a vendor to Backblaze.

To add some context and background —

Their “unlimited” plan has a few major capacity-saving caveats. For example, there are built-in exclusions you can’t modify to prevent the cruft and temporary files of supported OSs (and several common apps like Outlook) from taking up space. Backblaze Computer Backup won’t backup certain kinds of data like Time Machine backups on Macs. They also have an automatic policy of deleting backups of external drives that haven’t been connected to the backup host for 30 days. They have a long list of caveats that to their credit they do disclose, although it’s a bit hard to find and understand if you aren’t technical and aren’t looking.

Their backup service is built on their object storage infrastructure to prevent duplicating their own stack, and it also compresses the amount of overhead and capacity accounting they have to worry about between their two product lines. They don’t keep backups of customer data, but they’d need to suffer multiple hard drive and host failures effecting the same file at the same time to lose any single file. Their architecture is proprietary, which I expect adds a lot of human/payroll overhead they wouldn’t have if they just deployed endless ZFS pools “off the shelf”. They build their own servers which offsets the costs of going COTS from a vendor like Dell.

I don't think that question is relevant.

I see potential bias is all.

Is there a perfect source for this information? No idea.

I don't totally disagree with the idea that putting your money where your mouth is lends some degree of credibility. But when you're taking a short position on a company and then publicly sharing opinions and information that might drive down the stock price of that very same company, it's reasonable to ask if they're simply taking a financial position in a theory they believe in or trying to create a set of circumstances that benefit their financial position.

To put it another way, the incentives for an organization that benefits from a stock price going down mean you should take anything negative they say about the financial health of that stock with an enormous grain of salt. Making a bet that a stock will go down makes me think you believe the stock will go down, but only to the extent that making that bet won't actually drive the stock price down absent any other factor. A short selling firm (or people connected to a short selling firm) putting out press releases designed to drive down a particular stock price 100% don't meet that bar, unless they can demonstrate they have no financial stake in the outcome.

> if you believe your short thesis enough to put money behind it, I’m more rather than less inclined to believe that you believe

Not really. The short seller just needs enough people to believe their claims. How true or important those claims really are is only relevant to the extent it helps or hurts the narrative.

If you put money on your shirt AND make public claims that you’re right and the shares are catastrophically overvalued, those two kind of cancel out.

They might be right that Backblaze is doing shady accounting, but they also might benefit from the perception the company is doing shady accounting.

>Also, welcome to egress charges!

b2 has 3x free egress though?