I'm not doubting it, just would like to understand.
$99 would give you 5-6TB of data for consumer HDD costs. And then factor in that they are likely doing some type of additional backup/RAID it would be even less data per dollar. And that's not including maintenance, rent, and employees.
Honestly I'm surprised they exist
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.
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.
Your data is scattered across multiple drives, but that doesn’t make it take up much more space. A terabyte stored in a RAID-5 array is 1.2 terabytes. Maybe the fixed price for unlimited storage part was a mistake, but the footprint overhead is relatively small. Also, keeping a year of history isn’t that much either unless you change every bit of the files multiple times. Using my BtrFS snapshots and Time Machine backups as a reference, normal data changes very little.
That's besides the point. The point is that storing data in a service such as Backblaze requires more infrastructure than just that one HD in that one server in that one location.
That’s what makes it make more sense to me.
I was skeptical of the wave of "unlimited" (or very large) online backup/storage offerings that came out ~15 years ago, but I didn't expect it to take this long to unravel.
Look at the offering at a glance right now they are offering $99/year unlimited, versioned backup of your home storage?
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.
Otherwise you're correct and it doesn't make a bit of sense.
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.
tl;dr R&D, marketing, and overhead.
But Backblaze is marketing itself towards people who do. The average person is not a backblaze customer
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.
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