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Comment by harel | Hacker News Reader

Tech aside, I'm quite curious about the economics of storage here. By the price tags and 'Debian 4' I'm guessing this is an older post. But still, $7867 per 67TB and $5 per month, means they need 131 users pay for one year to recoup the cost of one pod, assuming those 131 do not generate over 67TB worth of storage in that period of time. I've not factored in data centre costs, salaries etc. Just a pod. I'm guessing they have enough users as they have been around for many years now, but still, $5 seems a bit on the cheap side to me (not that I'm complaining)

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Brian from Backblaze here.

> I'm quite curious about the economics of storage here.

When we started almost 8 years ago, we were CLUELESS about the economics of it all, and scared witless over it. :-) But I'm happy to report the grand experiment has been a modest success, we are profitable (by a small amount). We even have a little money left over every month to spend on marketing efforts now, and we're growing by every metric - more customers each year, more revenue each year, more employees to swap failed drives (38,790 spinning drives as of yesterday - some fail like clockwork each and every single day).

any change you will ever offer backup without the need for a client. Sometime a user could just use sftp or something to send the files to. Something more open so I don't have to install your software. That's what holds me back.

I'd imagine--based on purely anecdotal evidence--that their market research indicated consumers are highly responsive to changes in price. People (even those who should know better) tend to have an irrational confidence in the idea that they won't need to fall back on a backup in the future. Hard drives crash, but mine? Unlikely. Foolish in the extreme, but far too common nevertheless.

Faced with that sort of thinking, the lower price likely helped them convince consumers. At $5, it's a low enough fee for most people to kind of just forget about it rather than consciously weigh the opportunity cost involved. The last think Backblaze wants is for its customers to think that they'd be better off spending the money on a really good hot dog or two rather than a backup service.

Brian from Backblaze here.

> their market research indicated consumers are highly responsive to changes in price

That makes it sound like we carefully thought it through. :-) Our "market research" was the 5 Backblaze founders asking their friends and family questions like "Mom, how do you feel about paying $5/month for a backup?" After asking that question to 15 different people, it seemed like there were reasonable tipping points around $5/month and then another one at $1/month. The math didn't work at $1/month - so $5/month it was! And we've never changed prices, because we got lucky and it worked out for us. So we've never run the experiment of whether we would lose half our customer base if we raised the price to $6/month. And I hope we never have to raise prices, because subscription customers seem to HATE that - like when Netflix raised prices it was a hate fest towards them.

That's the second best market research. I'll definitely consider your service, assuming you have a Linux client.

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